U.S. stock futures are pointing lower as turmoil in the Middle East is causing oil prices to rise; Levi Strauss (LEVI) shares are plunging after it announced it may sell its underperforming Dockers brand; Humana (HUM) shares are in focus after dropping yesterday on government downgrades to its Medicare Advantage offerings; a safety recall for Tesla’s (TSLA) Cybertruck is further pressuring shares; and ChatGPT maker OpenAI raises an additional $6.6 billion as its valuation soars to $157 billion. Here’s what investors need to know today.
1. US Stock Futures Edge Lower; Oil Prices Higher on Middle East Tensions
After rebounding to finish slightly higher yesterday, U.S. stock futures are lower in premarket trading as investors continue to exhibit caution at the start of the fourth quarter. In addition to the ongoing dockworkers’ strike, markets are also affected by surging oil prices as tensions in the Middle East continue. Oil futures are roughly 2% higher early Thursday, with Brent crude above $75 a barrel.
2. Levi’s Stock Sinks; Retailer Mulls Selling Dockers Brand
Shares of Levi Strauss (LEVI) are tumbling 11% in premarket trading after the jeans maker announced it may sell its Dockers brand as it delivered mixed third-quarter results. While Levi’s adjusted earnings per share (EPS) of 33 cents beat consensus estimates of analysts polled by Visible Alpha, its revenue of $1.52 billion came up short. Sales of Dockers were down 15% year-over-year, prompting executives to “evaluate strategic alternatives” for the unit.
3. Humana in Focus After Stock Plummets
Humana (HUM) shares are little changed in premarket trading after plummeting yesterday as government regulators downgraded a portion of the insurer’s Medicare offerings. The change could impact the quality bonuses it gets from the government for its Medicare Advantage programs, potentially cutting into earnings. Humana stock plunged by nearly 12% on Wednesday, part of a 46% decline in the company’s share price this year.
4. Tesla Stock Pressured Further With Cybertruck Recall
Tesla (TSLA) shares are declining a further 1.3% in premarket trading after falling nearly 4% yesterday as the electric vehicle (EV) maker’s third-quarter deliveries came in slightly lower than analysts were anticipating. Now Tesla is recalling up to 27,000 Cybertrucks because of an issue with the rear-view camera, according to a National Highway Traffic Safety Administration (NHTSA) notice.
5. OpenAI Reaches $157 Billion Valuation
OpenAI, the maker of ChatGPT, announced that it had raised $6.6 billion in new funding, raising the artificial intelligence (AI) company’s valuation to $157 billion. The company said that the investment would allow the tech firm to “double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems.” The increased valuation comes as OpenAI reportedly looks to restructure into becoming a for-profit company.