Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022. Reuters / BRENDAN MCDERMID

The S&P 500 and the Nasdaq were set to open higher on Thursday as electric automaker Tesla topped Wall Street's profit target, while futures tracking the Dow struggled for direction.

Tesla rose 3% in premarket trading as its quarterly profit benefited from a string of price increases for its cars. That helped offset production challenges.

Positive earnings reports from Tesla and streaming giant Netflix Inc have of late boosted megacap growth stocks, which have been under pressure from rising interest rates.

Shares of Apple Inc, Inc and Alphabet Inc also gained between 0.6% and 0.7%.

"Is it possible that Tesla provides a short term rally? Yes, absolutely," said Giuseppe Sette, president of the quantitative research firm Toggle.

"However, it seems likely that if we are truly in an age of liquidity withdrawal and quantitative tightening, rallies on high-momentum stocks like Tesla might not be secular or cyclical, but just rather short-term."

While market participants took comfort in the positive results, they continue to await anxiously a Federal Reserve meeting next week where policymakers are expected to raise interest rates by 75 basis points to curb runaway inflation.

The rate decision will be followed by the crucial second-quarter U.S. gross domestic product data, which is likely to be negative again.

By one common rule of thumb, two quarters of negative GDP growth would mean the United States is already in a recession.

"The backdrop for U.S. corporate earnings looks challenging. With slowing economic growth, a strong US dollar and margins looking stretched, we suspect S&P 500 companies will struggle to meet the optimistic expectations embedded in analyst forecasts," said Thomas Mathews, markets economist at Capital Economics.

Analysts expect aggregate year-on-year S&P 500 profit to grow 5.9% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.

Meanwhile, data showed the number of Americans filing new claims for unemployment benefits rose to the highest in eight months, suggesting some cooling in the labor market amid tighter monetary policy and financial conditions.

At 8:38 a.m. ET, Dow e-minis were down 25 points, or 0.08%, S&P 500 e-minis were up 5 points, or 0.13%, and Nasdaq 100 e-minis were up 53.25 points, or 0.43%.

Falling oil prices hit Chevron Corp, which fell 1.9%, while other energy companies including Marathon Oil Corp, Occidental Petroleum Corp and Exxon Mobil Corp dropped between 1.9% and 2.5%.

Shares of U.S. airlines fell, with United Airlines Holdings down 6% and American Airlines off 3%. United Airlines posted a lower-than-expected quarterly profit, while American Airlines said cost pressure would remain elevated in the current quarter.