Netflix (NFLX) is set to report its fiscal first quarter earnings on Thursday after market close — but the streamer will have a high bar to overcome as expectations remain elevated while the stock's valuation has surged in recent months.

"We believe the [increase] in Netflix's stock price over the past 18 months makes for a tricky set up into Thursday's earnings report," Deutsche Bank wrote in a note on Monday. Shares are up more than 155% over the past year and a half, and the stock is currently trading near the high end of its 52-week range.

"We believe that in order for the stock to appreciate further, consensus estimates for 2024 to 2025 will need to be revised higher, as we believe a lot is already priced in at these valuation levels," the bank said.

Investors will continue to assess the company's revenue initiatives, like its crackdown on password sharing and ad-supported tier, in addition to last year's price hikes on certain subscription plans.

Those initiatives should help boost metrics like free cash flow, operating margins, and average revenue per member, or ARM.

Here's what Wall Street expects, according to Bloomberg consensus estimates:

• Revenue: $9.27 billion (Netflix's guidance: $9.24 billion) vs. $8.16 billion in Q1 2023

• Earnings per share (EPS): $4.52 (Netflix's guidance: $4.49) vs. $2.88 in Q1 2023

• Net subscriber additions: 4.8 million vs. 1.7 million in Q1 2023

Taiwan Semiconductor Manufacturing Company (TSM) led the Yahoo Finance trending tickers page on Thursday afternoon as shares fell. The Taiwanese chip giant cautioned on its growth outlook this year outside of its memory chips business, sending the stock over 5% lower.

Meanwhile, Tesla (TSLA) shares slipped more than 3% after the company was downgraded by Deutsche Bank to Hold from Buy amid fears the automaker's expected low-cost vehicle option will launch later than hoped.

Many stock strategists began the year harping for a rebound in small-cap performance as consensus believed the Federal Reserve would begin reducing interest rates in the first half of 2024. Now, with the market scaling back its hopes for interest rate cuts this year, the small-cap Russell 2000 Index (^RUT) is down nearly 3% year to date, underperforming the S&P 500's more than 5% gain this year.

"We think the Russell 2000 could be a bit challenged in the near term until we get to kind of greater confirmation of inflation slowing and greater confirmation that, OK, the Fed is going to be able to start cutting rates," Bank of America head of US small- and mid-cap strategy Jill Carey Hall told Yahoo Finance.

After recent conversations with investors, Hall said the main catalyst for small caps to move higher is more clarity on the Federal Reserve's interest rate path.

Market consensus has shifted to projecting two rate cuts this year from seven rate cuts in early January, per Bloomberg data. The move has put a significant damper on the rally in small caps to close 2023, while large-cap stocks have clung to gains this year despite the shifting Fed narrative.

The key difference is the companies' debt structures. Small caps have more than 40% of their debt exposed to higher rates either in the form of floating-rate loans or short-term debt that may need to be refinanced amid the higher rate environment. This compares to the roughly 75% of S&P 500 companies, which have long-term fixed-rate debt, per Bank of America's research team.

Add in that large-cap companies often have more cash that could benefit from higher rates and that the Fed not cutting rates is simply more costly for smaller companies than larger companies.

"The [Russell 2000] index is very sensitive to credit and rates," Hall said. "Refinancing risk is a key risk for these companies given that large caps were able to lock in a lot of long-dated fixed-rate debt ...the longer rates stay high, that becomes a bigger and bigger risk to earnings for these [smaller cap] companies."

For the fourth straight day, the S&P 500 traded in the green to start the day and then reversed lower.

The moves came as several Fed officials noted they don't see any "urgency" to cut interest rates. US bond yields, a recent headwind for stocks, rose after the comments The 10-year Treasury yield (^TNX) was up 6 basis points, trading near 4.64%

Gasoline prices have been on the rise nationally, with the West Coast seeing the largest increases over the past month. Now, drivers in New England states are likely to see an outsized spike at the pump.

This week, New York, New Jersey, Pennsylvania, and other Northeastern states switched to a more expensive summer blend of gasoline, sending wholesale prices $0.30 to $0.32 per gallon higher, said Tom Kloza, global head of energy analysis at OPIS.

"These increases will make their way to the street in the remainder of the week," Kloza told Yahoo Finance. "This region will see lots of stiff increases that take consumers by surprise."

On Thursday, the national average for gasoline sat at $3.67 per gallon, roughly a penny less than a year ago, according to AAA data.

Meanwhile, oil prices slipped on Thursday, adding to three straight sessions of declines. West Texas Intermediate (CL=F) futures traded below $83 per barrel, while Brent (BZ=F), the international benchmark price, hovered around $87 per barrel.

Read more here.

Yahoo Finance's Jen Schonberger reports:

New York Fed president John Williams said Thursday he doesn’t see any "urgency" to cut interest rates, becoming the latest central bank official to dial back the timing of any easing in monetary policy.

Rates will need to come down at some point, he added, but that will be driven by the economy.

"I think we've got interest rates in a place that is moving us gradually to our goals," Williams said during a Semafor conference in Washington, D.C.

Investors have increasingly pushed back their rate cut expectations, pricing in the first cut in September with dwindling odds of a second rate cut this year.

Read more here.

The S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) rose roughly 0.6% and 0.4%, respectively, as they looked to recover from four straight days of declines.

Shares of Meta (META) gained more than 3%, while Nvidia (NVDA) rose more than 1%, following the chipmaker's 4% slide in the prior session.

The Nasdaq Composite seesawed earlier on Thursday but gained its footing during late morning trading.

The Dow Jones Industrial Average (^DJI) rose 0.8%, led by gains in industrials and financials.

Tesla (TSLA) dropped more than 3% in early trading on Thursday as shares of the EV giant continued their downward trend. Tesla stock is down roughly 40% year to date, hitting its lowest intraday level since January 2023.

The stock weighed on the tech-heavy Nasdaq Composite (^IXIC), which struggled to stay in green territory after sliding more than 1% in the prior session.

Stocks rose on Thursday morning, led by gains on all three major averages.

The Dow Jones Industrial Average (^DJI) rose 0.3%, while the S&P 500 (^GSPC) rose roughly 0.2%. The Nasdaq Composite (^IXIC) added 0.1% after tech stocks ended over 1% lower on Wednesday.

In each of the prior sessions this week, the S&P 500 opened higher but was not able to sustain those gains throughout the day. The broader benchmark has closed lower for the past four sessions.

All eyes will be on Netflix (NFLX) this afternoon when the streaming giant reports its quarterly results after the closing bell.

Netflix shares are up more than 25% year to date.

One of the fun things in a business newsroom: the banter on a battleground stock when it gets put through the wringer.

That battleground stock today is none other than Tesla (TSLA), which has had an awful 2024 for numerous reasons. The stock is down 11% in the past five trading sessions despite the company's new round of cost-cutting. Shares are nearing a 40% year-to-date decline.

The banter today from the Yahoo Finance newsroom premarket has been how slow most on the Street have been in reversing course on the stock. Some analysts have moved their ratings, but the holdouts are holding out.

Director of Yahoo Finance Live Valentina Caval and reporter Madison Mills crunched the numbers on this one, and here's where things stand.

While over 60% of analysts had a Buy rating on Tesla just last year, only 32% of analysts now have that same rating on the stock. About 44% have a Hold rating, while 23% sport a Sell.

The IMF has been making waves this week at its spring meetings in D.C. with its warnings on the high levels of US debt ($34 trillion and counting).

Amid those warnings, we have seen rates on the 2-year and 10-year Treasurys move higher and the air come out of momentum stocks such as Nvidia (NVDA).

Bank of America chair and CEO Brian Moynihan is entering the conversation on US debt via a new interview with yours truly.

“So you really have to let the debt run at the right levels. And it's fine now, but it's something we have to be concerned about,” Moynihan told me on Yahoo Finance. "It's not something you raise the alarm on and say we have got to stop everything tomorrow. It's something you have to manage over the next decade because a little bit done every year adds up to a lot at the end of the decade."

You can watch our chat on other issues, such as the state of US consumers, below. And there's more analysis on the company's earnings this week here.