Pre-market market trends
1. On October 22 (Thursday), the futures of the three major US stock indexes fell sharply before the US stock market. As of press release, Dow futures were down 0.57%, S&P 500 futures were down 0.94%, and NASDAQ futures were down 1.60%.
2. As of press release, the German DAX index fell 0.71%, the French CAC40 index fell 0.29%, the UK FTSE 100 index fell 1.11%, and the European Stoxx 50 index fell 1.37%.
3. As of press release, WTI crude oil rose 2.34% to $99.42 per barrel. Brent crude rose 2.85% to $111.92 per barrel.
Market news
Trump denied negotiations with Iran, saying the situation would be settled “soon.” Trump said that the US is in a “very favorable” position “at the military and economic levels” when it comes to dealing with Iran; he described the current situation as “a minor conflict with Iran.” When asked by reporters, Trump was asked if he had given up negotiations with Iran. Trump replied, “No, I don't think we're currently in negotiations. In any case, there will always be results in the end, and you'll see them soon.” He added: “Most people seem to think this will have to wait until after the election — let's wait and see.”
The yield on French 10-year treasury bonds surpassed US bonds for the first time in 13 years. French 10-year treasury yields rose 8 basis points during the day, surpassing US Treasury yields for the first time since 2013, reflecting growing concerns among investors about France's deteriorating financial situation and increasing debt burden. On Thursday, the US 10-year Treasury yield was 5.08%. Increased stock market volatility prompted investors to repurchase US Treasury bonds, driving US Treasury yields down.
Attacks surged after serious PHP vulnerabilities came to light, and Cloudflare (NET.US) detected millions of attempts. Matthew Prince, CEO of cloud service company Cloudflare, published an article saying that after PHP, the widely used programming language, was revealed to have serious vulnerabilities, the company detected millions of attempts to exploit the vulnerability. Prince said, “In the 10 hours before the vulnerability was publicly disclosed, we were monitoring thousands of use attempts across the entire network. Within 45 minutes of the vulnerability being announced, that number jumped to tens of thousands; it reached hundreds of thousands within two hours, and now it has reached millions.” On Wednesday, after the PHP vulnerability was revealed, website operators around the world took urgent steps to protect the system, and some government websites in Europe and other regions went offline as a result.
The world's largest sovereign wealth fund lost 30 billion US dollars due to the turbulent bond market. The world's largest sovereign wealth fund, the Norwegian Sovereign Wealth Fund, said on Thursday that the fund's portfolio lost $30 billion in the third quarter as rising interest rates dragged down returns on bond holdings. The fund's asset management scale reached $2.3 trillion. The fund's return on fixed income investments is -3.5%. Fund management said this was one of the main reasons for the decline in overall performance.
J.P. Morgan Chase: The sharp decline in the stock market may be coming to an end. Nikolaos Panigirtzoglou, a global market strategist at J.P. Morgan Chase, and his team believe that the recent decline in the semiconductor sector indicates that most long positions have been closed, including those of momentum investors. Although short-term headwinds still exist, these position adjustments may have limited room for further market decline. The J.P. Morgan team also discussed another issue that has recently worried the market: financing risks for new cloud companies. J.P. Morgan believes that financing does pose a problem to a certain extent, but due to extremely strong demand for computing resources, related companies may pass on the impact of rising financing costs to end customers. Even if financing becomes unviable, he doesn't think the timing mismatch between capital expenditure and revenue would disrupt the entire industry's growth cycle.
Anthropic launches all-weather AI agent Claude Duet. Anthropic on Wednesday announced the launch of a new app called Claude Duet, positioning it as an “active agent.” The tool can run continuously in the background, proactively prompt users with to-do items, and handle a variety of work tasks. Currently, Claude Duet is still in research preview, and users will need to join a waitlist to be eligible to use it. This means that for the time being, the product cannot compete directly with Meta's newly launched smart products such as Muse and OpenAI's DOTS in a wider market. Anthropic said Duet was developed based on its flagship model, Opus 5.5.
Individual stock news
Most of the big tech stocks were lower before the market. According to pre-market summaries, IBM (IBM.US) fell more than 5%, applied materials (AMAT.US) fell more than 4%, and Mwell Technology (MRVL.US) fell nearly 2%; Micron (MU.US), SanDisk (SNDK.US), SK Hynix (SKHY.US), Intel (INTC.US), etc. fell about 4%; Nvidia (NVDA.US) fell more than 2%. Meta (META), which had previously risen more than 7% due to Q3 results, turned down about 2% before the market.
Meta announced Q3 results after the market: revenue exceeded expectations, capital expenditure increased betting on AI. The company's third-quarter revenue reached US$64.60 billion, a year-on-year increase of 26.00%, exceeding analysts' expectations of US$63.30 billion. The growth was mainly driven by the advertising business. Dragged down by $9.890 billion in one-time legal settlement fees, the diluted earnings per share were $3.83, lower than market expectations; if this one-time fee was excluded, EPS could reach $7.40. At the same time, the company raised its performance guidelines. The fourth quarter revenue is expected to reach 73 billion to 76 billion US dollars, and the median range is higher than market expectations; it also raised the lower limit of 2026 capital expenditure guidance to 135 billion US dollars from the previous 130 billion US dollars, leaving the upper limit unchanged at 145 billion US dollars, further increasing AI computing power and data center investment.
Tesla (TSLA.US)'s after-market filing was mixed: revenue was slightly lower than expected, and capital expenses were drastically lowered. The company's third-quarter revenue was US$28.05 billion, lower than analysts' expectations of US$28.13 billion; adjusted earnings per share of US$0.48, higher than expectations of US$0.44; free cash flow of US$1.53 billion in a single quarter was clearly better than the gap of nearly US$5 billion that the market had originally feared. However, the key variable that the market focuses on is capital expenditure: Tesla directly lowered its capital expenditure target for the full year 2026 from “over US$25 billion” to about US$20 billion (a decrease of about 20%), and the actual capital expenditure of US$4.73 billion this quarter is also far lower than the market estimate of US$7.95 billion. The chief financial officer called it “efficient management of capital deployment,” but investors are concerned that the contraction in capital expenditure will affect the pace of investment in long-term stories such as AI, humanoid robots, and driverless taxis.
Texas Instruments (TXN.US) handed over a steady questionnaire due to concerns about the AI bubble: Q3 revenue and profit both exceeded expectations, and Q4 guidance was unexpectedly strong. Analog chip maker Texas Instruments announced results for the third quarter of fiscal year 2026, with revenue of US$6.06 billion, higher than analysts' expectations of US$5.90 billion, up 27.7% year over year, exceeding expectations of 2.6%; GAAP earnings per share were US$2.62, 8% higher than analysts' expectations of US$2.43. Furthermore, the company's revenue guidance for the next quarter (median value of US$6.05 billion) was surprisingly strong, 5.6% higher than analysts' expectations.
Procter & Gamble (PG.US) Q1 performance fully exceeded expectations: organic sales increased 4%, and sales rebounded to reverse the growth structure. P&G announced financial results for the first quarter of the 2027 fiscal year. Financial reports showed that the company's Q1 net sales were $233 billion, up 4% year over year, higher than the forecast of about $228 billion; core earnings per share were $2.00, up 1% year over year, higher than the forecast of $1.89. The company previously indicated a year-on-year decline of 5% or more in core EPS for the quarter; in fact, there was no decline but an increase. Organic sales, which the market is most concerned about, increased by 4%, far exceeding the agreed expectations of about 2% (the most optimistic investment banks, UBS and Evercore ISI also forecast only 2.6% to 3%).
American Airlines (AAL.US) recorded a record revenue of $16.3 billion in Q3, but a sharp increase in fuel costs of 67% was the biggest drag, and a net loss is expected to be recorded throughout the year. American Airlines announced financial results for the third quarter of fiscal year 2026 (ending September 30) on October 22. According to financial reports, total revenue for the quarter was US$16.34 billion, up 19.3% year on year, setting the highest record in the company's history other than the post-pandemic year and exceeding the upper limit of the previous guidance range. Despite this, the airline is expected to lose money in 2026, abandoning the previous guidance range where profit and loss were possible. The reason is that the increase in aviation fuel prices, which remains high, exceeds the increase in ticket prices, and continues to squeeze the company's profit margins.
A number of large banks in the US have discovered that unauthorized AI agents have accessed accounts. Some sources revealed that several large banks in the US are discovering that unauthorized third-party artificial intelligence agent programs are running within customer accounts, and some agents are even trying to perform operations that appear to be independent of user instructions. As it was difficult to distinguish between humans and unauthorized robots, banks were forced to block the technology and quickly revise the terms of service. According to reports, banks such as Morgan Stanley (MS.US), Bank of America (BAC.US), J.P. Morgan Chase (JPM.US), and Wells Fargo Bank (WFC.US) are scrambling to curb agency risks. Relevant sources said that some banks have detected unauthorized visits. According to people familiar with the matter, Morgan Stanley has begun blocking third-party agents from accessing its platform. J.P. Morgan Chase, Bank of America, and Citibank (C.US) are also limiting agents' access.
It is reported that SpaceX (SPCX.US) and Tesla (TSLA.US) aim to reach a merger deal in the first half of next year. According to people familiar with the matter, relevant parties are pushing Tesla and SpaceX to announce a merger deal in the first half of 2027 in order to complete the merger during Trump's current administration. The US midterm elections will be held in less than two weeks. If the Democratic Party controls any house of Congress, Musk and his companies may face investigation, and it may also weaken the influence of a president who is increasingly entering the lame duck stage. At the same time, if chip and artificial intelligence stocks continue to be sold off, investor support may weaken, affecting whether this ambitious deal can proceed.
Meta's personal AI agent Muse surpassed 10 million users a month after launch. Meta CEO Mark Zuckerberg said on Wednesday that since its launch in September, Meta's new personal AI application Muse has attracted more than 10 million users. On Meta's third-quarter earnings call, Zuckerberg said that Muse's growth “is still strong” and that the most common use case currently is shopping. More than a quarter of Muse users will buy products through the app, with an average transaction amount of over $200, he said.
Key economic data and event forecasts
20:30 Beijing time: Number of jobless claims in the US at the beginning of the week ending October 17
22:00 Beijing time: Eurozone's initial consumer confidence index for October
Performance Forecast
Friday morning: Western Digital (WDC.US), Bloom Energy (BE.US)
Friday pre-market: American Express (AXP.US), Schlumberger (SLB.US)