December Nasdaq 100 E-Mini futures (NQZ26) are down -1.05% this morning as disappointing earnings from Alphabet and Samsung Electronics renewed concerns about the AI trade.
Alphabet (GOOGL) tanked over -10% in pre-market trading after the Google parent reported weaker-than-expected Q3 revenue. Weaker-than-expected search and advertising revenue drove the miss. Also weighing on sentiment, Samsung Electronics fell over -4% in Seoul as the absence of a new shareholder return plan disappointed investors, while profit from its chip business missed estimates and the company increased its spending plans.
Chip and AI infrastructure stocks slumped in pre-market trading following earnings from Alphabet and Samsung.
Investors are now awaiting a raft of U.S. economic data, including the Federal Reserve’s preferred inflation gauge and the advance estimate of third-quarter GDP, as well as a new round of corporate earnings reports, with a particular focus on results from Amazon.
In yesterday’s trading session, Wall Street’s three main equity benchmarks closed higher. Chip and AI infrastructure stocks climbed, boosted by SK Hynix’s stellar earnings, with Sandisk (SNDK) surging over +7% to lead gainers in the Nasdaq 100 and Micron Technology (MU) rising more than +5%. Also, Vertiv Holdings (VRT) popped over +16% and was the top percentage gainer in the S&P 500 after the data-center infrastructure provider posted upbeat Q3 results and raised its full-year guidance. In addition, Oracle (ORCL) jumped more than +10% after the software infrastructure company said at its investor day event that it expects to generate positive free cash flow in the second half of fiscal 2028. On the bearish side, F5 Inc. (FFIV) cratered over -20% and was the top percentage loser in the S&P 500 after the company reported a surge in FQ4 operating expenses and issued soft FY27 EPS guidance.
Economic data released on Wednesday showed that U.S. September wholesale inventories rose +0.6% m/m, compared with expectations of +0.5% m/m.
The Fed held interest rates steady on Wednesday following last month’s increase, as expected. The Federal Open Market Committee voted 10-2 to leave the benchmark federal funds rate unchanged in a range of 3.75% to 4.00%. Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, favoring a quarter-point rate hike. The decision marked Cook’s first dissent as a Fed governor. “The accumulation of more information will help the committee determine the policy stance appropriate to ensure a timely return of inflation to the committee’s 2% goal. The committee will deliver price stability,” the Fed’s statement said. Policymakers also upgraded their assessment of the U.S. economy, describing economic activity as expanding at a “strong pace,” compared with the “solid” pace cited in previous statements.
At a press conference, Chairman Kevin Warsh said officials have “made clear our readiness to act as circumstances require, and we have shown our willingness to act.” Warsh also said the central bank will gradually adopt a revised meeting schedule, with rate-setting votes planned for seven of its eight meetings next year.
Meanwhile, U.S. rate futures are currently pricing in an 83.3% chance of a 25-basis-point rate hike and a 16.7% chance of no rate change at the next FOMC meeting in December.
Third-quarter corporate earnings season is in full swing, with investors awaiting reports today from high-profile companies including Amazon.com (AMZN), Intel (INTC), Sandisk (SNDK), Mastercard (MA), Eli Lilly (LLY), and Caterpillar (CAT). According to Bloomberg Intelligence, S&P 500 companies are expected to post an average +25% jump in third-quarter earnings from a year earlier.
On the economic front, all eyes are on the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, which is set to be released in a couple of hours. Economists, on average, forecast that the core PCE price index will rise +0.3% m/m and +3.1% y/y in September, compared with +0.2% m/m and +3.0% y/y in August.
The U.S. Commerce Department’s advance estimate of third-quarter gross domestic product will also be closely monitored today. Economists expect the U.S. economy to expand at an annualized rate of 3.2% in the third quarter, driven by strong business investment and resilient consumer spending.
U.S. personal spending and personal income data will be released today. Economists project September personal spending to rise +0.6% m/m and personal income to grow +0.3% m/m, compared with the August figures of +0.9% m/m and +0.2% m/m, respectively.
U.S. initial jobless claims data will be released today as well. Economists expect applications for U.S. unemployment benefits to come in at 198K in the week ended Oct. 24, compared with 194K in the prior week.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 5.00%, down -0.42%.
The Euro Stoxx 50 Index is up +0.24% this morning as some positive corporate earnings and lower oil prices buoyed sentiment, though gains were limited amid caution ahead of the European Central Bank’s monetary policy decision. Energy stocks climbed on Thursday, with Shell (SHEL.LN) rising over +2% after the company posted strong Q3 results and increased its buybacks. Telecommunications stocks also advanced. At the same time, technology stocks declined, tracking global weakness in the sector following disappointing earnings from Alphabet and Samsung Electronics. In addition, bank stocks slid, pressured by a drop of more than -6% in BBVA (BBVA.E.DX) after its Q3 results disappointed investors. Eurozone government bond yields fell on Thursday, following their U.S. peers lower, while investors awaited the ECB’s interest-rate decision. The ECB is widely expected to leave its deposit rate unchanged at 2.50% later today, a move that would help avoid further pressure on French bonds as there are few signs that higher energy costs are spilling over into prices for other goods and services. The central bank raised interest rates in September for the second time since the U.S.-Iran war began pushing energy prices sharply higher. Economists expect a third and final rate hike of the cycle in December. In other corporate news, Renault (RNO.FP) climbed over +7% after the automaker reaffirmed its full-year guidance.
Asian stock markets today closed mixed. China’s Shanghai Composite Index ($CHSC) closed down -0.82%, and Japan’s Nikkei 225 Stock Index ($NKY) closed up +1.10%.
China’s Shanghai Composite Index closed lower today, weighed down by weakness in the technology sector. Tech stocks tumbled on Thursday as strong quarterly results from some companies failed to offset persistent concerns about fundamentals and renewed weakness in global AI sentiment. AI chip-maker Moore Threads Technology tanked over -12% despite revenue surging nearly 1,800% year-over-year in the third quarter, while memory-chip maker Biwin Storage Technology cratered more than -15% even after profit jumped more than 500%. Chinese tech stocks have come under heavy pressure this month amid concerns about stretched valuations and fierce domestic competition. Thursday’s selloff also reflected broader weakness in global tech shares after disappointing results from heavyweights Alphabet and Samsung Electronics dampened sentiment. Investor focus is now on the communique from China’s fifth plenum, a closed-door gathering of the Chinese Communist Party’s Central Committee set to conclude today. Attention will then shift to China’s PMI gauges for October, scheduled for release on Saturday. Economists expect the manufacturing PMI to hold steady at September’s level, staying in expansion territory, while growth in the non-manufacturing sector is projected to pick up, supported by spending during the National Day holiday.
Japan’s Nikkei 225 Stock Index closed higher today, bucking a tech-driven selloff among most of its regional peers. Heavyweight chip-testing equipment maker Advantest drove the Nikkei’s advance, climbing more than +6% after it raised its full-year operating profit forecast by 14%. The upbeat outlook also lifted other chip-related stocks, while gains in financial shares further supported the benchmark. Meanwhile, Japanese government bond yields were mixed on Thursday amid investor caution ahead of the Bank of Japan’s monetary policy decision. The BOJ is widely expected to leave its benchmark rate unchanged at 1.25% when its two-day meeting concludes on Friday, as policymakers assess the impact of last month’s hike on inflation and economic growth. Market participants will scrutinize the BOJ’s quarterly outlook report for updated growth and inflation projections. Reuters reported last week that the central bank could raise its inflation forecast for the next fiscal year, as rising oil prices keep price pressures elevated for longer than previously expected. Attention will also be on Governor Kazuo Ueda’s remarks at his post-meeting press conference for clues on the pace and scope of further tightening. Markets were pricing in roughly an 84% probability of a rate hike at the December meeting. Hours before the BOJ’s decision, investors will closely watch Japan’s September industrial production and retail sales figures, along with October Tokyo core CPI. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -21.53% at 25.80.
The Japanese October Household Confidence came in at 35.0, weaker than expectations of 35.1.
Pre-Market U.S. Stock Movers
Alphabet (GOOGL) tanked over -10% in pre-market trading after the Google parent reported weaker-than-expected Q3 revenue.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - October 29th
Amazon.com (AMZN), Eli Lilly and Company (LLY), Mastercard (MA), Intel (INTC), Merck & Co. (MRK), Caterpillar (CAT), Linde (LIN), Sandisk (SNDK), Gilead Sciences (GILD), Bristol-Myers Squibb Company (BMY), Altria Group (MO), Starbucks (SBUX), Stryker (SYK), Trane Technologies (TT), Quanta Services (PWR), Intercontinental Exchange (ICE), Enterprise Products Partners (EPD), Mondelez International (MDLZ), Howmet Aerospace (HWM), Republic Services (RSG), Digital Realty Trust (DLR), Arthur J. Gallagher & Co. (AJG), Cheniere Energy (LNG), Monolithic Power Systems (MPWR), CRH plc (CRH), Strategy (MSTR), Xcel Energy (XEL), L3Harris Technologies (LHX), Carrier Global (CARR), Illumina (ILMN), Ameriprise Financial (AMP), Coinbase Global (COIN), Ares Management (ARES), D.R. Horton (DHI), Twilio (TWLO), Roblox (RBLX), WEC Energy Group (WEC), ResMed (RMD), Vulcan Materials Company (VMC), Restaurant Brands International (QSR), The Hershey Company (HSY), Rocket Companies (RKT), Teck Resources (TECK), Alnylam Pharmaceuticals (ALNY), Cognizant Technology Solutions (CTSH), EMCOR Group (EME), DexCom (DXCM), Willis Towers Watson (WTW), Ingersoll Rand (IR), TechnipFMC (FTI), West Pharmaceutical Services (WST), Tradeweb Markets (TW), Reddit (RDDT), Veralto (VLTO), Incyte (INCY), Entegris (ENTG), Edison International (EIX), ATI Inc. (ATI), T. Rowe Price Group (TROW), Tenet Healthcare (THC), XPO, Inc. (XPO), Insmed (INSM), Bunge Global (BG), First Solar (FSLR), Alliant Energy (LNT), APi Group (APG), TPG Inc. (TPG), WESCO International (WCC), Rivian Automotive (RIVN), FTAI Aviation (FTAI), Hyatt Hotels (H), Exelixis (EXEL), FedEx Freight Holding Company (FDXF), Kimco Realty (KIM), Blue Owl Capital (OWL), MasTec (MTZ), Weyerhaeuser Company (WY), Avery Dennison (AVY), BridgeBio Pharma (BBIO), GoDaddy (GDDY), Textron (TXT), Baxter International (BAX), DT Midstream (DTM), Erie Indemnity Company (ERIE), Pinterest (PINS), DaVita (DVA), Gaming and Leisure Properties (GLPI), BorgWarner (BWA), Huntington Ingalls Industries (HII), Ryan Specialty Holdings (RYAN), Kymera Therapeutics (KYMR), Life Time Group Holdings (LTH), Cullen/Frost Bankers (CFR), Leonardo DRS (DRS), TFI International (TFII), CubeSmart (CUBE), Sirius XM Holdings (SIRI), Saia, Inc. (SAIA), PBF Energy (PBF), Oshkosh (OSK), A. O. Smith (AOS), SPX Technologies (SPXC), InterDigital (IDCC), IDACORP (IDA), AptarGroup (ATR), Mohawk Industries (MHK), Eastman Chemical Company (EMN), Axalta Coating Systems (AXTA), AGCO Corporation (AGCO), Norwegian Cruise Line Holdings (NCLH), Federal Signal (FSS), Ingram Micro Holding (INGM), Allegro MicroSystems (ALGM), Ligand Pharmaceuticals (LGND), Builders FirstSource (BLDR), Healthcare Realty Trust (HR), GATX Corporation (GATX), Mobileye Global (MBLY), Crocs (CROX), CNX Resources (CNX), Credit Acceptance (CACC), Merit Medical Systems (MMSI), Schneider National (SNDR), Portland General Electric Company (POR), Axos Financial (AX), PTC Therapeutics (PTCT), KBR, Inc. (KBR), Floor & Decor Holdings (FND), Laureate Education (LAUR), CNO Financial Group (CNO), Methanex (MEOH), Granite Construction (GVA), CSW Industrials (CSW), Cousins Properties (CUZ), CCC Intelligent Solutions Holdings (CCC), Brunswick (BC), Covista (CVSA), LKQ Corporation (LKQ), FTI Consulting (FCN), Belden (BDC), Garrett Motion (GTX), Cavco Industries (CVCO), Centerra Gold (CGAU), Indivior Pharmaceuticals (INDV), AXT, Inc. (AXTI), Federated Hermes (FHI), Silgan Holdings (SLGN), COPT Defense Properties (CDP), CareDx (CDNA), SkyWest (SKYW), Exponent (EXPO), Hamilton Insurance Group (HG), Bright Horizons Family Solutions (BFAM), Acadian Asset Management (AAMI), PennyMac Financial Services (PFSI), OSI Systems (OSIS), TriNet Group (TNET), Telesat (TSAT), Miami International Holdings (MIAX), SPS Commerce (SPSC), Columbia Sportswear Company (COLM), Hercules Capital (HTGC), Enerflex (EFXT), Harley-Davidson (HOG).
On the date of publication, Oleksandr Pylypenko did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.