December S&P 500 E-Mini futures (ESZ25) are up +0.43%, and December Nasdaq 100 E-Mini futures (NQZ25) are up +0.48% this morning as signs of continued strong demand for artificial intelligence helped shift investors’ attention from escalating U.S.-China trade tensions.
U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose over +1% in pre-market trading after the world’s biggest contract chipmaker reported record Q3 profit and raised its full-year revenue growth guidance. The results underscored that chipmakers are poised to be some of the biggest beneficiaries of an AI investment boom. AI-related U.S. heavyweights advanced in pre-market trading, with Nvidia (NVDA) and Broadcom (AVGO) rising more than +1%.
Lower bond yields today are also supporting stock index futures.
Investors now await a fresh batch of corporate earnings reports and remarks from Federal Reserve officials.
In yesterday’s trading session, Wall Street’s three main equity benchmarks ended mixed. Bunge Global (BG) surged over +12% and was the top percentage gainer on the S&P 500 after President Trump said Washington was considering ending certain trade relations with China, including the purchase of cooking oil. Also, chip stocks rallied, with Advanced Micro Devices (AMD) climbing more than +9% to lead gainers in the Nasdaq 100 and KLA Corp. (KLAC) rising nearly +6%. In addition, Bank of America (BAC) gained more than +4% after the lender posted stronger-than-expected Q3 results. On the bearish side, Progressive Corp. (PGR) slid over -5% after the insurance giant reported weaker-than-expected Q3 results.
Economic data released on Wednesday showed that the Empire State manufacturing index rose to 10.70 in October, stronger than expectations of -1.80.
The Fed said Wednesday in its Beige Book survey of regional business contacts that U.S. economic activity was little changed in recent weeks, while employment levels remained largely stable. Three districts reported slight to modest growth in activity, five noted no change, and four reported a mild softening in activity. The report also noted that overall consumer spending declined slightly, while prices continued to rise, with several districts observing a quicker rise in input costs. “Tariff-induced input cost increases were reported across many districts, but the extent of those higher costs passing through to final prices varied,” according to the Beige Book. Some chose to keep selling prices mostly steady to retain customers, while others passed the higher import costs on to consumers in full.
Fed Governor Stephen Miran said on Wednesday that escalating trade tensions between the U.S. and China have heightened uncertainty about the growth outlook, underscoring the need for policymakers to cut interest rates quickly. “There’s now more downside risks than there was a week ago, and I think it’s incumbent upon us as policymakers to recognize that should get reflected in policy,” Miran said.
U.S. rate futures have priced in a 97.8% probability of a 25 basis point rate cut and a 2.2% chance of no rate change at October’s monetary policy meeting.
Third-quarter corporate earnings season is gathering pace, and investors look ahead to new reports from prominent companies today, including Charles Schwab (SCHW), Bank of NY Mellon (BK), U.S. Bancorp (USB), CSX Corp. (CSX), and Travelers (TRV). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +7.2% increase in quarterly earnings for Q3 compared to the previous year, marking the smallest rise in two years.
Meanwhile, the U.S. government shutdown continues, with no resolution in sight. In light of the government shutdown, the publication of weekly jobless claims, the September retail sales report, and the September PPI, originally set for today, will likely be delayed. Still, the Philadelphia Fed-compiled Manufacturing Index will be released today. Economists anticipate that the Philly Fed manufacturing index will stand at 8.6 in October, compared to last month’s value of 23.2.
U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be 0.3 million, compared to last week’s value of 3.715 million.
In addition, market participants will hear perspectives from Fed Governors Christopher Waller, Michael Barr, and Stephen Miran, as well as Richmond Fed President Tom Barkin, Minneapolis Fed President Neel Kashkari, and Fed Vice Chair for Supervision Michelle Bowman throughout the day.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.025%, down -0.52%.
The Euro Stoxx 50 Index is up +0.05% this morning as investors digest a fresh batch of corporate earnings reports and await a confidence vote for French Prime Minister Sebastien Lecornu. Food and beverage stocks gained ground on Thursday, while travel stocks underperformed. Data from the Office for National Statistics released on Thursday showed that the U.K. economy grew only modestly in August, extending a period of sluggish expansion following the strong pace seen at the start of the year. Separately, final data from the statistics agency ISTAT confirmed that Italy’s annual inflation rate stood at 1.6% in September, unchanged from August. In addition, data showed that EU goods exports to the U.S. slumped in August following the implementation of a trade deal that increased duties on most products from the bloc. Meanwhile, investors continue to keep a close eye on political developments in France. Lecornu and his government seem poised to survive two no-confidence votes on Thursday after pledging to suspend a controversial pension reform to secure backing in the National Assembly. In corporate news, Nestle SA (NESN.Z.IX) climbed over +8% after reporting a stronger-than-expected increase in quarterly sales and announcing plans to cut 16,000 jobs. Also, Sartorius AG (SRT3.D.DX) surged more than +9% after the life-science company raised its full-year guidance.
U.K. GDP, Italy’s CPI, and Eurozone’s Trade Balance data were released today.
U.K. August GDP rose +0.1% m/m and +1.3% y/y, in line with expectations.
The Italian September CPI fell -0.2% m/m and rose +1.6% y/y, in line with expectations.
Eurozone August Trade Balance came in at 1 billion euros, weaker than expectations of 6.9 billion euros.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.10%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.27%.
China’s Shanghai Composite Index ended slightly higher today as cautious sentiment prevailed amid U.S.-China trade tensions. Financial stocks outperformed on Thursday as investors adopted a more defensive stance. U.S. President Donald Trump said on Wednesday that the United States was engaged in a trade war with China. Also, U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent criticized China’s broad expansion of rare earth export controls as a threat to global supply chains but said that leaders from both nations are likely to discuss another extension of the tariff truce at the upcoming meeting in South Korea. Meanwhile, China’s commerce ministry defended the export controls, citing U.S. restrictions on Chinese goods and companies and labeling Washington’s criticism as hypocritical. Also, Chinese state media on Thursday published a seven-point response rejecting U.S. calls for Beijing to roll back its rare earth export controls. In other news, economists at BofA Securities said that China’s economy is expected to see modest progress in the coming quarters. In corporate news, NIO plunged about -9% in Hong Kong after Chinese media outlet Caixin reported that Singapore’s sovereign wealth fund GIC had filed a lawsuit against the company and two of its executives. Investors are awaiting the Fourth Plenum, set for October 20th-23rd, which will lay out China’s economic, political, and social priorities as well as its development plans for the next five years. Morningstar’s Kai Wang said that the upcoming Fourth Plenum could present some positive catalysts amid the recent escalation in U.S.-China trade tensions.
Japan’s Nikkei 225 Stock Index closed higher today, tracking overnight gains across most U.S. equity markets. Also, increased prospects of Liberal Democratic Party (LDP) leader Sanae Takaichi becoming Japan’s next prime minister further boosted sentiment. Takaichi urged the leaders of an Osaka-based opposition party, the Japan Innovation Party (JIP), to support her in next week’s parliamentary vote to decide the next prime minister. Japan’s weakened LDP held policy talks with the JIP on Thursday. If the JIP backs Takaichi, her victory in the vote is virtually assured. “Takaichi trade is back,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities. Technology, utility, and real estate stocks led the gains on Thursday. Data released on Thursday showed that Japan’s monthly core machinery orders, a key leading indicator of capital spending, unexpectedly fell in August. The government downgraded its assessment on machinery orders, stating that the recovery was “showing signs of stalling.” Meanwhile, Bank of Japan board member Naoki Tamura said on Thursday that the central bank should raise interest rates toward levels considered neutral for the economy amid mounting inflationary pressures. “In order to prevent future shocks arising from possible rapid policy interest-rate hikes, I believe that the bank is now in the phase of deciding on raising its policy interest rate,” Tamura said. Still, economists at SMBC Nikko Securities said that Tamura’s hawkish remarks are unlikely to change the prevailing market view that an immediate rate hike is difficult. A senior International Monetary Fund official said on Wednesday that the BOJ should maintain an accommodative monetary stance and proceed very gradually with rate hikes as global trade uncertainty clouds the economic outlook. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -1.88% to 30.77.
The Japanese August Core Machinery Orders fell -0.9% m/m and rose +1.6% y/y, weaker than expectations of +0.4% m/m and +4.8% y/y.
Pre-Market U.S. Stock Movers
U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose over +1% in pre-market trading after the world’s biggest contract chipmaker reported record Q3 profit and raised its full-year revenue growth guidance.
AI-related U.S. heavyweights advanced in pre-market trading following TSMC’s results, with Nvidia (NVDA) and Broadcom (AVGO) rising more than +1%.
J.B. Hunt Transport Services (JBHT) surged more than +13% in pre-market trading after the logistics company posted better-than-expected Q3 results.
Salesforce (CRM) climbed over +5% in pre-market trading after announcing its financial goals for the next five years at its annual Dreamforce conference.
Hewlett Packard Enterprise (HPE) slumped over -8% in pre-market trading after the server and cloud company provided disappointing FY26 guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - October 16th
Charles Schwab (SCHW), Interactive Brokers (IBKR), Marsh McLennan (MMC), Bank of NY Mellon (BK), U.S. Bancorp (USB), CSX (CSX), Travelers (TRV), M&T Bank (MTB), KeyCorp (KEY), Snap-On (SNA), Commercial Metals (CMC), Glacier (GBCI), FNB (FNB), Bank Ozk (OZK), Cohen Steers (CNS), Simmons First National (SFNC), Liberty Oilfield (LBRT), ManpowerGroup (MAN), Insteel Industries (IIIN).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions 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.
