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December S&P 500 E-Mini futures (ESZ25) are trending down -0.02% this morning, taking a breather after a record-breaking rally, while investors await the start of the Federal Reserve’s two-day policy meeting, a new round of corporate earnings reports, and U.S. private-sector economic data. In yesterday’s trading session, Wall Street’s main stock indexes closed at record highs. The Magnificent Seven stocks climbed, with Tesla (TSLA) rising over +4% and Nvidia (NVDA) advancing more than +2% to lead gainers in the Dow. Also, Qualcomm (QCOM) surged over +11% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after introducing new chips and computers for the lucrative AI data center market. In addition, Avidity Biosciences (RNA) soared more than +42% after Novartis agreed to acquire the company in a deal valued at about $12 billion. On the bearish side, rare earth stocks slumped after Treasury Secretary Scott Bessent said he anticipated China would postpone the implementation of its stricter export controls on rare earths, with USA Rare Earth (USAR) sliding over -8% and MP Materials (MP) falling more than -7%. The Federal Reserve kicks off its two-day meeting later in the day. The central bank is widely expected to deliver a 25 basis point rate cut on Wednesday, particularly after last Friday’s mostly favorable September inflation data. That would take the Fed funds rate to a range of 3.75% to 4.00%, the lowest level since late 2022. Investors will closely follow Chair Jerome Powell’s post-policy meeting press conference for clues on how far and how fast interest rates may fall from here. U.S. money markets have almost fully priced in a follow-up rate cut in December. Third-quarter corporate earnings season is in full swing, with investors looking ahead to new reports from prominent companies today, including Visa (V), UnitedHealth Group (UNH), Booking (BKNG), United Parcel Service (UPS), and PayPal (PYPL). 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. “With the Fed on track to cut rates, extending the run would appear to hinge on this week’s lineup of high-profile earnings releases. And it may, barring any surprises in U.S.-China trade negotiations,” said Chris Larkin at E*Trade from Morgan Stanley. On the economic data front, investors will focus on the U.S. Conference Board’s Consumer Confidence Index, which is set to be released in a couple of hours. Economists, on average, forecast that the October CB Consumer Confidence index will stand at 93.4, compared to last month’s figure of 94.2. The U.S. S&P/CS HPI Composite - 20 n.s.a. will also be reported today. Economists expect the August figure to ease to +1.4% y/y from +1.8% y/y in July. The U.S. Richmond Fed Manufacturing Index will be released today as well. Economists foresee this figure coming in at -11 in October, compared to the previous value of -17. Meanwhile, the U.S. government shutdown has entered its 28th day, with no clear resolution in sight. The shutdown means that official U.S. economic data continue to be delayed. Allianz Research estimates that the shutdown has likely already shaved 0.45 percentage points off fourth-quarter annualized GDP growth. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.973%, down -0.58%. The Euro Stoxx 50 Index is down -0.18% this morning, retreating from a record high as investors digest a flurry of corporate earnings reports. Construction and energy stocks underperformed on Tuesday. A survey released on Tuesday showed that German consumer sentiment is set to weaken heading into November, as income expectations slumped amid ongoing geopolitical uncertainty and elevated inflation. “The continuing weakness of the consumer climate gives rise to fears that a noticeable recovery in private consumption will be some time coming,” Deutsche Bank Research’s Marc Schattenberg said in a note. Meanwhile, investors are preparing for a string of monetary policy decisions from major central banks this week, including those from the European Central Bank and the Federal Reserve. Investor focus also remains on a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping on Thursday. In corporate news, Novartis AG (NOVN.Z.IX) fell over -3% after the Swiss pharmaceuticals company posted weaker-than-expected Q3 earnings. Also, BNP Paribas (BNP.FP) dropped more than -2% after the French bank missed analysts’ Q3 profit estimates. At the same time, Nordex SE (NDX1.D.DX) surged over +14% after the wind-turbine maker raised its full-year EBITDA margin guidance. In addition, Capgemini (CAP.FP) climbed more than +5% after boosting its full-year revenue growth guidance. Germany’s GfK Consumer Climate Index was released today. The German November GfK Consumer Climate Index came in at -24.1, weaker than expectations of -22.0. Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.22%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.58%. China’s Shanghai Composite Index ended lower today amid some profit-taking ahead of a high-stakes meeting between U.S. President Donald Trump and Chinese leader Xi Jinping. Non-ferrous metal stocks led the declines on Tuesday. Trump and Xi are set to meet on Thursday on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju, South Korea, where they are expected to finalize a trade agreement. Trump told reporters on Monday that he feels “really good” about a deal with China, after top trade negotiators from both countries unveiled a series of agreements aimed at easing tensions. The benchmark index briefly surpassed the key psychological 4,000 mark on Tuesday, signaling investors’ cautious yet generally optimistic outlook amid easing trade tensions. Meanwhile, the China Securities Regulatory Commission unveiled a new plan on Monday to streamline the qualified foreign investor program, introducing measures to ease access requirements, enhance operational efficiency, and broaden the investment scope. In other news, People’s Bank of China Governor Pan Gongsheng said on Monday that the central bank would “maintain its supportive monetary policy stance and implement moderately loose monetary measures.” In corporate news, Flat Glass Group surged over +12% in Hong Kong after the solar-glass provider posted better-than-expected Q3 revenue and gross margin. Japan’s Nikkei 225 Stock Index closed lower today as investors locked in profits following Monday’s rally. Energy and industrial stocks led the declines on Tuesday. Kazuaki Shimada, chief strategist at IwaiCosmo Securities, said, “Investors wanted to book profits today, but the decline was small relative to the sharp gains in the previous session.” Japanese equities were also pressured by a stronger yen. The Japanese currency strengthened after U.S. Treasury Secretary Scott Bessent and newly appointed Japanese Finance Minister Satsuki Katayama held talks on exchange rate volatility. The secretary also cited the role of “sound monetary policy formulation and communication in anchoring inflation expectations.” Separately, Japan’s Minister for Growth Strategy Minoru Kiuchi said officials will continue to monitor the impact of yen weakness on the economy. Meanwhile, U.S. President Donald Trump lauded the U.S.-Japan alliance and commended new Prime Minister Sanae Takaichi’s plans to boost defense spending. Trump and Takaichi signed accords on trade and critical minerals, though the details of the agreements remain unclear. Investors now await the Bank of Japan’s monetary policy decision later this week, where the central bank is expected to keep its benchmark rate unchanged at 0.5%. Attention will center on how the nine-member policy board divides its votes. The central bank will also release its quarterly economic outlook alongside its policy statement. In corporate news, Nidec cratered over -19% after Nikkei Inc. announced the stock would be removed from its benchmark on November 5th, while the Tokyo Stock Exchange placed the company on watch for potential delisting. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.71% to 27.33. Pre-Market U.S. Stock Movers Qorvo (QRVO) surged over +10% in pre-market trading after The Information reported that Apple supplier Skyworks Solutions held talks in recent months to buy the company. You can see more pre-market stock movers here Today’s U.S. Earnings Spotlight: Tuesday - October 28th Visa (V), UnitedHealth (UNH), NextEra Energy (NEE), Booking (BKNG), American Tower (AMT), Royal Caribbean Cruises (RCL), Sherwin-Williams (SHW), Mondelez (MDLZ), Ecolab (ECL), Corning (GLW), United Parcel Service (UPS), PayPal (PYPL), Regeneron Pharma (REGN), Electronic Arts (EA), Carrier Global (CARR), Seagate (STX), DR Horton (DHI), ONEOK (OKE), MSCI (MSCI), Sysco (SYY), IQVIA Holdings (IQV), Xylem (XYL), SoFi Technologies (SOFI), CoStar (CSGP), Fomento Economico Mexicano (FMX), Amrize (AMRZ), Veralto (VLTO), Equity Residential (EQR), Expand Energy (EXE), Bloom Energy (BE), PPG Industries (PPG), Teradyne (TER), Hubbell (HUBB), Labcorp Holdings (LH), Edison (EIX), Check Point Software (CHKP), Tenet Healthcare (THC), Incyte (INCY), Banco De Chile (BCH), Zebra (ZBRA), Logitech (LOGI), Neurocrine (NBIX), W P Carey Inc (WPC), Ares Capital (ARCC), Regency Centers (REG), BXP Inc (BXP), ATI Inc (ATI), Renaissancere (RNR), Wayfair Inc (W), Invesco (IVZ), Applied Industrial Technologies (AIT), AO Smith (AOS), New Oriental Education&Tech (EDU), Aurora Innovation (AUR), Frontier Communications Parent (FYBR), Repligen (RGEN), Range Resources (RRC), Armstrong World Industries (AWI), MakeMyTrip (MMYT), UMB Financial (UMBF), Modine Manufacturing (MOD), Zurn Water Solutions (ZWS), CommVault (CVLT), Varonis Systems (VRNS), Flowserve (FLS), ExlServices (EXLS), MSA Safety (MSA), VF (VFC), Stride (LRN), Element Solutions (ESI), Chemed (CHE), Axalta Coating Systems (AXTA), Red Rock Resorts (RRR), Mirion Technologies (MIR), Group 1 Automotive (GPI), Meritage (MTH), New Gold (NGD), Enphase (ENPH), Asbury Automotive (ABG), Caesars (CZR), Sensata Tech (ST), Landstar (LSTR), Franklin Electric (FELE), Herc Holdings (HRI), Polaris Industries (PII), GeneDx Holdings (WGS), VSE Corporation (VSEC), Kadant (KAI), Renasant (RNST), Highwoods Properties (HIW), Kiniksa Pharma (KNSA), The Cheesecake (CAKE), Acadia (AKR), Four Corners Property Trust Inc (FCPT), Huron (HURN), Arcutis (ARQT), Trustmark (TRMK), Inventrust Properties (IVT), Centerra Gold (CGAU), Phinia (PHIN), HNI (HNI).
