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December S&P 500 E-Mini futures (ESZ25) are up +0.19%, and December Nasdaq 100 E-Mini futures (NQZ25) are up +0.35% this morning, buoyed by ongoing tech and AI momentum, while investors await the Federal Reserve’s interest rate decision and U.S. megacap tech earnings. Stock index futures were boosted by a more than +3% rise in Nvidia (NVDA) in pre-market trading after U.S. President Donald Trump said he plans to discuss the chipmaker’s Blackwell AI processors with Chinese President Xi Jinping. In yesterday’s trading session, Wall Street’s major indexes closed at record highs. Nvidia (NVDA) climbed nearly +5% after CEO Jensen Huang delivered the keynote speech at the company’s GTC event, stating that the AI industry has “turned a corner” and announcing new partnerships and technologies. Also, Microsoft (MSFT) rose about +2% after the software giant finalized a new agreement with OpenAI that will give it a 27% ownership stake in the ChatGPT-maker valued at around $135 billion. In addition, Regeneron Pharmaceuticals (REGN) surged over +11% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the company posted better-than-expected Q3 results. On the bearish side, Alexandria Real Estate Equities (ARE) cratered more than -19% and was the top percentage loser on the S&P 500 after the life-science-focused REIT posted downbeat Q3 results and cut its full-year adjusted FFO guidance. Economic data released on Tuesday showed that the U.S. Conference Board’s consumer confidence index fell to 94.6 in October, stronger than expectations of 93.4. Also, the U.S. August S&P/CS HPI Composite - 20 n.s.a. eased to +1.6% y/y from +1.8% y/y in July, stronger than expectations of +1.4% y/y. In addition, the U.S. Richmond Fed manufacturing index rose to -4 in October, stronger than expectations of -11. Today, all eyes are focused on the Federal Reserve’s monetary policy decision. The Federal Open Market Committee is widely expected to deliver a 25 basis point rate cut for a second consecutive meeting. That would take the Fed funds rate to a range of 3.75% to 4.00%, the lowest level since late 2022. Market watchers will follow Chair Jerome Powell’s post-policy meeting press conference for clues on how far and how fast interest rates may fall from here. Notably, U.S. money markets have almost fully priced in a follow-up rate cut in December. Market participants will also watch for signals on when policymakers may stop shrinking the bank’s $6.6 trillion securities portfolio. Third-quarter corporate earnings season continues in full force. Investors will be closely monitoring earnings reports today from a trio of the Magnificent Seven companies—Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META). They will be seeking assurances that the multibillion-dollar investments in computing infrastructure will continue and ultimately deliver returns. Prominent companies like Caterpillar (CAT), ServiceNow (NOW), Boeing (BA), Verizon (VZ), KLA Corp. (KLAC), and CVS Health Corp. (CVS) are also scheduled to release their quarterly results today. 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. “We expect another strong round of megacap tech earnings reports, given the relentless demand for AI technology and infrastructure,” said Clark Bellin at Bellwether Wealth. “While profitability in AI remains an unknown, investors for right now are willing to overlook this as the AI arms race heats up”. On the economic data front, investors will focus on the National Association of Realtors’ pending home sales data, set to be released in a couple of hours. Economists forecast the September figure at +1.6% m/m, compared to the previous figure of +4.0% m/m. U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be -0.9 million barrels, compared to last week’s value of -1 million barrels. Meanwhile, the U.S. government shutdown has entered its 29th 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 3.992%, up +0.23%. The Euro Stoxx 50 Index is up +0.32% this morning as investors parse a new round of corporate earnings reports and await the Fed’s monetary policy decision. Mining stocks led the gains on Wednesday after copper hit an all-time high amid optimism surrounding the potential U.S.-China trade deal. Also, automobile stocks advanced, with Mercedes-Benz Group AG (MBG.D.DX) climbing over +5% after the automaker reported better-than-expected Q3 margins in its car business and reaffirmed its full-year guidance. Preliminary data from the National Statistics Institute released on Wednesday showed that Spain’s economic growth moderated in the third quarter, as strong household spending and steady employment were offset by weaker exports amid ongoing geopolitical uncertainty. Meanwhile, investors also remain focused on U.S. big-tech earnings, a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping, as well as the European Central Bank’s monetary policy decision. In other corporate news, Sweco AB (SWECB.S.DX) jumped over +11% after the Swedish consulting services provider reported stronger-than-expected Q3 EBITA. Also, Deutsche Bank AG (DBK.D.DX) rose more than +1% after the lender reported a surprise increase in Q3 profit. At the same time, Equinor ASA (EQNR.O.DX) fell about -1% after reporting weaker-than-expected Q3 profit. Spain’s GDP (preliminary) data was released today. The Spanish GDP has been reported at +0.6% q/q and +2.8% y/y in the third quarter, compared to expectations of +0.6% q/q and +3.0% y/y. Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.70%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.17%. China’s Shanghai Composite Index closed higher today on the prospect of a U.S.-China trade deal. Energy and non-ferrous metal stocks led the gains on Wednesday. The benchmark index closed above the key psychological 4,000 mark for the first time since 2015. U.S. President Donald Trump said on Wednesday that he expects to finalize a trade agreement with China when he meets with Chinese President Xi Jinping on Thursday. “President Xi of China is coming tomorrow here, and we’re going to be, I hope, making a deal, I think we’re going to have a deal, I think it’ll be a good deal for both,” Trump said in a speech at the APEC Summit. President Trump said earlier on Wednesday that he plans to reduce tariffs the U.S. has imposed on Chinese goods due to the fentanyl crisis and discuss Nvidia’s flagship Blackwell AI chip with Xi. The Wall Street Journal reported on Tuesday that Trump was weighing lowering the 20% tariff to 10% on Chinese goods over fentanyl. Jeremy Zook, lead analyst for China at Fitch Ratings, anticipates that Washington will reduce its effective tariff rate on Chinese goods to around 30% from about 40%. In another indication of easing tensions, China reportedly bought at least two cargoes of U.S. soybeans, marking its first known purchase of the season. Meanwhile, China released the full proposal of its five-year development plan on Tuesday, suggesting the country seeks to maintain economic growth within a “reasonable range,” which analysts interpret as a target of 4.5% to 5%. In corporate news, Sungrow Power Supply surged over +15% after the company posted better-than-expected Q3 net income. Japan’s Nikkei 225 Stock Index closed sharply higher today, topping the key 51,000 mark for the first time, supported by renewed optimism surrounding AI. Chip stocks rallied on Wednesday, with Advantest jumping over +22% after the company raised its full-year operating profit guidance by 25% amid booming AI demand. Also, SoftBank Group rose over +3% after the major investor in chips and AI was listed among the companies expressing interest in launching projects in the U.S. during President Donald Trump’s visit to Tokyo. Nomura Securities strategist Wataru Akiyama said, “Stocks such as Advantest and SoftBank Group are essentially driving the stock market. It’s unclear how long this will last. Once the initial wave passes, the upward momentum may ease.” Also buoying AI sentiment, bellwether Nvidia hit a new record high overnight after CEO Jensen Huang announced a series of partnerships and dismissed fears of an AI bubble. Meanwhile, the yen gained after U.S. Treasury Secretary Scott Bessent commented on the Bank of Japan’s policy space, fueling rate-hike bets. “The Government’s willingness to allow the Bank of Japan policy space will be key to anchoring inflation expectations and avoiding excess exchange rate volatility,” Bessent said in an X post. In other news, Japan’s government said in its monthly report released on Wednesday that the nation’s economy was recovering moderately in October, supported by robust capital spending. The government report also reiterated its cautiously optimistic view that the economy will continue to recover gradually, driven by improving employment conditions, while cautioning about downside risks from U.S. trade policies. Investor focus now turns to the BOJ’s monetary policy decision, with the central bank widely expected to keep its benchmark rate unchanged at 0.5% on Thursday. The central bank will also release its quarterly economic outlook alongside its policy statement. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +7.98% to 29.51. The Japanese October Household Confidence came in at 35.8, stronger than expectations of 35.5. Pre-Market U.S. Stock Movers Nvidia (NVDA) rose over +3% in pre-market trading after U.S. President Donald Trump said he plans to discuss the chipmaker’s Blackwell AI processors with Chinese President Xi Jinping. You can see more pre-market stock movers here Today’s U.S. Earnings Spotlight: Wednesday - October 29th Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), Caterpillar (CAT), ServiceNow Inc (NOW), Boeing (BA), Verizon (VZ), KLA Corp. (KLAC), MercadoLibre (MELI), ADP (ADP), CVS Health Corp (CVS), Starbucks (SBUX), Carvana (CVNA), Agnico Eagle Mines (AEM), TE Connectivity (TEL), Fiserv (FI), Canadian Pacific Kansas City (CP), Fannie Mae (FNMA), American Electric Power (AEP), Phillips 66 (PSX), Chipotle Mexican Grill (CMG), Public Storage (PSA), Garmin (GRMN), eBay (EBAY), Entergy (ETR), Otis Worldwide (OTIS), Banco Bradesco (BBD), Prudential Financial (PRU), Cognizant A (CTSH), Extra Space Storage (EXR), Verisk (VRSK), Ventas (VTR), Kraft Heinz (KHC), Old Dominion Freight Line (ODFL), Rollins (ROL), American Water Works (AWK), AvalonBay (AVB), Flex (FLEX), Smurfit Westrock (SW), Tyler Technologies (TYL), AerCap Holdings NV (AER), NiSource (NI), United Therapeutics (UTHR), Essex Property (ESS), Invitation Homes (INVH), Fortive (FTV), Centene (CNC), Mid-America Apartment (MAA), Sun (SUI), CH Robinson (CHRW), Carlisle (CSL), Masco (MAS), Watsco (WSO), AMH 4 Rent (AMH), ITT (ITT), Alamos Gold (AGI), Clean Harbors (CLH), UDR (UDR), Evercore (EVR), Encompass Health (EHC), IDEX (IEX), Ionis Pharma (IONS), Coeur Mining (CDE), Generac (GNRC), Penske Automotive (PAG), Dayforce (DAY), Sprouts Farmers (SFM), Avantor (AVTR), Antero Resources Corp (AR), Align (ALGN), Regal Beloit (RRX), DaVita (DVA), Morningstar (MORN), OGE Energy (OGE), Pilgrims Pride (PPC), Gildan Activewear (GIL), Bio-Rad Labs (BIO), Oshkosh (OSK), Guardant Health (GH), MGM (MGM), Antero Midstream (AM), Cognex (CGNX), Murphy USA Inc (MUSA), Waystar Holding (WAY), Etsy Inc (ETSY), STAG Industrial (STAG), Axis Capital (AXS), Impinj (PI), Allison Transmission (ALSN), Gates Industrial Corp (GTES), Littelfuse (LFUS), MGIC Investment (MTG), TTM (TTMI), The Hanover Insurance (THG), Boot Barn Holdings (BOOT), Prosperity Bancshares (PB), Moelis & Co (MC), Brinker (EAT), Siteone Landscape Supply (SITE), Wex (WEX), Bausch + Lomb (BLCO), Ufp Industries (UFPI), Timken (TKR), Virtu Financial Inc (VIRT), Kite Realty (KRG), Reynolds (REYN), Kirby (KEX), Silgans (SLGN), Wolfspeed (WOLF), TransMedics (TMDX), Archrock (AROC), Magnolia Oil (MGY), Rush Street Interactive (RSI), Glaukos Corp (GKOS), Avnet (AVT), Transocean (RIG).
