December S&P 500 E-Mini futures (ESZ25) are down -0.05%, and December Nasdaq 100 E-Mini futures (NQZ25) are down -0.11% this morning as investors weigh the outcome of the highly anticipated Trump-Xi meeting, mixed Big Tech earnings, and a cautious Federal Reserve.
U.S. President Donald Trump and Chinese President Xi Jinping met in person for the first time in six years on Thursday, emerging from what Trump described as “an amazing meeting.” Mr. Trump announced that fentanyl tariffs would be lowered from 20% to 10% effective immediately. The decision was part of a broader framework to ease trade tensions, which Trump said included China’s agreement to lift restrictions on the global trade of its rare earth elements. China’s commerce ministry said it would suspend rare earth export controls for one year, while the U.S. agreed to keep reciprocal tariffs suspended for the same period. China also agreed to resume purchases of U.S. soybeans. The meeting’s outcome was broadly in line with market expectations.
Investors also digested earnings reports from a trio of U.S. tech giants. Alphabet (GOOGL) surged over +7% in pre-market trading after the Google-parent posted upbeat Q3 results. At the same time, Meta Platforms (META) slumped more than -7% in pre-market trading after the maker of Facebook and Instagram reported weaker-than-expected Q3 EPS. Also, Mark Zuckerberg’s pledge to ramp up spending on artificial intelligence has renewed investor concerns that the company may lack a clear path to returns on these investments. In addition, Microsoft (MSFT) fell about -3% in pre-market trading after the technology behemoth reported FQ1 revenue growth in its Azure cloud-computing unit that failed to meet lofty expectations.
Investors now await earnings reports from Magnificent Seven companies Apple and Amazon.
As widely expected, the Federal Reserve cut interest rates yesterday. The Federal Open Market Committee voted 10-2 to lower the target range for the Fed funds rate by a quarter percentage point to 3.75%-4.00%, the lowest in three years. Governor Stephen Miran once again dissented, advocating for a larger half-point rate cut. At the same time, Kansas City Fed President Jeff Schmid said he would have preferred to leave rates unchanged. In a post-meeting statement, officials reiterated that “job gains have slowed” and noted that “risks to employment rose in recent months.” Policymakers also described economic growth as “moderate” and stated that inflation “has moved up since earlier this year and remains somewhat elevated.” In addition, officials agreed to stop shrinking the Fed’s $6.6 trillion asset portfolio starting December 1st.
At a press conference, Chair Jerome Powell threw some cold water on market expectations of another rate cut in December. “In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at our December meeting is not a foregone conclusion—far from it. Policy is not on a preset course,” he said. The Fed chair also noted that the absence of economic data during the ongoing government shutdown could prompt policymakers to take a more cautious approach.
“Given these dissents on both sides, it might be difficult to put a down payment on December,” said Neil Dutta at Renaissance Macro Research.
U.S. rate futures have priced in a 70.4% chance of a 25 basis point rate cut and a 29.6% chance of no rate change at the next FOMC meeting in December.
In yesterday’s trading session, Wall Street’s three main equity benchmarks closed mixed. Nvidia (NVDA) rose about +3% after U.S. President Donald Trump said he plans to discuss the chipmaker’s Blackwell AI processors with Chinese President Xi Jinping. Also, Teradyne (TER) jumped more than +20% and was the top percentage gainer on the S&P 500 after the automatic test equipment designer posted upbeat Q3 results and issued above-consensus Q4 guidance. In addition, Caterpillar (CAT) surged over +11% and was the top percentage gainer on the Dow after the maker of heavy construction equipment reported stronger-than-expected Q3 results. On the bearish side, Fiserv (FI) plummeted more than -44% and was the top percentage loser on the S&P 500 after the financial-technology company posted downbeat Q3 results and cut its full-year adjusted EPS guidance.
Economic data released on Wednesday showed that U.S. pending home sales were unchanged m/m in September, weaker than expectations of +1.6% m/m.
Third-quarter corporate earnings season rolls on. Today, market participants will pay close attention to earnings reports from Magnificent Seven companies Apple (AAPL) and Amazon.com (AMZN). High-profile companies such as Eli Lilly (LLY), Mastercard (MA), Merck & Co. (MRK), Gilead (GILD), and Altria (MO) are also set to report their quarterly figures 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.
Investors will also parse comments today from Fed Vice Chair for Supervision Michelle Bowman and Dallas Fed President Lorie Logan.
Meanwhile, the U.S. government shutdown has entered its 30th day, with no clear resolution in sight. In light of the government shutdown, the publication of the advance estimate of third-quarter gross domestic product and weekly jobless claims, originally set for today, will 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 4.067%, up +0.20%.
The Euro Stoxx 50 Index is down -0.29% this morning as investors digest corporate earnings reports, key regional economic data, and the outcome of the Trump-Xi meeting, while also awaiting the European Central Bank’s monetary policy decision. Media stocks underperformed on Thursday, while technology stocks gained ground. Preliminary data from Eurostat released on Thursday showed that the Eurozone economy expanded slightly faster than expected in the third quarter as it adjusted to higher U.S. tariffs. Separately, preliminary data from the statistics agency INE showed that Spain’s annual inflation rate unexpectedly accelerated in October, though it is unlikely to sway ECB officials. In addition, data showed that the number of unemployed people in Germany unexpectedly fell slightly in October, reinforcing the government’s somewhat more optimistic outlook for economic growth. Meanwhile, investors are awaiting the ECB’s interest rate decision later in the session. The central bank is widely expected to keep the deposit rate unchanged at 2.00%. Comments from President Christine Lagarde will be scrutinized for any indications of a potential further rate cut in the coming months. Investors are also awaiting preliminary inflation data from Germany later in the day. In corporate news, WPP Plc (WPP.LN) tumbled over -10% after issuing a profit warning. At the same time, Standard Chartered Plc (STAN.LN) rose more than +1% after the lender posted better-than-expected Q3 profit and raised its full-year guidance for income and returns.
Spain’s CPI (preliminary), Germany’s Unemployment Change, Germany’s Unemployment Rate, Eurozone’s GDP (preliminary), Eurozone’s Business and Consumer Survey, Eurozone’s Consumer Confidence, and Eurozone’s Unemployment Rate were released today.
The Spanish October CPI rose +3.1% y/y, stronger than expectations of +2.9% y/y.
The German October Unemployment Change stood at -1K, stronger than expectations of 8K.
The German October Unemployment Rate was 6.3%, in line with expectations.
Eurozone’s GDP has been reported at +0.2% q/q and +1.3% y/y in the third quarter, stronger than expectations of +0.1% q/q and +1.2% y/y.
Eurozone’s October Business and Consumer Survey arrived at 96.8, stronger than expectations of 95.7.
Eurozone’s October Consumer Confidence came in at -14.2, in line with expectations.
Eurozone’s September Unemployment Rate was 6.3%, in line with expectations.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.73%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.04%.
China’s Shanghai Composite Index ended lower today after the high-stakes meeting between U.S. President Donald Trump and Chinese leader Xi Jinping concluded with few positive surprises. AI-related stocks slumped on Thursday as investors locked in profits. Trump said he had an “amazing meeting” with Xi and announced that fentanyl tariffs would be lowered from 20% to 10% effective immediately. Trump said Xi would work “very hard to stop the flow” of fentanyl and that the tariff reduction came “because I believe they are really taking strong action.” The decision was part of a broader framework to ease trade tensions, which Trump said included China’s agreement to lift restrictions on the global trade of its rare earth elements. China also agreed to resume purchases of U.S. soybeans. Meanwhile, China’s commerce ministry said it would suspend rare earth export controls for one year, while the U.S. agreed to keep reciprocal tariffs suspended for the same period. The ministry also said that both sides will appropriately address issues related to TikTok. Anna Wu, cross-asset strategist at Van Eck Associates Corp., said, “Markets view this as a tactical truce rather than a long-term deal, meaning the medium-term outlook could stay volatile.” Separately, Capital Economics economist Julian Evans-Pritchard said that the partial rollback of U.S. tariffs on China would likely have little effect, as Chinese exporters had largely shrugged them off. Investor attention now shifts to China’s official PMIs for October, scheduled for release on Friday.
Japan’s Nikkei 225 Stock Index closed just above the flatline today after the Bank of Japan left its policy rate unchanged. Japanese equities were also swept up in choppy trading across global markets as U.S. President Donald Trump and Chinese President Xi Jinping concluded their highly anticipated summit in South Korea. Utilities and financial stocks advanced on Thursday, while retail and technology stocks retreated. The BOJ kept rates unchanged on Thursday but reaffirmed its commitment to raise borrowing costs if the economy evolves in line with its projections. As widely expected, the central bank maintained its overnight call rate target at 0.5%, extending its pause since the last increase in January. Notably, policy board members Naoki Tamura and Hajime Takata dissented from the decision, reiterating their proposals from September to raise rates to 0.75%. The BOJ left its economic projections largely unchanged and signaled ongoing caution over the impact of U.S. tariffs, suggesting that policymakers are in no hurry to raise rates again. The Japanese currency reversed an early gain and weakened following the BOJ decision. It extended its drop after Governor Kazuo Ueda provided few details at a press conference about when the central bank might next raise rates. Meanwhile, State Street Investment Management sees a high probability of a BOJ rate hike within the next two policy meetings once global trade-related volatility is more clearly evaluated. In other news, foreign investors bought a net 1.34 trillion yen ($8.89 billion) worth of Japanese stocks during the week ended October 25th on bets on large-scale stimulus under Prime Minister Sanae Takaichi’s administration. In corporate news, Lasertec jumped over +21% after Nvidia reached a $5 trillion market capitalization, fueling expectations of increased investment in advanced chipmaking to develop AI. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -0.54% to 29.35.
Pre-Market U.S. Stock Movers
Alphabet (GOOGL) surged over +7% in pre-market trading after the Google-parent posted upbeat Q3 results.
Eli Lilly and Company (LLY) gained more than +4% in pre-market trading after the drugmaker reported better-than-expected Q3 results and raised its full-year guidance.
Meta Platforms (META) slumped more than -7% in pre-market trading after the maker of Facebook and Instagram reported weaker-than-expected Q3 EPS. Also, Mark Zuckerberg’s pledge to ramp up spending on artificial intelligence has renewed investor concerns that the company may lack a clear path to returns on these investments.
Microsoft (MSFT) fell about -3% in pre-market trading after the technology behemoth reported FQ1 revenue growth in its Azure cloud-computing unit that failed to meet lofty expectations.
Chipotle Mexican Grill (CMG) plunged over -18% in pre-market trading after the burrito chain cut its full-year comparable restaurant sales growth guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - October 30th
Apple (AAPL), Amazon.com (AMZN), Eli Lilly (LLY), Mastercard (MA), Merck & Co (MRK), Gilead (GILD), S&P Global (SPGI), Stryker (SYK), Comcast (CMCSA), Altria (MO), Southern (SO), Trane Technologies (TT), Roblox (RBLX), Coinbase Global (COIN), ICE (ICE), Bristol-Myers Squibb (BMY), Howmet (HWM), Cigna (CI), Strategy (MSTR), Cloudflare (NET), Motorola (MSI), Quanta Services (PWR), Arthur J Gallagher (AJG), Enterprise Products Partners LP (EPD), Republic Services (RSG), Alnylam (ALNY), L3Harris Technologies (LHX), Monolithic (MPWR), Rocket (RKT), Edwards Lifesciences (EW), Western Digital (WDC), Xcel Energy (XEL), Cheniere Energy (LNG), Ameriprise Financial (AMP), Ametek (AME), Atlassian Corp Plc (TEAM), Reddit (RDDT), Vulcan Materials (VMC), Kimberly-Clark (KMB), Cardinal Health (CAH), ResMed (RMD), WEC Energy (WEC), Estee Lauder (EL), Hershey Co (HSY), Ambev SA (ABEV), Insmed (INSM), EMCOR (EME), Stellantis NV (STLA), Ingersoll Rand (IR), VICI Properties (VICI), Willis Towers Watson (WTW), Restaurant Brands Int (QSR), DTE Energy (DTE), Kellanova (K), LPL Financial (LPLA), Fox Corp A (FOXA), DexCom (DXCM), First Solar (FSLR), Blue Owl Capital (OWL), Tradeweb Markets (TW), International Paper (IP), Biogen (BIIB), CMS Energy (CMS), Aptiv (APTV), GoDaddy (GDDY), Twilio (TWLO), MasTec (MTZ), Zillow Group Inc (ZG), Weyerhaeuser (WY), Erie Indemnity (ERIE), Illumina (ILMN), XPO (XPO), Kimco Realty (KIM), Entegris (ENTG), Api Group Corp (APG), Roku (ROKU), Houlihan Lokey Inc (HLI), Ryan Specialty Group Holdings (RYAN), Lincoln Electrics (LECO), Gaming & Leisure Properties (GLPI), Reinsurance of America (RGA), Huntington Ingalls Industries (HII), Baxter (BAX), Omega Healthcare (OHI), WESCO (WCC), Lumen Technologies (LUMN), DT Midstream (DTM), HF Sinclair (DINO), SPX Corp (SPXC), InterDigital (IDCC), Westlake Chemical (WLK), BorgWarner (BWA), CubeSmart (CUBE), Appfolio Inc (APPF), AptarGroup (ATR), Riot Platforms (RIOT), Columbia Banking (COLB), Cullen/Frost Bankers (CFR), Federal Signal (FSS), LKQ (LKQ), Floor & Decor (FND), Lincoln National (LNC), Eagle Materials (EXP), Saia (SAIA).
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.
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