December Nasdaq 100 E-Mini futures (NQZ26) are up +0.45% this morning as strong results from SpaceX helped revive modest optimism surrounding the AI trade.
SpaceX (SPCX) surged over +9% in pre-market trading after the rocket and AI company posted upbeat Q3 results and CEO Elon Musk said he expects annual recurring revenue of between $500 billion and $1 trillion by the end of 2027. Musk also said SpaceX and Tesla have established committees to evaluate a possible merger. In addition, the company projected Q4 capital expenditures of $35 billion to $40 billion, a sharp increase from the previous quarter.
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SpaceX’s results and guidance, along with a report that Anthropic PBC could spend $750 billion on computing power in the coming years, helped alleviate investor worries about a potential slowdown in the AI investment boom. Also buoying sentiment toward the AI trade, Super Micro Computer (SMCI) jumped more than +12% in pre-market trading after the AI server maker reported preliminary Q1 revenue and gross margins above its previous guidance. Taken together, these developments lifted chip and AI infrastructure stocks in pre-market trading.
However, the positive mood was tempered by a renewed rise in oil prices. WTI crude rose over +2% on Wednesday as continued attacks on vessels in the Strait of Hormuz threatened oil shipments, while preliminary data indicated a decline in U.S. crude inventories.
Investors are now looking ahead to a new round of corporate earnings reports, with particular attention on results from Magnificent Seven heavyweights Meta Platforms and Tesla.
In yesterday’s trading session, Wall Street’s major indexes closed mostly higher, buoyed by lower oil prices and expectations of a solid earnings season. Equifax (EFX) jumped over +11% and was the top percentage gainer in the S&P 500 after the credit bureau posted better-than-expected Q3 adjusted EPS. Also, some chip and AI infrastructure stocks advanced, with NXP Semiconductors N.V. (NXPI) and ON Semiconductor (ON) rising over +3%. In addition, 3M Company (MMM) climbed over +5% and was the top percentage gainer in the Dow after the company reported stronger-than-expected Q3 adjusted EPS, raised its full-year adjusted EPS guidance, and expanded its data center products deal with Amazon. On the bearish side, General Motors (GM) slumped more than -6% and was the top percentage loser in the S&P 500 after the automaker narrowed its full-year adjusted EPS guidance.
Economic data released on Tuesday centered on the U.S. housing market and were negative for equities. U.S. September housing starts unexpectedly fell -5.2% m/m to a 4-month low of 1.221 million, weaker than expectations of 1.300 million, and building permits, a proxy for future construction, slipped -0.2% m/m to 1.400 million but still exceeded expectations of 1.390 million. Separately, U.S. pending home sales tanked -7.3% m/m in September, weaker than expectations of -0.7% m/m.
Third-quarter corporate earnings season rolls on, with all eyes today on Magnificent Seven stalwarts Meta Platforms (META) and Tesla (TSLA). The Facebook parent and the EV maker are scheduled to release their quarterly results after the bell, kicking off the megacap reporting season. Investors will scrutinize Meta’s earnings report for details on its Q3 capital expenditures, any indications of its 2027 spending plans, and management’s commentary on AI monetization. As for Tesla, investors will, as usual, pay far more attention to the company’s earnings call than to its headline numbers, looking for updates from CEO Elon Musk on initiatives such as FSD and robotaxis, humanoid robots, and AI. Other major companies set to report today include Lam Research (LRCX), Texas Instruments (TXN), International Business Machines (IBM), Philip Morris (PM), and AT&T Inc. (T). 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, investors will focus on the EIA’s Weekly Petroleum Status Report, set to be released later today. Economists expect crude oil inventories to decline by 0.1 million barrels in the week ended Oct. 16, compared with a decrease of 8.6 million barrels in the prior week.
U.S. rate futures are currently pricing in an 85.1% chance of no rate change and a 14.9% chance of a 25-basis-point rate hike at next week’s FOMC meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 5.12%, up +0.09%.
The Euro Stoxx 50 Index is up +0.58% this morning as investors welcomed a raft of positive corporate earnings reports, though rising oil prices capped gains. Luxury stocks climbed on Wednesday, with EssilorLuxottica (EL.FP) surging more than +13% after the eyewear group reported better-than-expected Q3 revenue. Technology stocks also advanced as strong earnings from SpaceX and Super Micro Computer helped ease worries about the AI trade. At the same time, automobile stocks underperformed. Data from the Office for National Statistics released on Wednesday showed that the U.K.’s annual inflation rate picked up more than expected in September, driven by higher energy costs. The data strengthened the case for the Bank of England to hike interest rates in November for the first time since the outbreak of the U.S.-Iran war. Meanwhile, Eurozone government bond yields rose on Wednesday, led by a further rise in French borrowing costs, as concerns over inflation, fiscal deficits, and debt persisted. In other corporate news, Randstad N.V. (RAND.NA) jumped over +20% after the Dutch staffing firm posted stronger-than-expected Q3 results and signaled improving business trends this month.
U.K. CPI and Core CPI were released today.
U.K. September CPI rose +0.4% m/m and +3.5% y/y, stronger than expectations of +0.3% m/m and +3.4% y/y.
U.K. September Core CPI rose +0.2% m/m and +2.8% y/y, in line with expectations.
Asian stock markets today settled mixed. China’s Shanghai Composite Index ($CHSC) closed down -0.60%, and Japan’s Nikkei 225 Stock Index ($NKY) closed up +0.85%.
China’s Shanghai Composite Index closed lower today as CATL’s earnings miss and mounting concerns about the health of the nation’s consumer sector dampened sentiment. Contemporary Amperex Technology tanked over -12% in Shenzhen after the world’s largest battery manufacturer posted slower-than-expected quarterly profit growth. Analysts warned that the company and its peers could struggle with pressures stemming from the reinstatement of a domestic consumption tax and the expiration of other fiscal incentives. Losses in liquor and new energy stocks also weighed on the benchmark index. Analysts said investors were signaling their pessimism about China’s sluggish domestic demand by selling consumer stocks ahead of third-quarter earnings reports. Pop Mart International, for example, slid more than -4% in Hong Kong as investors braced for disappointing Q3 results from the toymaker. Nomura’s Jizhou Dong and Summer Qian noted that uncertainty remains over whether the rebound in China’s retail sales recorded in September can be sustained.
Japan’s Nikkei 225 Stock Index closed higher today as strong results from U.S. technology companies revived investors’ appetite for risk. The buoyant mood on Wall Street overnight provided an additional boost. Chip-related stocks were among the biggest gainers on Wednesday after earnings from SpaceX and Super Micro Computer exceeded expectations. Gains in bank and mining stocks also supported the benchmark. Data released on Wednesday showed that Japan’s exports rose for a 13th consecutive month in September, driven by higher shipments of semiconductors and automobiles. Strong exports reinforce the Bank of Japan’s view that the Middle East conflict is unlikely to cause a sharp downturn in the domestic economy, giving the central bank greater flexibility as it considers the timing of its next interest-rate increase. Meanwhile, BOJ Deputy Governor Ryozo Himino said on Wednesday that Japan’s underlying inflation is nearing the central bank’s 2% target and financial conditions remain accommodative, signaling a willingness to raise interest rates. “Given that inflation risks are high, delaying necessary adjustment to monetary support could materialize such risks and hurt the economy in the long run,” Himino said. Elsewhere, Finance Minister Satsuki Katayama said on Wednesday that Japan’s economy is grappling with price pressures stemming from higher import costs but is nearing a shift toward sustained inflation driven by wage growth. Investor focus for the remainder of the week is on Japan’s national core CPI for September. Market participants will also closely monitor Japan’s flash October PMIs, which will provide insight into whether growth remains widespread across the manufacturing and services sectors. In addition, the BOJ will publish its semiannual Financial System Report at the end of the week. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.13% at 30.85.
The Japanese September Trade Balance stood at -536.6 billion yen, weaker than expectations of -181 billion yen.
The Japanese September Exports rose +16.7% y/y, weaker than expectations of +20.1% y/y.
The Japanese September Imports rose +18.9% y/y, weaker than expectations of +19.6% y/y.
Pre-Market U.S. Stock Movers
SpaceX (SPCX) surged over +9% in pre-market trading after the rocket and AI company posted upbeat Q3 results and CEO Elon Musk said he expects annual recurring revenue of between $500 billion and $1 trillion by the end of 2027. Musk also said SpaceX and Tesla have established committees to evaluate a possible merger.
Super Micro Computer (SMCI) jumped more than +12% in pre-market trading after the AI server maker reported preliminary Q1 revenue and gross margins above its previous guidance.
Chip and AI infrastructure stocks advanced in pre-market trading following strong results from SpaceX and Super Micro Computer. Sandisk (SNDK) was up over +2%, while Intel (INTC) and Micron Technology (MU) each rose more than +1%.
Netflix (NFLX) slumped more than -6% in pre-market trading after the streaming giant issued below-consensus Q4 guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - October 21st
Meta Platforms (META), Tesla (TSLA), Lam Research (LRCX), Philip Morris International (PM), Texas Instruments (TXN), Thermo Fisher Scientific (TMO), International Business Machines (IBM), Abbott Laboratories (ABT), NextEra Energy (NEE), AT&T Inc. (T), Danaher (DHR), CME Group (CME), Elevance Health (ELV), CSX Corporation (CSX), Moody's (MCO), Kinder Morgan (KMI), United Rentals (URI), Westinghouse Air Brake Technologies (WAB), Waste Connections (WCN), Crown Castle (CCI), Northern Trust (NTRS), Teledyne Technologies (TDY), Las Vegas Sands (LVS), Reliance (RS), Packaging Corporation of America (PKG), Southwest Airlines Co. (LUV), Medpace Holdings (MEDP), Rollins (ROL), Pinnacle Financial Partners (PNFP), CACI International (CACI), Graco (GGG), Globe Life (GL), SEI Investments Company (SEIC), Molina Healthcare (MOH), EastGroup Properties (EGP), Knight-Swift Transportation Holdings (KNX), Stifel Financial (SF), SouthState Bank (SSB), Old National Bancorp (ONB), Element Solutions (ESI), First Industrial Realty Trust (FR), Hexcel (HXL), First American Financial (FAF), Lithia Motors (LAD), Wyndham Hotels & Resorts (WH), Weatherford International (WFRD), Essential Properties Realty Trust (EPRT), Sonoco Products Company (SON), UniFirst (UNF), Oceaneering International (OII), Fulton Financial (FULT), Cathay General Bancorp (CATY), Texas Capital Bancshares (TCBI), CVB Financial (CVBF), WesBanco (WSBC), SL Green Realty (SLG), M/I Homes (MHO), BankUnited (BKU), Liberty Energy (LBRT), WD-40 Company (WDFC), First Merchants (FRME), QuantumScape (QS), Kaiser Aluminum (KALU), Beacon Financial (BBT), Banner (BANR), OFG Bancorp (OFG), Enterprise Financial Services (EFSC), NETSTREIT (NTST), Getty Realty (GTY), Live Oak Bancshares (LOB), Stewart Information Services (STC), Pathward Financial (CASH), Triumph Financial (TFIN), Healthcare Services Group (HCSG), Ategrity Specialty Insurance Company Holdings (ASIC), Old Second Bancorp (OSBC), Integra LifeSciences Holdings (IART), Horizon Bancorp (HBNC).
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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