December Nasdaq 100 E-Mini futures (NQZ26) are up +0.38% this morning, pointing to a modest rebound after the index entered a technical correction, as dip buyers snapped up chipmakers and other AI-related stocks.
Chip and AI infrastructure stocks climbed in pre-market trading, rebounding from yesterday’s slump. Sandisk (SNDK), Micron Technology (MU), and Intel (INTC) each gained +3% or more. However, gains in Nasdaq 100 futures were limited by rising bond yields and a post-earnings decline in Apple. Shares of the iPhone maker slid over -3% in pre-market trading after the company forecast a narrower gross margin for the December quarter, overshadowing an upbeat sales outlook.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Meanwhile, December S&P 500 E-Mini futures (ESZ26) were little changed as traders turned cautious ahead of the U.S. midterm elections.
Adding to the cautious mood, WTI crude prices rose more than +1% on Tuesday, recovering some of the previous session’s steep losses. The advance followed a report from The Wall Street Journal that the U.S. struck Iran’s Qeshm Island in the Strait of Hormuz on Monday. Separately, Reuters reported that major hurdles to ending the war remained despite signals from both Washington and Tehran that they were open to a diplomatic resolution.
In yesterday’s trading session, Wall Street’s main stock indexes ended mostly lower as a selloff in chipmakers offset a slump in oil prices. Chip and AI infrastructure stocks slumped, with Intel (INTC) falling over -8% and Seagate Technology Holdings (STX) dropping more than -7%. Also, Lumentum Holdings (LITE) cratered over -18% and was the top percentage loser in the S&P 500 and Nasdaq 100 after Marvell Technology agreed to acquire the optical components maker for about $115 billion, including debt, in an all-stock deal. In addition, Oracle (ORCL) plunged more than -8% after the company outlined the details of a previously announced plan to raise $20 billion to help finance its AI infrastructure expansion. On the bullish side, IDEXX Laboratories (IDXX) jumped over +21% and was the top percentage gainer in the S&P 500 and Nasdaq 100 after the pet healthcare company posted better-than-expected Q3 results and raised its full-year guidance.
Economic data released on Monday were mixed for equities. The U.S. ISM manufacturing index rose to 55.5 in October, stronger than expectations of 54.5. At the same time, U.S. September construction spending unexpectedly fell -1.9% m/m, weaker than expectations of +0.4% m/m. In addition, the U.S. October S&P Global manufacturing PMI was revised downward to 54.9, weaker than expectations of no change at 56.0.
Today, all eyes are on the U.S. midterm elections, with American voters heading to the polls to elect the entire House of Representatives and roughly a third of the Senate. Republicans currently hold narrow majorities in both chambers of Congress. Democrats are widely expected to win control of the House, while the party also has a chance of taking the Senate. Investors will closely watch the results, as a shift in congressional control could have implications for fiscal policy, regulation, and sectors such as AI, crypto, and financial services.
“Our view is to watch for the outlier outcomes. While a blue sweep seems priced in, there is still some chance of GOP holding the Senate alongside some probability of greater-than-expected Senate gains for Democrats,” according to Scott Chronert at Citigroup. “The former could trigger a shorter-term rally while the latter increases post-election overhang risk."
Meanwhile, the S&P 500 has historically tended to rally following midterm elections, regardless of its performance in the run-up to the vote, according to a Bloomberg analysis. Semiconductors have been the best-performing group in the S&P 100 in the 12 months following midterms since 1982, according to Morgan Stanley data.
Third-quarter corporate earnings season rolls on, with investors awaiting reports from prominent companies today, including Advanced Micro Devices (AMD), Arista Networks (ANET), Shopify (SHOP), Pfizer (PFE), and Booking Holdings (BKNG). AMD’s results, due after the closing bell, will draw particular attention. Investors will focus primarily on growth in the company’s data center business, the rollout of its next-generation MI450 accelerators, and management’s guidance for Q4. According to Bloomberg Intelligence, S&P 500 companies are expected to post an average +31% jump in third-quarter earnings from a year earlier.
On the economic front, investors will keep a close eye on U.S. JOLTS job openings data, set to be released in a couple of hours. Economists forecast that September JOLTS job openings will come in at 7.150 million, compared with 7.079 million in August.
U.S. factory orders data will also be released today. Economists project September factory orders to rise +1.2% m/m, following a +0.1% m/m gain in August.
U.S. rate futures are currently pricing in a 74.9% probability of a 25-basis-point rate hike and a 25.1% probability of no rate change at the next FOMC meeting in December.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.92%, up +0.29%.
The Euro Stoxx 50 Index is down -0.47% this morning, catching up with yesterday’s losses on Wall Street that occurred after European markets closed. Sentiment was also dampened by the rebound in oil prices. Mining stocks led the declines on Tuesday, tracking a slump in metal prices. Technology and bank stocks also slid. Limiting losses, healthcare stocks advanced, with Bayer (BAYN.D.DX) rising over +5% after the German group raised its full-year EBITDA guidance. Data released on Tuesday showed that Switzerland’s annual inflation rate accelerated in October to its highest level in nearly three years, driven by a continued rise in imported energy prices. Meanwhile, Eurozone government bond yields rose on Tuesday as higher oil prices stoked inflation concerns, while investors turned their attention to the U.S. midterms. In other corporate news, TeamViewer (TMV.D.DX) tumbled over -25% after the software company cut its full-year revenue growth guidance. At the same time, Philips (PHIA.NA) climbed more than +4% after the health-technology company posted stronger profitability in Q3.
Switzerland’s CPI was released today.
Switzerland’s October CPI rose +0.2% m/m and +1.5% y/y, stronger than expectations of no change m/m and +1.3% y/y.
China’s Shanghai Composite Index ($CHSC) closed down -0.82%, while Japan’s financial markets were closed for a public holiday.
China’s Shanghai Composite Index closed lower today as investors reacted skeptically to the authorities’ latest support measures. Policymakers revived tools introduced during the 2024 market rescue, albeit with some adjustments, to bolster market stability. The People’s Bank of China said in a statement on Monday that it will conduct operations under a swap facility that allows securities firms, funds, and insurers to exchange assets for more liquid ones that can be used to purchase shares. Separately, the PBOC will cut the rate on its relending facility from 1.25% to 1%, establish the program as a permanent measure, and encourage banks to expand lending. Turnover in exchange-traded funds favored by the so-called national team of state-backed investors also jumped to 120 billion yuan ($18 billion) on Tuesday, the highest since late January, fueling speculation about official market intervention. However, the measures failed to impress investors, reflecting skepticism that they could overcome weak economic growth and uncertainty surrounding corporate earnings. Technology stocks resumed their slide on Tuesday, wiping out gains from the previous session. Elsewhere, the yuan snapped its longest winning streak in three decades after the PBOC took steps to temper its rally by requiring banks to hold more foreign currencies in reserve. The central bank said on Tuesday that it would raise the foreign exchange reserve requirement ratio by 2 percentage points to 6% from 4%, effective Nov. 15.
Japan’s Nikkei 225 Stock Index was closed today for the Culture Day holiday. Japanese financial markets will reopen on Wednesday.
Pre-Market U.S. Stock Movers
Chip and AI infrastructure stocks climbed in pre-market trading, rebounding from yesterday’s slump. Sandisk (SNDK), Micron Technology (MU), and Intel (INTC) each gained +3% or more.
Apple (AAPL) slid over -3% in pre-market trading after the iPhone maker forecast a narrower gross margin for the December quarter, overshadowing an upbeat sales outlook.
Palantir Technologies (PLTR) slumped more than -8% in pre-market trading after the data analytics company’s Q4 revenue guidance pointed to a slowdown in sequential growth.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - November 3rd
Advanced Micro Devices (AMD), Amgen (AMGN), Arista Networks (ANET), Shopify (SHOP), Pfizer (PFE), Eaton Corporation (ETN), Marathon Petroleum (MPC), Booking Holdings (BKNG), Suncor Energy (SU), Ferrari (RACE), Apollo Global Management (APO), Energy Transfer LP (ET), MPLX LP (MPLX), AMETEK (AME), Thomson Reuters (TRI), Keurig Dr Pepper (KDP), Block (XYZ), Waters (WAT), American International Group (AIG), Yum! Brands (YUM), Astera Labs (ALAB), Prudential Financial (PRU), Sysco (SYY), Archer-Daniels-Midland Company (ADM), Fortis (FTS), Fiserv (FISV), Coupang (CPNG), Expeditors International of Washington (EXPD), International Flavors & Fragrances (IFF), Super Micro Computer (SMCI), Broadridge Financial Solutions (BR), Toast (TOST), DuPont de Nemours (DD), Ovintiv (OVV), Leidos Holdings (LDOS), Ball Corporation (BALL), Zebra Technologies (ZBRA), Revvity (RVTY), Dynatrace (DT), Talen Energy (TLN), Yum China Holdings (YUMC), UL Solutions (ULS), Omega Healthcare Investors (OHI), Gartner (IT), Assurant (AIZ), Unum Group (UNM), Skyworks Solutions (SWKS), American Financial Group (AFG), Pinnacle West Capital (PNW), Essential Utilities (WTRG), Jack Henry & Associates (JKHY), Regal Rexnord (RRX), DigitalOcean Holdings (DOCN), Madrigal Pharmaceuticals (MDGL), Procore Technologies (PCOR), Henry Schein (HSIC), Sunoco LP (SUN), Enlight Renewable Energy (ENLT), Jackson Financial (JXN), Hecla Mining Company (HL), Aptiv (APTV), SM Energy Company (SM), Corcept Therapeutics (CORT), Alkermes (ALKS), PACS Group (PACS), ADT Inc. (ADT), Amneal Pharmaceuticals (AMRX), Matador Resources Company (MTDR), Amdocs (DOX), Modine Manufacturing Company (MOD), Rhythm Pharmaceuticals (RYTM), Duolingo (DUOL), PJT Partners (PJT), The Mosaic Company (MOS), Triple Flag Precious Metals (TFPM), GXO Logistics (GXO), CVR Energy (CVI), Mercury General (MCY), Enpro (NPO), Varonis Systems (VRNS), Super Group (SGHC) (SGHC), SSR Mining (SSRM), Fortune Brands Innovations (FBIN), Xometry (XMTR), Mirum Pharmaceuticals (MIRM), Stevanato Group (STVN), Hagerty (HGTY), Everus Construction Group (ECG), Louisiana-Pacific (LPX), Sotera Health Company (SHC), Red Rock Resorts (RRR), Hamilton Lane (HLNE), BETA Technologies (BETA), Champion Homes (SKY), Greif (GEF), Riot Platforms (RIOT), Versant Media Group (VSNT), Cinemark Holdings (CNK), Greif (GEF.B), Primoris Services (PRIM), TransAlta (TAC), Avis Budget Group (CAR), Sportradar Group AG (SRAD), Freshworks (FRSH), Icahn Enterprises (IEP), Par Pacific Holdings (PARR), USA Compression Partners (USAC), HNI Corporation (HNI), SunocoCorp LLC (SUNC), Ashland (ASH), Knife River (KNF), Kadant (KAI), Tarsus Pharmaceuticals (TARS), IPG Photonics (IPGP), Seadrill (SDRL), AtriCure (ATRC), Denali Therapeutics (DNLI), The Marzetti Company (MZTI), DiamondRock Hospitality Company (DRH), Huron Consulting Group (HURN), Talos Energy (TALO), Liberty Global (LBTYK), Liberty Global (LBTYA), Graphic Packaging Holding Company (GPK), Liberty Global (LBTYB), EagleRock Land, LLC (EROK), Lindblad Expeditions Holdings (LIND), Innospec (IOSP), LTC Properties (LTC), Flywire (FLYW), Addus HomeCare (ADUS), UFP Technologies (UFPT), Navitas Semiconductor (NVTS), The Andersons (ANDE), Ouster (OUST), Douglas Emmett (DEI), Upstart Holdings (UPST), Xenia Hotels & Resorts (XHR), Alamar Biosciences (ALMR), EVERTEC (EVTC), Marqeta (MQ), Denison Mines (DNN), Horace Mann Educators (HMN), Expro (XPRO), Sixth Street Specialty Lending (TSLX), Global Industrial Company (GIC), Revolve Group (RVLV), Ultragenyx Pharmaceutical (RARE), Neutron Holdings (LIME), Patria Investments (PAX).
On the date of publication, Oleksandr Pylypenko did not directly have a position 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.