Equities expected to rebound on upbeat US tech earnings

General market commentary

Equity markets retreated from record highs, led by weakness in the technology-heavy Nasdaq as growth sectors including consumer discretionary, communication services and technology declined, while value-oriented and cyclical equities outperformed. The Nasdaq Composite fell 1.6 percent to 23,581.14, the S&P 500 slipped 1 percent to 6,822.34, and the Dow Jones Industrial Average edged 0.2 percent lower to 47,522.12. Real estate and financials were the strongest performers on the day. Among major movers, Meta shares dropped more than 10 percent following disappointing guidance and higher-than-expected spending plans, while Alphabet rose 2.5 percent after strong quarterly results. Microsoft shares also fell nearly 3 percent after its earnings release, while investors awaited reports from Apple and Amazon later in the day.

The overall tone was risk-off, with higher Treasury yields adding pressure after the Federal Reserve signalled caution on further rate cuts this year. The Fed reduced rates by 25 basis points to a target range of 3.75 to 4.00 percent but Chair Jerome Powell stressed that another cut in December was not guaranteed, prompting investors to scale back expectations for additional easing. The 10-year Treasury yield rose to 4.09 percent as markets adjusted to the Fed’s more measured stance. Meanwhile, trade developments offered a modest positive backdrop, as the United States and China agreed to lower certain tariffs and pause restrictions, signalling a temporary easing of tensions between the two countries.

Latest market and economic update

Asian markets showed mixed performance on Friday, with Japan’s Nikkei and South Korea’s KOSPI extending record rallies on tech and AI-related gains, while Chinese shares fell amid weak manufacturing data. Tokyo’s core CPI rose 2.8%, highlighting inflationary pressures, and factory output and retail sales signalled fragile domestic demand.

US equity futures rose sharply overnight as strong after-hours results from Apple and Amazon lifted sentiment following a weak regular session. S&P 500 futures gained 0.7 percent, Nasdaq 100 futures jumped 1.3 percent and Dow futures edged 0.1 percent higher, buoyed by upbeat earnings that helped offset concerns over rising AI-related spending among major technology firms.

European equities were mixed yesterday as investors weighed corporate earnings, ECB rate decisions, and easing U.S.-China trade tensions. Germany’s DAX rose 0.1%, France’s CAC 40 fell 0.5%, and the U.K.’s FTSE 100 was flat. Shell posted a third-quarter profit rebound, while Volkswagen, Societe Generale, Stellantis, Puma, and Carlsberg reported mixed results.

The US dollar held steady early Friday morning after reaching a three-month high, supported by risk aversion and mixed central bank signals. Against the euro, the dollar was 0.1% weaker at $1.1572 following the ECB’s decision to keep rates unchanged, while it remained largely flat versus the yen, yuan, Australian and New Zealand dollars.

Oil prices fell in Asian trade today, pressured by a stronger dollar, weak Chinese manufacturing data and lingering oversupply concerns. Brent slipped 0.4 percent to 64.74 dollars a barrel and WTI lost 0.5 percent to 60.28 dollars. Both benchmarks were set for a third consecutive monthly decline ahead of Sunday’s expected OPEC+ output hike.

China’s manufacturing activity contracted more than expected in October, with the official PMI falling to 49.0 from 49.8, marking a seventh consecutive month of decline. Weak domestic demand and high US tariffs weighed on sentiment, while the composite PMI slipped to 50.0. Analysts said the downturn highlights the need for further policy support from Beijing.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Amazon’s cloud revenue surged 20% in Q3, the fastest growth in nearly three years, boosting after-hours shares 13.1% and driving fourth-quarter sales forecasts above expectations. Strong demand for AI and cloud services offset softer e-commerce growth. Advertising also rose 24%, while the company implemented workforce cuts and booked a $25 billion FTC settlement charge.

Apple projected stronger-than-expected iPhone and overall revenue growth for the holiday quarter, driven by high demand for iPhone 17 models despite supply constraints and delays in China. Fourth-quarter sales and profit slightly exceeded estimates, supported by strong performance in services, Mac, iPad and accessories, with tariff-related costs in line with forecasts.

Netflix is exploring a bid for Warner Bros Discovery’s studio and streaming business, engaging Moelis & Co to assess a potential offer, while excluding legacy media assets like CNN and TNT. The company also announced a ten-for-one share split to make shares more accessible, with trading from November 17, following a three-year 360% rise, far outpacing Disney and Comcast.

Moderna shares jumped up to 14% Thursday after reports the COVID-19 vaccine maker is in talks with at least one large pharmaceutical firm over a potential deal, possibly a partnership or acquisition. The company aims to diversify beyond its pandemic-driven vaccine business, while analysts suggest a partnership, rather than a full takeover, is more likely.

Novo Nordisk made an unsolicited $8 billion bid to acquire U.S. obesity drug developer Metsera, offering $56.50 per share plus contingent value rights, surpassing Pfizer’s $4.9 billion offer. BMO Capital called it “over-the-top,” highlighting intense competition in obesity M&A. Pfizer condemned the bid as “reckless” and anti-competitive.

Eli Lilly’s weight-loss pill, orforglipron, qualifies for the FDA’s priority voucher, potentially fast-tracking approval. Strong international demand for GLP-1 drugs Zepbound and Mounjaro drove Q3 revenue and profit past expectations, with sales of $3.6 billion and $6.5 billion respectively. Lilly raised full-year earnings and revenue forecasts amid robust global growth.

Mastercard beat Q3 profit expectations, reporting $3.96 billion, supported by resilient consumer spending and growth in agentic commerce and stablecoins. Net revenue rose 17% to $8.6 billion, with cross-border volume up 15%. CEO Michael Miebach highlighted the payments sector’s transformation as digital currencies and AI-driven agents increasingly shape transactions.

S&P Global raised its annual earnings forecasts as robust bond issuance boosted its ratings business, with third-quarter revenue up 12% to $1.24 billion. Annual revenue growth is now expected at 7–8%, and adjusted EPS at $17.60–$17.85. The company is also streamlining operations, divesting mobility, Enterprise Data Management, and thinkFolio units.

Schneider Electric’s Q3 organic revenue rose 9% to €9.72 billion, exceeding estimates, driven by strong AI data centre demand. The French industrial group plans over $700 million U.S. investment through 2027 and has boosted prices to offset tariffs. Data centres now account for over 24% of revenue, supporting continued growth into 2026.

Bristol Myers Squibb beat third-quarter revenue estimates, with strong sales of cancer immunotherapy Opdivo and blood thinner Eliquis offsetting losses from older drugs facing generic competition. Revenue rose to $12.22 billion, and adjusted earnings reached $1.63 per share. The company raised its full-year forecast, citing growth from new drugs and ongoing acquisitions.

Reddit forecast fourth-quarter revenue above estimates, driven by its AI-powered ad platform, which grew its active advertiser base over 75% in Q3. Third-quarter revenue rose 68% to $585 million, beating expectations. The company expects Q4 revenue of $655–$665 million and adjusted EBITDA of $275–$285 million, reflecting strong growth despite slowing US user gains.

Coinbase beat Q3 profit estimates, reporting net income of $432.6 million on $1.05 billion in transaction revenue, driven by crypto volatility. Subscription and services revenue rose 34% to $746.7 million, supported by stablecoin adoption. The company also completed its Deribit acquisition, strengthening its position in the derivatives market and broader crypto ecosystem.

Shell and TotalEnergies reported Q3 profit declines of 10% and 2% respectively, pressured by lower oil prices. Shell’s adjusted earnings of $5.4 billion beat expectations, aided by gas and upstream divisions, while Total’s $4.0 billion profit was supported by higher upstream production and refining margins. Shell maintained buybacks; TotalEnergies scaled back to manage debt.

Stellantis shares dropped up to 11% after the automaker flagged one-off charges from strategic, product, and regulatory changes amid a chip shortage. Despite a 13% rise in third-quarter revenue and reaffirmed forecasts for higher revenue and improved cash flow, analysts called guidance vague. CEO Filosa is focusing on stabilising U.S. operations.

Lufthansa reported third-quarter operating profit of €1.33 billion, slightly above expectations, despite weak North Atlantic bookings. The airline expects North American traffic to recover in Q4 and 2026, supported by strong Latin American and premium demand. Delivery delays, particularly Boeing 777X, hamper fleet renewal, but long-haul deliveries in 2026 should aid growth.

Vale reported a 78 percent jump in third-quarter net profit to 2.7 billion dollars, driven by higher iron ore and copper output, improved prices and lower costs. Revenue rose 9 percent to 10.4 billion dollars, while adjusted EBITDA increased 17 percent. The miner also cut cost guidance for copper and nickel and reduced capital spending.

UniCredit has received ECB approval to acquire up to a 29.9% direct stake in Alpha Bank, increasing its total exposure to around 29.5% through additional financial instruments. The Italian lender completed the stake acquisition at a discount and implemented a hedge, with full conversion expected to reduce its CET1 ratio by roughly 80 basis points.

Meta Platforms is raising up to $30 billion in its largest bond offering, alongside a $27 billion private deal with Blue Owl Capital, to fund AI infrastructure and hiring amid soaring costs. Meanwhile, Oppenheimer downgraded the shares, citing aggressive AI spending and uncertain 2027 earnings, warning high costs may offset growth despite strong Q3 advertising revenue.

Morgan Stanley reaffirmed Microsoft as its “Top Pick,” raising its price target to $650 after a strong FY26 start. Commercial bookings rose 111%, Azure revenue grew 39%, and operating margins expanded. The bank expects continued AI-driven demand, persistent supply constraints, and further margin gains, advising buying on any pullbacks.

Deutsche Bank downgraded Boeing to Hold, citing weaker free cash flow, higher capital spending, and delayed 777X production. While 737 and 787 programmes improve and Boeing remains competitive, limited upside is expected as valuations largely reflect recovery, with investors possibly favouring suppliers with stronger near-term earnings.

Upcoming data and events

Today’s economic calendar includes inflation data from France, Italy, and the Eurozone, U.S. September personal spending, Core PCE figures, and the Chicago PMI. Fed speeches by Bostic and Hammack, plus Baker Hughes’ rig counts, are also scheduled. Major earnings before the open come from Exxon Mobil, Chevron, AbbVie, Linde, and Colgate-Palmolive.

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