Equities rebound on strong data and earnings

General market commentary

US equity markets closed higher on Wednesday following stronger-than-expected economic data, as investors reacted positively to signs of resilience in the labour market and services sector. The October ADP employment report showed that private payrolls rose by 42,000, exceeding expectations for a 35,000 increase and ending a two-month streak of declines. Meanwhile, the ISM Services PMI climbed to an eight-month high of 52.4, supported by gains in new orders, employment, and business activity, suggesting healthy demand in the services sector. However, the rise in the prices sub-index to its highest level since October 2022 fuelled renewed concerns about inflation and pushed bond yields higher. Major US equity indices advanced, with the Nasdaq Composite up 0.7 percent, the S&P 500 rising 0.4 percent, and the Dow Jones Industrial Average gaining 0.5 percent, as investors viewed the previous session’s sell-off as profit-taking rather than a fundamental shift in market sentiment.

Investor confidence was further supported by the historically favourable seasonal pattern for equities as the year-end approaches. The S&P 500 has risen roughly 15 percent so far in 2025, reflecting continued momentum despite a volatile spring period. Historically, November and December have delivered positive returns for equities, averaging gains of 1.9 percent and 1.4 percent respectively. Sector-wise, communication services and consumer discretionary shares led Wednesday’s rebound, while major technology and pharmaceutical firms such as Alphabet and Amgen posted strong gains. Market sentiment improved as volatility eased, with the CBOE Volatility Index falling 5.2 percent to 18.01. Nevertheless, rising bond yields and reduced expectations for further interest rate cuts highlighted lingering inflation risks, suggesting that while the outlook for US equities remains constructive, investors continue to balance optimism with caution.

Latest market and economic update

Asian equity markets rebounded on Thursday, led by Japan and China, as easing concerns over tech valuations spurred buying. The Nikkei 225 rose 1.5% and the CSI 300 gained 1.4%, supported by strength in technology and consumer shares. Hong Kong’s Hang Seng climbed 1.6%, while semiconductor and AI-related shares also advanced.

U.S. equity futures were largely unchanged overnight with S&P 500 futures steady at 6,823.75 and Nasdaq 100 futures down 0.1% at 25,717.75, while Dow Jones futures held near 47,445. In after-hours trading, Snap surged 15%, Arm Holdings jumped 4%, and Lyft climbed 3.5% following stronger-than-expected earnings and revenue results.

European shares recovered to close higher on Wednesday, with the STOXX 600 up 0.2% after early tech-driven losses. Healthcare lagged as Novo Nordisk fell 4.5% and Ambu dropped 15.8%, while autos and energy gained. BMW and Vestas led sectoral rallies. Strong earnings and eurozone growth supported markets amid ongoing AI and valuation concerns.

The US dollar remained near a three-month high on Thursday, supported by strong private-sector economic data and reduced expectations of a December rate cut. Against the euro, the dollar held firm, with the EUR/USD exchange rate at around 1.1508, reflecting cautious sentiment amid ongoing uncertainty from the prolonged US government shutdown.

Oil prices steadied in Asian trade, with Brent at $63.54 and WTI at $59.44, after recent losses driven by supply glut fears and weak demand. U.S. fuel demand is pressured by a prolonged government shutdown, while OPEC+ production increases and strong U.S. output heighten oversupply concerns, compounded by a stronger dollar and limited rate cut expectations.

Equities on the 0move

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

SoftBank Group reportedly explored acquiring US chipmaker Marvell Technology earlier this year, with plans to merge it with Arm Holdings, according to Bloomberg. Although talks did not result in a deal, the move aligned with SoftBank’s ambitions to expand in artificial intelligence. Marvell designs AI and data centre chips, including exclusive products for Amazon.

Apple plans to use Google’s 1.2 trillion-parameter Gemini AI model to revamp its Siri voice assistant, paying about $1 billion annually for access. The model will serve as a temporary solution until Apple’s own systems are ready, addressing Siri’s limitations compared with Alexa and Google Assistant, while the partnership excludes Google AI search integration.

Pfizer is preparing to sweeten its bid for Metsera after a judge denied its attempt to block Novo Nordisk’s $10 billion offer. The takeover battle, driven by the growing obesity drug market, has faced regulatory scrutiny, with the FTC warning Novo’s deal may breach antitrust law. Pfizer raised its offer to $70 per share on Wednesday.

Nvidia CEO Jensen Huang warned that China could surpass the US in the artificial intelligence race, citing China’s developer base and restrictions on Nvidia’s market access. While advocating for America to lead globally, he stressed the need to engage Chinese developers. Advanced Nvidia AI chips remain restricted, with the US limiting exports of its most sophisticated semiconductors.

OpenAI CFO Sarah Friar dismissed concerns of an AI bubble, arguing the market underestimates the technology’s practical potential. Speaking at WSJ’s Tech Live, she defended OpenAI’s $1.4 trillion infrastructure investments and financing deals with Nvidia and AMD, rejecting claims of circularity. Friar also confirmed that an IPO is not planned in the near term.

Netflix is reportedly in talks to license Sirius XM’s video podcasts, potentially on an exclusive basis to block YouTube, as part of its broader expansion into podcasting. Discussions are ongoing with no agreement finalised. The streaming giant has also approached other media companies and talent agencies to bring more video podcasters onto its platform.

Apple plans to use Google’s 1.2 trillion-parameter Gemini AI model to revamp its Siri voice assistant, paying about $1 billion annually for access. The model will serve as a temporary solution until Apple’s own systems are ready, addressing Siri’s limitations compared with Alexa and Google Assistant, while the partnership excludes Google AI search integration.

Robinhood Markets beat third-quarter profit estimates with $556 million, driven by strong retail trading in equities, options, and crypto. Transaction revenue more than doubled year-on-year. CFO Jason Warnick will retire in 2026, with Shiv Verma set to expand the company’s prediction markets and sustain long-term growth momentum.

Qualcomm forecast quarterly sales and profit above expectations, driven by stronger premium smartphone demand, though potential reduced business from Samsung weighed on after-hours shares. The company is expanding into laptops, automobiles, and AI data centre chips, with Apple, Samsung, and Xiaomi remaining key revenue contributors.

Arm Holdings forecast fiscal third-quarter revenue above Wall Street expectations, driven by strong AI demand and adoption of its Compute Subsystems products. Second-quarter revenue rose 34% to $1.14 billion, with licensing and royalty income up sharply. The UK chip designer is expanding into data centers and plans to develop its own full chips alongside existing IP licensing.

Snap beat third-quarter revenue estimates, reporting $1.51 billion and narrowing its net loss to $104 million. Daily active users rose 8% to 477 million. The company partnered with Perplexity AI, receiving $400 million over a year, to integrate AI search into Snapchat. Fourth-quarter revenue is forecast at $1.68–$1.71 billion, though regulatory changes may affect users.

Lyft expects growth from its expansion into smaller US cities and European operations, projecting over six million new riders in 2026. The company forecast fourth-quarter gross bookings above estimates and reported record third-quarter revenue of $1.69 billion. Premium rides and a partnership with United Airlines are boosting high-margin business.

DoorDash reported third-quarter earnings of 55 cents per share, missing estimates of 69 cents, as rising costs weighed on profits. Revenue and gross merchandise value exceeded expectations, supported by partnerships with Domino’s, Kroger, and robotics firm Serve. The company plans to invest several hundred million dollars more in 2026 to expand its delivery services.

Elf Beauty forecast fiscal 2026 sales and profit below Wall Street estimates, citing higher tariff costs and cautious consumer spending. Full-year net sales are expected at $1.55–$1.57 billion, with adjusted profit of $2.80–$2.85 per share. Second-quarter sales also missed expectations, and gross margins declined despite recent price increases and supply chain adjustments.

Novo Nordisk trimmed its full-year forecasts as sales growth for Wegovy slows amid competition from Eli Lilly and copycat GLP-1 drugs. The company faces pricing pressures, insurance constraints, and patent expiries, though a Medicare pricing deal eased some concerns. CEO Mike Doustdar is driving a turnaround, including a $10 billion bid for biotech Metsera.

McDonald’s exceeded third-quarter global comparable sales estimates, with same-store sales up 3.6% and US growth at 2.4%, supported by affordable meal deals and promotions. International markets, led by Japan, Germany, and Australia, also strengthened. Quarterly adjusted profit was $3.22 per share, slightly below analysts’ expectations.

Italy’s Leonardo expects to exceed full-year financial targets after strong first nine months in 2025, with double-digit growth in orders, revenue, and core profit. Growth was driven by defence contracts, electronics, helicopters, and space businesses. The company reduced its stake in rocket maker Avio while maintaining investments in missile and drone partnerships.

Morgan Stanley projects Google Cloud could grow over 50% in 2026, driven by backlog and on-demand workloads. With ~$158bn in backlog, around 55% expected as revenue in two years, and on-demand growth of 25% YTD in 2025, the unit is seen as a key driver of Alphabet’s AI-led outperformance and potential multiple expansion.

Morgan Stanley raised EssilorLuxottica’s price target to €365, keeping an Overweight rating and naming it a top pick, citing strong growth from its Meta smart-glasses partnership. Wearables are expected to drive double-digit revenue, with unit sales rising to 25 million by 2028, supporting EBIT growth, broader eyewear sales, and long-term margin expansion.

Upcoming data and events

Today’s agenda includes earnings from Airbnb, Monster Beverage, Take-Two Interactive, Expedia, and Wynn Resorts, covering travel, hospitality, gaming, and beverages. Investors will also watch US JOLTs Job Openings and Initial Jobless Claims for insights into the labour market and potential Federal Reserve policy signals.

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