Shares gain on Trump-Xi meeting next week

General market commentary

Equity markets advanced on Thursday as investors looked ahead to the release of September’s CPI inflation data, the first major government report since the four-week shutdown began. Gains were supported by optimism around corporate earnings and confirmation of a meeting between US President Donald Trump and China’s President Xi Jinping at the end of the month, aimed at easing trade tensions. The Nasdaq Composite rose 0.9%, the S&P 500 gained 0.6%, and the Dow Jones Industrial Average climbed 0.3%. Energy and industrial equities led the advance, while consumer staples lagged. Defensive sectors such as health care and utilities have continued to outperform during the shutdown, in contrast to financials, which remain under pressure due to credit concerns among regional banks.

Earnings season got off to a broadly positive start, with most S&P 500 companies reporting stronger-than-expected results. Notable gainers included Honeywell International, Las Vegas Sands, and Lam Research, all of which posted upbeat quarterly performances. Tesla shares rebounded despite missing earnings expectations, supported by record deliveries. Analysts forecast overall S&P 500 earnings growth of around 8.7% year-on-year, with technology, financials, and utilities expected to lead gains. The improved earnings outlook and broad-based sector participation have bolstered investor sentiment, suggesting potential for more balanced market performance ahead.

Latest market and economic update

Asian equities advanced on Friday, led by technology shares, after confirmation that US President Donald Trump will meet China’s Xi Jinping next week eased trade tensions. South Korea’s KOSPI hit a record high, while Chinese and Hong Kong markets gained on optimism over Beijing’s new economic plan. Japan’s Nikkei also rose despite mixed economic data.

US equity futures were little changed overnight after Wall Street ended higher, supported by upbeat corporate earnings. Intel led gains, surging over 7% in after-hours trading on strong quarterly results, while Honeywell and American Airlines also advanced. Investors remained cautious ahead of delayed US inflation data and the upcoming Federal Reserve meeting.

European equities rose on Thursday, supported by gains in the energy sector following US sanctions on Russian oil giants Lukoil and Rosneft. Key movers included Unilever, boosted by strong beauty product sales, Nokia, Thales, and Dassault Systemes with positive earnings, while Lloyds, and STMicroelectronics faced setbacks.

The US dollar remained steady on Friday, set for a modest weekly gain against major currencies as investors awaited September’s CPI data, expected to support the Federal Reserve’s planned rate cut. The euro was little changed at $1.16195, on course for a 0.3% weekly decline, while the dollar index rose 0.37% for the week.

Oil prices dipped in Asian trade this morning after Thursday’s sharp rally but remained set for a strong weekly gain. Fresh US and EU sanctions on Russia’s major oil producers, Rosneft and Lukoil, spurred supply concerns and boosted prices earlier in the week. Investors also focused on upcoming US inflation data and renewed US-China trade talks.

Equities on the move

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

Intel exceeded September-quarter profit expectations, driven by CEO Tan’s cost-cutting and investments from Nvidia, SoftBank, and the US government. Strong CPU demand, especially from data centres upgrading for AI, lifted adjusted gross margins to 40%. Q4 revenue is forecast at $12.8–$13.8 billion amid supply constraints and continued capital investment.

Newmont beat Q3 profit estimates as record gold prices offset weaker production, but warned that Q4 free cash flow will be hit by higher spending on water treatment facilities and severance costs. Shares fell 5.3% after the results. Gold output declined 15% to 1.42 million ounces, while all-in sustaining costs eased slightly to $1,566 per ounce.

American Airlines raised its 2025 profit forecast after capacity cuts and stronger domestic demand restored pricing power. Q3 adjusted losses of 17 cents per share beat expectations, while total revenue rose to $13.69 billion. Premium services continue to outperform the main cabin, with the airline planning to expand high-margin seating and enhance airport facilities.

Ford cut its profit guidance after a September fire at Novelis disrupted aluminium supply for F-150 trucks, costing up to $2 billion. Third-quarter revenue rose 9% to $50.5 billion, with earnings per share beating expectations. Gasoline-fuelled trucks remain core profit drivers, while EV production faces losses and delays, partially offset by tariff relief and alternative sourcing.

Freeport-McMoRan posted a stronger-than-expected Q3 profit, boosted by higher copper prices despite lower production from its Grasberg mine, suspended after a deadly mudflow killed seven workers. Adjusted profit was 50 cents per share versus the 41-cent estimate. Copper production fell 13%, gold 37%, with a phased restart at Grasberg expected by mid-2026.

Super Micro Computer cut its first-quarter revenue forecast to $5 billion, down from $6–7 billion, due to delays in AI-related deliveries, causing shares to fall around 9%. The company maintained its full-year 2026 revenue target of at least $33 billion, citing strong AI demand, and has secured over $12 billion in business for the second quarter.

Uber shares rose 2.6% after Nvidia detailed their collaboration on autonomous vehicle development. The partnership uses Uber’s real-world driving data to train Nvidia’s Cosmos World Foundation Models, aiming to improve realism, safety and performance in self-driving systems. Investors welcomed the initiative as a strategic move to bolster Uber’s position in transport.

MercadoLibre will sell rival Casas Bahia’s products on its platform from November under a long-term partnership. The collaboration aims to boost MercadoLibre’s share in electronics and home appliances while supporting Casas Bahia’s sales during its restructuring. Shares in Casas Bahia rose, as the deal heightens competition in Brazil’s e-commerce sector.

T-Mobile added over 1 million postpaid wireless subscribers in Q3, surpassing estimates, boosted by iPhone upgrades and its T-Satellite plan. The carrier raised its 2025 net-add forecast to 7.2–7.4 million and reported $21.96 billion in revenue. Strong network perception and premium plans drove growth, though shares dipped after a $500 million capital expenditure increase.

STMicroelectronics shares fell over 14% after reporting Q3 revenue of $3.19 billion, EPS of $0.26 and free cash flow of $130 million. Gross and operating margins missed estimates. The chipmaker issued a cautious Q4 outlook, forecasting 3% revenue growth and 35% gross margin, while lowering 2025 capital expenditure guidance to under $2 billion.

Lloyds Banking Group’s third-quarter profit fell 36% to £1.17 billion, as an £800 million motor finance scandal charge prompted a downgrade in annual guidance to a 12% return on tangible equity. Strong net interest income, structural hedges, and £3.7 billion inflows into wealth management partly offset the impact, while the bank plans to buy Schroders’ UK wealth stake.

French defence and aerospace group Thales reported a 9% rise in sales to €15.26 billion for the first nine months of 2025, driven by strong defence and aerospace demand. Orders grew 8% to €16.76 billion. Thales reaffirmed full-year guidance, projecting 6–7% organic sales growth, a 12.2–12.4% adjusted EBIT margin, and a book-to-bill ratio above one.

Applied Materials plans to cut 4% of its global workforce, over 1,400 jobs, in response to a sales slowdown and US export restrictions to China, which could cost $600 million in fiscal 2026 revenue. CEO Gary Dickerson said the restructuring aims to create a more competitive, productive organisation poised for long-term growth in the semiconductor industry.

A London tribunal ruled that Apple abused its dominant position from 2015 to 2020 by charging unfair commissions to app developers, potentially exposing the company to billions in damages. The case, brought under the UK’s class-action regime, found developers passed on overcharges to consumers. Apple plans to appeal, calling the ruling flawed.

Nike unveiled Project Amplify, a motorised running shoe in collaboration with Dephy, aimed at boosting mobility for casual athletes and the mobility-impaired, still years from market. CEO Elliott Hill is prioritising innovation to regain market share, alongside Mind 001/002 shoes for mental focus and the Aero-FIT cooling jersey, set for release in January and next year’s World Cup.

The Trump administration clarified it is not necessarily taking equity stakes in quantum computing firms, despite reports that IonQ, Rigetti, and D-Wave were negotiating with the Commerce Department. Arrangements may involve warrants or loans rather than direct equity. Investor interest remains high, with related shares rising amid government-backed tech speculation.

Ed Yardeni sees current financial bubbles as likely to burst without triggering a crash or recession, describing them as healthy corrections that create buying opportunities. Despite high margin debt, stretched S&P 500 valuations, and speculation in AI infrastructure, he highlights the economy’s resilience, noting past bubbles resolved with brief sell-offs and strong GDP growth.

Scotiabank and JP Morgan maintain bullish outlooks on gold, citing economic uncertainty, central bank buying, and strong investor demand. Scotiabank raised forecasts to $3,450/oz for 2025 and $3,800/oz for 2026, upgrading miners Newmont, Barrick Gold, and AngloGold Ashanti, while JP Morgan sees $5,055 by Q4 2026 and $6,000 by 2028, noting Fed rate cuts and stagflation concerns.

KeyBanc initiated coverage of Booking Holdings with an Overweight rating and $6,450 target, citing global scale, strong margins, and alternative accommodation growth. Analysts expect share gains, margin expansion, and benefits from AI, cost savings, and the “Connected Trip” strategy. Expedia and Airbnb were rated Sector Weight amid softer demand and moderating growth.

BMO Capital Markets cut its price target on SAP SE to $320, maintaining an “Outperform” rating, after softer-than-expected December-quarter guidance despite solid Q3 results. SAP reported €9.08 billion revenue, up 11% YoY, with cloud revenue rising 27%. Analysts noted improving pipeline momentum but warned Q4 bookings may fluctuate with large deal closures.

Mizuho raised Tesla’s price target to $485 and kept an Outperform rating, citing long-term potential in AI, robotics, and self-driving, despite weakening EV sales. The brokerage highlighted robotaxis, Optimus, and FSD expansion as key drivers, while near-term EV deliveries are expected to fall 7% in 2025. Wedbush echoed optimism on FSD and robotics growth.

Upcoming data and events

Today’s U.S. economic calendar is busy, with CPI, core inflation, S&P Global PMIs, Michigan consumer sentiment and inflation expectations, building permits, new home sales, and Baker Hughes rig counts. Key earnings releases will come from Procter & Gamble, Sanofi, and Safran.

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