December Nasdaq 100 E-Mini futures (NQZ25) are trending down -0.57% this morning as investors digested weak earnings from notable tech players such as Advanced Micro Devices and Super Micro Computer, while concerns over lofty tech valuations continued to weigh on sentiment.
Advanced Micro Devices (AMD) slid over -4% in pre-market trading after the chipmaker’s Q4 revenue guidance failed to impress investors. Also, Super Micro Computer (SMCI) plunged more than -9% in pre-market trading after the server maker posted weaker-than-expected FQ1 results and gave a disappointing FQ2 adjusted EPS forecast.
Investors now await the U.S. ADP employment report and a new round of corporate earnings reports.
In yesterday’s trading session, Wall Street’s major indexes closed sharply lower. The Magnificent Seven stocks retreated, with Tesla (TSLA) sliding over -5% and Nvidia (NVDA) falling nearly -4%. Also, chip stocks slumped, with Micron Technology (MU) dropping over -7% and Intel (INTC) falling more than -6%. In addition, Palantir Technologies (PLTR) sank over -7% amid valuation concerns, despite the data analytics company reporting upbeat Q3 results and raising its full-year revenue guidance. On the bullish side, Expeditors International of Washington (EXPD) climbed more than +10% and was the top percentage gainer on the S&P 500 after the company posted better-than-expected Q3 results.
“This reinforces our thinking that the stock market is ripe for some sort of material pullback over the near-term, no matter where it’s going over the intermediate/longer-term,” said Matt Maley at Miller Tabak.
On the trade front, China’s Customs Tariff Commission of the State Council announced on Wednesday that it will extend the suspension of a 24% tariff on some U.S. goods for another year while keeping a 10% duty in place, as part of the trade truce agreed at last month’s Trump-Xi summit. The commission also stated that it would lift tariffs of up to 15% on certain U.S. agricultural products. In addition, China will remove export controls against 15 U.S. entities and extend the suspension of such measures for another year for 16 others. The measures are set to take effect on November 10th.
Third-quarter corporate earnings season continues, and investors await new reports from prominent companies today, including McDonald’s (MCD), Applovin (APP), Qualcomm (QCOM), Arm (ARM), Robinhood Markets (HOOD), McKesson (MCK), and DoorDash (DASH). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +7.2% increase in quarterly earnings for Q3 compared to the previous year, marking the smallest rise in two years.
On the economic data front, all eyes are on the U.S. ADP private payrolls report, which is set to be released in a couple of hours. The report will provide fresh insights into the health of the labor market. Economists, on average, forecast that the October ADP Nonfarm Employment Change will stand at 32K, compared to the September figure of -32K.
The U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI will also be closely monitored today. Economists expect the October ISM services index to be 50.7 and the S&P Global services PMI to be 55.2, compared to the previous values of 50.0 and 54.2, respectively.
U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be -2.5 million barrels, compared to last week’s value of -6.9 million barrels.
Meanwhile, the U.S. government shutdown has entered its 36th day, becoming the longest in history. On Tuesday, the Senate failed for the 14th time to pass a bill that would have reopened the government through November 21st. Still, lawmakers from both parties have hinted at the emerging outlines of a deal to end the shutdown, potentially as soon as this week.
The Supreme Court is set to hear arguments later today in the case against President Trump’s use of the International Emergency Economic Powers Act to impose sweeping tariffs. The court will hear arguments from three lawyers, one representing the Trump administration and two representing the small businesses and states contesting the legality of the tariffs.
U.S. rate futures have priced in a 69.9% chance of a 25 basis point rate cut and a 30.1% chance of no rate change at the December FOMC meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.088%, down -0.05%.
The Euro Stoxx 50 Index is down -0.64% this morning as concerns over stretched tech valuations continued to weigh on sentiment. Technology stocks extended their declines on Wednesday. Positive economic data from the region did little to lift sentiment. A survey released on Wednesday showed that the Eurozone economy grew at its quickest pace since May 2023 in October, breaking out of the sluggish growth trend seen earlier this year as service sector activity picked up and demand conditions improved. Separately, data showed that Germany’s monthly factory orders rose in September, signaling a rebound after trade uncertainty weighed on demand during the summer. In addition, the European Central Bank’s wage tracker showed that Eurozone wage growth is expected to ease into 2026 before rebounding to modest levels. Meanwhile, Sweden’s central bank kept its key policy rate unchanged at 1.75% on Wednesday, as widely expected, and reaffirmed that no further adjustments are likely in the near term. Investors now await the Bank of England’s monetary policy decision on Thursday, with the central bank widely expected to leave its benchmark rate unchanged at 4.00%. In corporate news, Vestas Wind Systems A/S (VWS.C.DX) surged over +11% after the Danish wind-turbine maker posted better-than-expected quarterly earnings and launched an unexpected $172 million share buyback.
Germany’s Factory Orders, France’s Industrial Production, Eurozone’s Composite PMI, Eurozone’s Services PMI, and Eurozone’s PPI data were released today.
The German September Factory Orders rose +1.1% m/m, stronger than expectations of +0.9% m/m.
The French September Industrial Production rose +0.8% m/m, stronger than expectations of +0.1% m/m.
Eurozone’s October Composite PMI came in at 52.5, stronger than expectations of 52.2.
Eurozone’s October Services PMI stood at 53.0, stronger than expectations of 52.6.
Eurozone’s September PPI fell -0.1% m/m and -0.2% y/y, compared to expectations of no change m/m and -0.2% y/y.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.23%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.50%.
China’s Shanghai Composite Index reversed earlier losses and closed higher today, defying a brutal sell-off across the region. Photovoltaic and new energy stocks led the gains on Wednesday. The benchmark index found support as U.S.-China trade tensions continued to ease. The Customs Tariff Commission of the State Council announced on Wednesday that it will extend the suspension of a 24% tariff on some U.S. goods for another year while keeping a 10% duty in place, as part of the trade truce agreed at last month’s Trump-Xi summit. The commission also stated that it would lift tariffs of up to 15% on certain U.S. agricultural products. In addition, China will remove export controls against 15 U.S. entities and extend the suspension of such measures for another year for 16 others. The measures are set to take effect on November 10th. Meanwhile, Chinese Premier Li Qiang stated that trade restrictions have created barriers to businesses and pledged that Beijing would work to reform the global economic trading system to make it fairer, more rational, and more transparent. On the economic front, a private survey released on Wednesday showed that China’s services activity grew in October but at the slowest pace in three months, as weaker overseas orders offset the boost from stronger domestic demand. Investors now turn their focus to China’s October trade data, scheduled for release later this week. ANZ analysts said, “Any further deterioration in data going forward may trigger policy stimulus.”
The Chinese October RatingDog Services PMI came in at 52.6, stronger than expectations of 52.5.
Japan’s Nikkei 225 Stock Index closed sharply lower today, weighed down by technology stocks after concerns over lofty valuations and a potential AI bubble sparked a selloff on Wall Street overnight. The benchmark index tumbled as much as 4.7% at one point, marking its sharpest intraday drop since April 11th. Japan’s Deputy Chief Cabinet Secretary Kei Sato said on Wednesday that the government will closely monitor stock market moves with a sense of urgency. “The Nikkei’s declines earlier in the day were too much, but this happens after the index rises sharply. And it was proven that investors would want to pick up stocks once the Nikkei fell below the 50,000,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management. Market ripples spread to the yen, which briefly climbed to its strongest level against the dollar in nearly a week as investors sought refuge in safe-haven assets. Meanwhile, the minutes from the Bank of Japan’s September meeting released on Wednesday showed that a growing number of policymakers felt conditions were aligning for a rate hike, with two members calling for an immediate increase. In a sign that the discussion was shifting toward the precise timing of the next rate hike, several members noted that it would not be too late to wait for “a little more hard data,” according to the minutes. Investors now turn their attention to a slew of Japanese economic data due later this week, including labor cash earnings, household spending, and real wages, which serve as key indicators for the BOJ’s evaluation of wage-driven inflation. In corporate news, Toyota Motor Corp. fell over -3% after the automaker issued a revised full-year profit forecast that fell short of expectations. At the same time, Nintendo climbed more than +6% after the game maker posted better-than-expected quarterly results and raised its full-year sales forecast for the Switch 2 console. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +12.09% to 36.61.
Pre-Market U.S. Stock Movers
Advanced Micro Devices (AMD) slid over -4% in pre-market trading after the chipmaker’s Q4 revenue guidance failed to impress investors.
Super Micro Computer (SMCI) plunged more than -9% in pre-market trading after the server maker posted weaker-than-expected FQ1 results and gave a disappointing FQ2 adjusted EPS forecast.
Axon Enterprise (AXON) slumped over -17% in pre-market trading after the Taser maker reported weaker-than-expected Q3 adjusted EPS.
Pinterest (PINS) sank more than -17% in pre-market trading after the social-media platform posted weaker-than-expected Q3 adjusted EPS and provided downbeat Q4 revenue guidance.
Arista Networks (ANET) tumbled over -11% in pre-market trading after the cloud services provider issued soft Q4 revenue guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - November 5th
McDonald’s (MCD), Applovin (APP), Qualcomm (QCOM), Arm (ARM), Robinhood Markets (HOOD), McKesson (MCK), DoorDash (DASH), CRH (CRH), Emerson (EMR), Johnson Controls (JCI), Cencora Inc (COR), Fortinet (FTNT), Sempra Energy (SRE), Energy Transfer (ET), MetLife (MET), Allstate (ALL), Suncor Energy (SU), Cameco (CCJ), Coca-Cola European (CCEP), Fair Isaac (FICO), TKO Holdings (TKO), Sun Life Financial (SLF), Humana (HUM), Targa Resources (TRGP), Fidelity National Info (FIS), Iron Mountain (IRM), Atmos Energy (ATO), PPL (PPL), HubSpot Inc (HUBS), Figma (FIG), PTC (PTC), Curtiss-Wright (CW), Royalty Pharma (RPRX), Texas Pacific (TPL), Coherent (COHR), Devon Energy (DVN), Brookfield Renewable (BEP), Zimmer Biomet (ZBH), IONQ (IONQ), CGI Inc (GIB), Bunge (BG), Talen Energy (TLN), Trimble (TRMB), Corpay (CPAY), Gfl Environmental (GFL), Bentley (BSY), Performance Food Group Co (PFGC), Unity Software (U), Dynatrace Inc (DT), Joby Aviation (JOBY), Royal Gold (RGLD), Jones Lang LaSalle (JLL), CF Industries (CF), Snap (SNAP), Duolingo (DUOL), Plains All American Pipeline (PAA), Revolution Med (RVMD), Host Hotels Resorts (HST), Procore Technologies (PCOR), Albemarle (ALB), Paycom (PAYC), Permian Resources (PR), Owens Corning (OC), Dutch Bros (BROS), Bio-Techne (TECH), Lineage (LINE), U-Haul Holding (UHAL), NewYork Times (NYT), MKS Instruments (MKSI), Open Text (OTEX), Watts Water Technologies (WTS), Penumbra Inc (PEN), Charles River Laboratories (CRL), Parsons (PSN), Primerica (PRI), Jazz Pharma (JAZZ), Hecla Mining (HL), LYFT (LYFT), Equinox Gold (EQX), Klaviyo (KVYO), APA Corp (APA), Caretrust Inc (CTRE), Sportradar (SRAD), Informatica (INFA), Sitime Corp (SITM), National Fuel Gas (NFG), Sunoco LP (SUN), Cytokinetics Inc (CYTK), ELF Beauty (ELF).
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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