Stock Market Update

Equity futures point to another lower opening after yesterday's broad-based retreat saw the major averages close below their 50-day moving averages for the first time since April. 

Many stocks related to the AI trade came under pressure, particularly NVIDIA (NVDA 184.43, -2.17, -1.2%) after it was revealed that Peter Thiel's hedge fund exited its position in the stock entirely. 

Mega-cap tech is mostly lower in the premarket again this morning, with several "magnificent seven" names receiving downgrades. 

Investors will have a sizable slate of economic data to assess today amid a backlog of releases. 

Initial jobless claims for the week ended October 18 increased to 232k, from an upwardly revised 219k (from 218k). 

Continuing jobless claims for the week ended October 11 increased to 1947k from a downwardly revised 1916k (from 1926k). 

The unemployment data has had little effect on the market's probability for another rate cut in December, which is holding steady just under 50%. 

In corporate news: 

• Alphabet (GOOG 287.30, +1.70, +0.6%) was upgraded to Buy from Hold at Loop Capital, with a target of $320.
• Amazon (AMZN 227.82, -5.05, -2.2%) was downgraded to Neutral from Buy at Rothschild & Co Redburn, with a target of $250.
• Home Depot (HD 345.10, -12.93, -3.6%) missed EPS expectations by $0.10, reported revenues in line, and guided FY26 EPS and revenues below consensus. 
• Microsoft (MSFT 499.12, -8.37, -1.7%) was downgraded to Neutral from Buy at Rothschild & Co Redburn, with a target of $500.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region came under selling pressure Tuesday in a risk-off move that followed Wall Street's disappointing outing on Monday. Japan's Nikkei: -3.2%, Hong Kong's Hang Seng: -1.7%, China's Shanghai Composite: -0.8%, India's Sensex: -0.3%, South Korea's Kospi: -3.3%, Australia's All Ordinaries: -2.0%.

In news:

• Japan's Nikkei (-3.2%) and South Korea's Kospi (-3.3%) both dropped more than 3.0%.
• Japan's prime minister, Takaichi, held a meeting with BOJ Governor Ueda. The two reportedly covered their goals for managing fiscal and monetary policy, respectively.
• JGB yields continued to rise, with the 20-yr note yield (2.81%) hitting its highest level since 1999. The move came as the yen continued to weaken and talk of added government spending swirled. No intervention yet to stem that tide, but Japan's finance minister expressed "deep concern" about FX moves.
• Elsewhere, the RBA Minutes suggested the bank will be patient, given two-sided risks, as members watch incoming data, geopolitical tension between Japan and China over Taiwan persisted, and XPeng disappointed with its Q4 revenue guidance.

In economic data:

• Hong Kong's October unemployment rate 3.8% (prior 3.9%)

Major European indices are on the defensive, mimicking the risk-off tone that has infiltrated markets in the U.S. and Asia. STOXX Europe 600: -1.4% Germany's DAX: -1.5% U.K.'s FTSE 100: -1.5% France's CAC 40: -1.5% Italy's FTSE MIB: -1.9% Spain's IBEX 35: -1.9%

In news:

• Concerns about tech valuations and growth weighed on investor sentiment.
• Market-moving news flow was relatively light.
• Separately, the UK's Prudential Regulation Authority is raising the cap on bank deposit insurance from GPB85K to GBP120K starting in December.

There was no economic data of note.