Stock Market Update

Equity futures point to a mostly lower opening this morning, with futures tied to the Nasdaq Composite indicating particularly sharp losses as selling pressure across technology stocks continues following yesterday's retreat.

Wednesday's session saw the S&P 500 (-1.1%) and Nasdaq Composite (-1.9%) post sizable declines as accelerating inflation fueled concerns about additional Fed tightening, while persistent weakness in semiconductor and other technology stocks weighed heavily on the broader market. Defensive stocks fared considerably better, helping the DJIA (-0.1%) finish with a modest loss.

Technology stocks remain under pressure this morning amid growing concerns about the financing of the massive AI infrastructure buildout, particularly the reliance on debt to fund expansion as borrowing costs remain elevated. Taiwan Semiconductor Manufacturing's (TSM) earnings report is adding to the cautious sentiment, as investors had been looking for more substantial upside guidance despite the company's solid results, leaving the semiconductor group vulnerable to further selling following its recent sharp decline.

Meanwhile, Treasuries are attracting safe-haven buying interest despite a modest increase in crude oil prices, with the 10-year note yield falling more than 10 basis points.

Overseas trade is mixed. Asian markets came under broad pressure amid weakness in technology and semiconductor shares, while European markets have been more resilient, with strength in the U.K. offsetting weakness in technology-linked shares elsewhere.

The focus will soon turn to a busy 8:30 ET data slate led by September PPI and retail sales, particularly after yesterday's CPI report showed inflation accelrating on a year-over-year basis. Weekly jobless claims and regional manufacturing surveys will also be released at that time.

Today's remaining economic calendar:

• 8:30 AM ET: September PPI; Briefing.com consensus 0.5%; prior 0.4%
• 8:30 AM ET: September Core PPI; Briefing.com consensus 0.3%; prior 0.2%
• 8:30 AM ET: September Retail Sales; Briefing.com consensus 0.3%; prior 1.2%
• 8:30 AM ET: September Retail Sales, ex-auto; Briefing.com consensus 0.3%; prior 1.4%
• 8:30 AM ET: 10/10 Initial Claims; Briefing.com consensus 200K; prior 197K
• 8:30 AM ET: 10/03 Continuing Claims; prior 1716K
• 8:30 AM ET: October Empire State Manufacturing; Briefing.com consensus 7.0; prior 7.6
• 8:30 AM ET: October Philadelphia Fed Index; Briefing.com consensus 29.0; prior 37.8
• 10:00 AM ET: August Business Inventories; Briefing.com consensus 0.4%; prior 0.8%
• 10:30 AM ET: 10/10 EIA Natural Gas Inventories; prior +85 bcf
• 12:00 PM ET: 10/10 EIA Crude Oil Inventories; prior -3.186M

In corporate news:

• Anthropic told investors that Q3 revenue reached $16.8 billion, according to Bloomberg.
• CoreWeave (CRW 63.09, -2.64, -4.0%) yields top 15%, according to Bloomberg. 
• Taiwan Semiconductor Manufacturing (TSM 422.14, -7.86, -1.83%) beat third-quarter earnings and revenue estimates and guided fourth-quarter revenue above consensus.
• Ericsson (ERIC 10.69, +1.11, +11.59%) exceeded third-quarter earnings and revenue expectations.
• Associated Press reported that Penske Automotive Group (PAG 211.35, +16.56, +8.50%) agreed to be taken private in an all-cash deal.

Reviewing overnight developments:

Nikkei reported broad selling across Asia, led by technology and semiconductor weakness in Japan, South Korea, China, and Hong Kong, while India advanced.

In news:

• Nikkei reported that renewed China-EU trade tensions compounded weakness in China's AI-related shares.

In economic data:

• Japan's August Core Machinery Orders 5.2% m/m (expected 2.2%; prior -3.7%) and 18.6% yr/yr (expected 15.7%; prior 11.2%); Industrial Production -2.4% m/m (expected -1.7%; prior -0.2%) and Capacity Utilization -4.2% m/m (prior 0.5%)
• South Korea's September Trade Balance $49.97 bln (expected $49.85 bln; prior $34.79 bln); Exports 83.7% yr/yr (expected 83.5%; prior 68.7%) and Imports 26.0% yr/yr (expected 26.0%; prior 22.4%)
• Australia's September Employment Change -39.3K (expected 19.6K; prior 29.3K), Full Employment Change 34.4K (prior -4.0K), Unemployment Rate 4.7% (expected 4.6%; prior 4.7%), and Participation Rate 66.8% (expected 67.0%; prior 67.0%)

Equity Markets:

• Japan's Nikkei: -4.9%
• Hong Kong's Hang Seng: -1.0%
• China's Shanghai Composite: -1.6%
• India's Sensex: +2.1%
• South Korea's Kospi: -7.6%
• Australia's All Ordinaries: -0.3%

European markets are mixed and holding up better than Asian markets, with the tech-light U.K. market outperforming as technology-related shares weigh elsewhere.

In news:

• Technology-related shares are among the laggards, while consumer and health care names have provided support in the U.K.

In economic data:

• Eurozone August Industrial Production -0.5% m/m (expected 0.0%; prior -0.3%) and -1.1% yr/yr (expected -0.1%; prior -0.3%)
• U.K.'s August GDP 0.1% m/m (expected -0.1%; prior 0.4%) and 2.1% yr/yr (expected 1.7%; prior 1.8%); three-month GDP growth 0.7% (expected 0.5%; prior 0.5%)
• U.K.'s August Industrial Production 0.8% m/m (expected -0.1%; prior 0.3%) and 1.6% yr/yr (expected 0.7%; prior 0.8%); Manufacturing Production 1.2% m/m (expected -0.1%; prior 1.0%) and 3.0% yr/yr (expected 2.3%; prior 2.2%)
• U.K.'s August Trade Balance -GBP18.01 bln (expected -GBP21.90 bln; prior -GBP19.30 bln); Construction Output -0.2% m/m (expected 0.0%; prior -0.5%) and -1.8% yr/yr (expected -1.6%; prior -1.9%)
• France's September CPI -0.3% m/m (expected -0.3%; prior 0.7%) and 3.1% yr/yr (expected 3.0%; prior 2.4%); HICP -0.3% m/m (expected -0.4%; prior 0.4%) and 3.4% yr/yr (expected 3.4%; prior 3.4%)
• Switzerland's September PPI 0.3% m/m (expected 0.6%; prior 0.7%) and -0.2% yr/yr (prior -0.7%)

Equity Markets:

• STOXX Europe 600 : -0.3%
• Germany's DAX : -0.4%
• U.K.'s FTSE 100 : +0.6%
• France's CAC 40 : +0.2%
• Italy's FTSE MIB : -0.8%
• Spain's IBEX 35 : flat