Stock Market Update

S&P 500 futures point to a modestly higher open, but the Nasdaq 100 futures suggest a lower open is in store for that index.

Asian markets finished mostly higher on Friday, rebounding from the recent technology rout after record earnings from TSMC and stronger AI-related demand helped ease concerns surrounding the investment boom. Japan's Nikkei 225 rose 1.4%, with Lasertec (+5%), Kioxia (+4%), Toyota Motor (+2%), and Taiyo Yuden (+2%) leading the recovery, although the index still recorded its steepest weekly decline since July. South Korea's KOSPI rallied 2.1% following seven consecutive declines, with foreign investors returning to net buying and Hanwha Aerospace (+8%), Samsung C&T (+6%), Hyundai Motor (+5%), and Samsung Electronics (+3%) among the leaders. China's Shanghai Composite edged up 0.2%, while the Shenzhen Component slipped 0.1% to a more-than-one-year low as Beijing's efforts to support equities competed with persistent China-EU trade tensions. Hong Kong's Hang Seng gained 0.5%, with Lenovo (+6%), Genscript Biotech (+5%), and Kingboard Laminates (+3%) participating in the rebound. The recovery provides some relief following this week's sharp semiconductor selloff, although concerns surrounding elevated AI valuations, growing Chinese competition in memory chips, and the sustainability of heavy capital spending remain unresolved.

• In economic data:
  • South Korea's September unemployment rate was 2.6% (prior 2.7%).
  • South Korea's September Import Price Index increased 17.6% yr/yr (prior 15.9%).
  • South Korea's September Export Price Index increased 40.9% yr/yr (prior 42.7%).

European markets trade mostly higher, with easing concerns surrounding AI investment and interest rates combining with lower oil prices to support risk appetite despite hotter inflation data. Germany's DAX rises 1.0% to a more than three-week high, with BMW (+2%), Mercedes-Benz (+2%), and Volkswagen (+2%) participating in broad strength across autos, industrials, retailers, banks, and telecom shares, while Commerzbank (+1%) advances after the ECB approved UniCredit's plan to increase its stake. France's CAC 40 gains 0.4% despite renewed EU-China trade tensions, with investors monitoring potential European restrictions on Chinese imports and Beijing's warning that it could retaliate against discriminatory measures. London's FTSE 100 underperforms with a 0.1% gain as reports of potential tax increases on banks pressure Lloyds (-3%), NatWest (-2%), and Barclays (-1%), while AstraZeneca (-1%), GSK (-1%), and Rio Tinto (-1%) also retreat. Eurozone inflation accelerated to 3.8% yr/yr in September from 3.2%, while core inflation edged up to 2.5%, keeping price pressures in focus even as broader concerns surrounding interest rates ease. The STOXX Europe 600 rises 0.7%, while Italy's FTSE MIB and Spain's IBEX 35 each gain 1.1%, underscoring the broadly positive tone outside the U.K.

• In economic data:
  • Eurozone September CPI increased 0.6% m/m (expected 0.6%; prior 0.4%) and 3.8% yr/yr (expected 3.8%; prior 3.2%).
  • Eurozone September core CPI increased 0.2% m/m (expected 0.2%; prior 0.2%) and 2.5% yr/yr (expected 2.5%; prior 2.4%).
  • Eurozone September HICP excluding energy and food increased 2.2% yr/yr (expected 2.2%; prior 2.1%).
  • The Eurozone's August trade balance showed a EUR16.1 billion deficit (prior EUR10.7 billion surplus).
  • Italy's September CPI increased 0.7% m/m (expected 0.7%; prior 0.5%) and 4.2% yr/yr (expected 4.2%; prior 3.3%).
  • Italy's September HICP increased 2.1% m/m (expected 2.0%; prior 0.1%) and 4.2% yr/yr (expected 4.1%; prior 3.2%).
  • Italy's August trade surplus totaled EUR1.773 billion (expected EUR7.500 billion; prior EUR8.247 billion).