Stock Market Update

Equity futures point to a mostly lower open this morning following yesterday's mostly higher finish, which was driven by a rebound in technology and mega-cap stocks. Investors stepped back into AI-related names after last week's sharp selloff amid concerns about valuations and the reliance on debt to finance infrastructure expansion, although the recovery lost considerable momentum as the session progressed.

Buying interest was also relatively narrow, with the S&P 500 Equal Weight Index finishing lower despite gains in the cap-weighted benchmark. That lack of broader participation remains a concern this morning as semiconductor stocks extend yesterday afternoon's pullback in premarket trading, while rising crude oil prices present an additional headwind for equities.

Overseas markets also have a weaker bias. According to Nikkei, AI-spending concerns and elevated borrowing costs weighed on Asian technology shares, while AI-related selling, higher oil prices, and political uncertainty have pressured European markets.

September Housing Starts and Building Permits will be released at 8:30 ET, followed by September Pending Home Sales at 10:00 ET. A busy earnings slate also remains in focus before the open. 

Today's remaining economic calendar:

• 8:30 AM ET: September Housing Starts; Briefing.com consensus 1305K; prior 1275K
• 8:30 AM ET: September Building Permits; Briefing.com consensus 1390K; prior 1394K
• 10:00 AM ET: September Pending Home Sales; Briefing.com consensus 0.1%; prior 0.3%

In corporate news:

• General Motors (GM 76.84, -5.91, -7.14%) is gapping lower after narrowly beating earnings estimates and topping revenue expectations. The company narrowed its FY26 EPS and adjusted EBIT guidance, and its board approved a new $20 billion multi-year share repurchase authorization.
• 3M (MMM 164.00, +1.92, +1.18%) beat earnings estimates, reported revenue in line with expectations, and raised its FY26 EPS guidance above consensus.
• GE Aerospace (GE 305.40, -5.88, -1.89%) is gapping lower despite beating earnings and revenue estimates and raising its FY26 EPS and adjusted revenue growth outlooks.
• RTX (RTX 195.00, +2.89, +1.50%) is gapping higher after beating earnings and revenue estimates and raising its FY26 EPS and revenue guidance above consensus.

Reviewing overnight developments:

According to Nikkei, regional markets finished mostly lower as concerns about AI spending and elevated borrowing costs weighed on technology shares. Selling in South Korea extended beyond semiconductors, while mainland China was an exception to the broader weakness.

In news:

• South Korea plans KRW800 trillion of investment in four semiconductor fabrication plants, while SK Hynix outlined a KRW2 trillion supplier financing program.

In economic data:

• China's PBoC left its one-year Loan Prime Rate unchanged at 3.00%, in line with expectations, and maintained the five-year Loan Prime Rate at 3.50%, also as expected.

Equity Markets:

• Japan's Nikkei: -1.3%
• Hong Kong's Hang Seng: -1.3%
• China's Shanghai Composite: +0.1%
• India's Sensex: CLOSED
• South Korea's Kospi: -3.7%
• Australia's All Ordinaries: -0.4%

European markets trade broadly lower as weakness in AI-related shares combines with higher oil prices and persistent political uncertainty.

In news:

• Technology shares are among the weakest groups, while banks and defense shares are also under pressure.

In economic data:

• U.K.'s August Unemployment Rate 4.7% (expected 4.9%; prior 4.9%); Employment Change +102K (expected +20K; prior +67K); Average Earnings including bonuses +3.7% yr/yr (expected +3.8%; prior +3.9%) and excluding bonuses +3.7% (expected +3.6%; prior +3.6%)
• U.K.'s September Claimant Count Change +30.3K (expected +19.4K; prior +7.0K)
• Germany's September PPI +1.9% m/m (expected +1.5%; prior +1.1%) and +6.7% yr/yr (expected +6.3%; prior +4.6%)
• Germany's October ZEW Economic Sentiment 28.1 (expected 30.2; prior 34.7) and Current Conditions -35.9 (expected -45.0; prior -47.1); Eurozone ZEW Economic Sentiment 18.5 (expected 23.6; prior 25.8) Eurozone August Current Account EUR8.7 bln (expected EUR29.2 bln; prior EUR27.2 bln) and Construction Output +1.85% m/m (prior +0.19%)

Equity Markets:

• STOXX Europe 600 : -0.6%
• Germany's DAX : -0.8%
• U.K.'s FTSE 100 : -0.6%
• France's CAC 40 : -0.7%
• Italy's FTSE MIB : -0.8%
• Spain's IBEX 35 : -0.4%