Stock Market Update

Equity futures point to a higher opening this morning, with the AI trade poised for a stronger showing following solid earnings from SpaceX (SPCX), which is moving firmly higher in premarket trading.

The early strength follows a session yesterday in which technology and AI-related stocks recovered from steep opening losses but ultimately lagged the broader market. Buying interest instead favored small- and mid-cap stocks, with nine of the 11 S&P 500 sectors finishing higher despite continued weakness among several influential mega-cap names.

Meanwhile, Treasury yields remain relatively stable despite elevated crude oil prices, providing some support for equities as investors turn their attention to another round of major earnings reports. Meta Platforms (META) and Tesla (TSLA) are both scheduled to release quarterly results after today's close, putting additional focus on the outlook for mega-cap growth stocks as the third-quarter earnings season gains momentum.

On the U.S. data front:

• 10/17 MBA Mortgage Applications Index -5.3%; prior -2.7%

Today's remaining economic calendar:

• 10:30 AM ET: 10/17 EIA Crude Oil Inventories; prior -8.557M

In corporate news:

• SpaceX (SPCX 158.23, +10.44, +7.06%) beat Q3 earnings and revenue estimates, with revenue increasing sharply from the year-ago period.
• Netflix (NFLX 63.98, -5.87, -8.4%)  beat EPS expectations by $0.05, reported revenues in-line; guided Q4 EPS below consensus with revenues below consensus, and guided FY26 revs below consensus
• Capital One (COF 206.70, +5.14, +2.55%) exceeded the Q3 earnings consensus, reported revenue roughly in line, and recorded a higher net interest margin.
• Super Micro Computer (SMCI 36.10, +3.63, +11.18%) is indicated sharply higher in reaction to earnings and guidance.
• Zoom Communications (ZM 101.56, +4.10, +4.21%) was upgraded to Outperform from Perform at Oppenheimer, which cited increased confidence in the company's transition toward a broader AI communications and workflow platform.

Reviewing overnight developments:

Nikkei reported that Asian markets finished mixed, as semiconductor strength in Japan and South Korea contrasted with company-specific weakness in China and Hong Kong.

In news:

• Nikkei reported that semiconductor shares advanced in Japan and South Korea amid improved sentiment toward AI spending and signs of resilient AI-related demand.
• Nikkei reported that slowing profit growth at a major battery producer contributed to weakness in China and Hong Kong.

In economic data:

• Japan's September Trade Balance -JPY536.6 bln (expected -JPY181.0 bln; prior -JPY1,111.9 bln), with exports +16.7% yr/yr (expected +20.1%; prior +19.3%) and imports +18.9% yr/yr (expected +19.6%; prior +28.0%)
• South Korea's September PPI +0.2% m/m (prior +0.1%) and +7.7% yr/yr (prior +7.9%)
• New Zealand's September Credit Card Spending +6.9% yr/yr (prior +3.6%)

Equity Markets:

• Japan's Nikkei: +0.9%
• Hong Kong's Hang Seng: -0.9%
• China's Shanghai Composite: -0.6%
• India's Sensex: -0.2%
• South Korea's Kospi: +3.3%
• Australia's All Ordinaries: +0.1%

European markets trade mostly higher, with upbeat corporate results and renewed technology strength helping offset elevated oil prices and bond yields.

In news:

• Technology shares have strengthened across the region, while hotter inflation and fiscal concerns have weighed more heavily on the U.K.

In economic data:

• U.K.'s September CPI +0.4% m/m (expected +0.3%; prior +0.5%) and +3.5% yr/yr (expected +3.4%; prior +3.1%); Core CPI +0.2% m/m (expected +0.2%; prior +0.3%) and +2.8% yr/yr (expected +2.8%; prior +2.6%)
• U.K.'s September PPI Input +1.5% m/m (expected +1.3%; prior +0.5%) and +8.3% yr/yr (expected +7.2%; prior +6.7%); PPI Output +0.8% m/m (expected +0.7%; prior +0.7%) and +4.6% yr/yr (expected +4.3%; prior +3.8%)
• U.K.'s September Public Sector Net Borrowing GBP24.50 bln (expected GBP23.80 bln; prior GBP18.30 bln)
• Switzerland's September M3 Money Supply CHF1,238.9 bln (prior CHF1,239.5 bln)

Equity Markets:

• STOXX Europe 600 : +0.5%
• Germany's DAX : +0.7%
• U.K.'s FTSE 100 : +0.1%
• France's CAC 40 : +0.6%
• Italy's FTSE MIB : +0.6%
• Spain's IBEX 35 : +0.7%