Stock Market Update

Equity futures point to a modestly lower opening this morning following yesterday's sharp technology-led selloff, which sent the Nasdaq Composite (-2.6%) to its worst session since June. The retreat was particularly pronounced among semiconductor and AI-related stocks, with the PHLX Semiconductor Index plunging 6.7% as concerns about the costs of AI infrastructure investments and the industry's near-term growth prospects weighed heavily on the group.

Despite the sizable losses in the S&P 500 (-1.2%) and Nasdaq Composite, yesterday's selling was far from uniform. The DJIA finished near its flat line, while the S&P 500 Equal Weighted Index (+0.8%) advanced amid rotational buying interest in defensive and other areas of the market. Semiconductor stocks are showing modest gains in premarket trading, although the rebound is relatively small compared with yesterday's steep losses. Several influential mega-cap technology names remain firmly lower, suggesting that the pressure on the broader AI trade has yet to meaningfully subside.

Meanwhile, crude oil prices have climbed back above $100 per barrel amid renewed geopolitical tensions. According to The Wall Street Journal, Iran has threatened to attack U.S. bases, warships, and civilian targets in Gulf countries if the United States resumes military strikes, adding another source of uncertainty for a market already contending with the recent retreat in technology stocks.

Today's remaining economic calendar:

• 9:45 AM ET: October S&P Global U.S. Manufacturing PMI - Prelim; prior 55.9
• 9:45 AM ET: October S&P Global U.S. Services PMI - Prelim; prior 58.8
• 10:00 AM ET: October Univ. of Michigan Consumer Sentiment - Final; Briefing.com consensus 46.3; prior 46.3

In corporate news:

• American Express (AXP 319.16, -5.83, -1.79%) beat the Q3 earnings estimate, reported revenue roughly in line, and raised its FY26 earnings guidance above the FactSet consensus.
• Booz Allen Hamilton (BAH 80.25, +1.68, +2.14%) topped the Q2 earnings estimate but missed on revenue. Its FY27 earnings outlook is above consensus, while its revenue guidance brackets expectations.
• SpaceX (SPCX 148.00, +3.25, +2.3%) is trading higher pre-market after Bloomberg reported it is seeking access to at least 80,000 US cell sites, a potentially significant step toward becoming a fourth nationwide wireless carrier that is weighing on other carrier names.
• Western Digital (WDC 345.10, -9.09, -2.6%) beat earnings estimates by $0.53 and exceeded revenue expectations, issued above-consensus guidance for second-quarter earnings and revenue, and raised its quarterly cash dividend by 17%.

Reviewing overnight developments:

Nikkei reported that Asian markets finished mostly higher as dip buying helped stabilize equities after Thursday's selloff, although concerns about AI investment and Middle East tensions remained in focus.

In news:

• State-backed ETF purchases helped stabilize Chinese equities.
• Brent crude remained above $114 amid escalating Middle East tensions, keeping energy costs and inflation concerns in focus.

In economic data:

• Japan's September National Core CPI +2.1% yr/yr (expected +2.1%; prior +1.7%); National CPI +2.1% yr/yr (prior +1.9%) and unchanged m/m (prior +0.1%)
• Japan's October Manufacturing PMI 53.3 (expected 54.5; prior 54.1), Services PMI 52.0 (prior 51.3), and Composite PMI 52.3 (prior 52.3)
• Australia's October Manufacturing PMI 49.7 (prior 49.6), Services PMI 47.8 (prior 51.9), and Composite PMI 47.7 (prior 51.3)
• India's October Manufacturing PMI 54.9 (prior 55.1), Services PMI 56.2 (prior 55.2), and Composite PMI 56.7 (prior 55.9)

Equity Markets:

• Japan's Nikkei: -0.3%
• Hong Kong's Hang Seng: +0.7%
• China's Shanghai Composite: +0.9%
• India's Sensex: -0.2%
• South Korea's Kospi: +0.3%
• Australia's All Ordinaries: -0.1%

European markets trade broadly lower as elevated oil prices, mixed earnings, and slowing eurozone business activity weigh on sentiment.

In news:

• Kering retreated after disappointing quarterly sales, while L'Oreal advanced after beating sales expectations.
• Energy shares including Shell and BP benefited from elevated oil prices.

In economic data:

• Eurozone October Manufacturing PMI 52.4 (expected 52.7; prior 52.9), Services PMI 51.7 (expected 52.6; prior 53.0), and Composite PMI 51.9 (expected 52.7; prior 53.1)
• Germany's October Manufacturing PMI 54.2 (expected 53.5; prior 53.9), Services PMI 51.7 (expected 52.5; prior 52.9), and Composite PMI 52.8 (expected 53.3; prior 53.8)
• France's October Manufacturing PMI 49.3 (expected 50.5; prior 50.6), Services PMI 48.4 (expected 50.7; prior 51.2), and Composite PMI 48.4 (expected 50.5; prior 51.1)
• U.K.'s October Manufacturing PMI 52.8 (expected 51.8; prior 51.9), Services PMI 53.1 (expected 51.8; prior 52.1), and Composite PMI 53.1 (expected 51.8; prior 52.0)
• U.K.'s September Retail Sales -0.4% m/m (expected -0.1%; prior +0.7%) and +0.8% yr/yr (expected +1.0%; prior +2.7%); Core Retail Sales -0.7% m/m (expected -0.1%; prior +0.9%) and +0.8% yr/yr (expected +1.5%; prior +2.9%)
• U.K.'s October GfK Consumer Confidence -24 (expected -14; prior -13)

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 : -0.5%
• Spain's IBEX 35 : -0.3%