Stock Market Update

Equity futures point to a lower opening this morning, with Nasdaq futures facing particularly pronounced pressure as Alphabet (GOOG 287.15, -34.74, -10.79%) tumbles by double digits following its disappointing earnings report. Microsoft (MSFT 539.50, +8.49, +1.60%) is faring better following its own results, but technology stocks are broadly on track for a weak start, with the VanEck Semiconductor ETF (SMH) down 1.7% in premarket trading after outperforming in the first three sessions this week.

The weakness follows a modestly higher finish for the major averages yesterday, when stocks navigated a busy session featuring the FOMC decision, a sharp rally in Oracle (ORCL), and rising oil prices and Treasury yields. The Fed left interest rates unchanged while reiterating its commitment to bringing inflation back to its 2.0% target.

Alongside another busy morning of earnings reports, investors face a full economic calendar highlighted by the September PCE price indexes, the Fed's preferred inflation gauges. Headline PCE prices (Briefing.com consensus 0.5%; prior 0.3%) and core PCE prices (Briefing.com consensus 0.3%; prior 0.2%) will be particularly important following yesterday's FOMC meeting, with the CME FedWatch Tool currently assigning an 83.3% probability to a rate hike at the December meeting.

Today's remaining economic calendar:

• 8:30 AM ET: Q3 GDP-Adv.; Briefing.com consensus 3.0%; prior 2.2%
• 8:30 AM ET: Q3 Chain Deflator-Adv.; Briefing.com consensus 3.5%; prior 6.1%
• 8:30 AM ET: September Personal Income; Briefing.com consensus 0.3%; prior 0.2%
• 8:30 AM ET: September Personal Spending; Briefing.com consensus 0.3%; prior 0.9%
• 8:30 AM ET: September PCE Prices; Briefing.com consensus 0.5%; prior 0.3%
• 8:30 AM ET: September PCE Prices - Core; Briefing.com consensus 0.3%; prior 0.2%
• 8:30 AM ET: 10/24 Initial Claims; Briefing.com consensus 196K; prior 194K
• 8:30 AM ET: 10/17 Continuing Claims; prior 1728K
• 10:30 AM ET: 10/24 EIA Natural Gas Inventories; prior +77 bcf

In corporate news:

• Alphabet (GOOG 287.15, -34.74, -10.79%) is sharply lower after missing the earnings consensus by $0.90 while reporting revenue roughly in line. Google Cloud revenue increased 103%, but free cash flow was negative $9.06 billion.
• Microsoft (MSFT 539.50, +8.49, +1.60%) is higher after beating earnings and revenue estimates. Commercial remaining performance obligation increased 73% to $677 billion.
• Caterpillar (CAT 647.26, -66.12, -9.27%) is lower after beating the earnings consensus by $0.14 on revenue that was roughly in line.
• Merck (MRK 143.85, +2.73, +1.93%) beat earnings and revenue estimates and raised its FY26 earnings guidance above consensus while maintaining an in-line revenue outlook.

Reviewing overnight developments:

Asian markets finished mostly lower as concerns about AI spending and valuations pressured technology shares, although strength in chip-testing shares helped Japan outperform, according to Nikkei.

In news:

• The Hong Kong Monetary Authority left its base rate unchanged at 4.25% after the Federal Reserve held rates steady.
• South Korean semiconductor shares diverged despite record overall earnings from one major chipmaker and increased shareholder-return plans from another. Attention now turns to Friday's Bank of Japan decision.

In economic data:

• South Korea's October Manufacturing BSI Index 78 (prior 79)
• Japan's October Household Confidence 35.0 (expected 35.1; prior 35.4)
• Japan's foreign investment in Japanese stocks JPY1,180.9 bln (prior -JPY67.5 bln) and foreign bond buying -JPY92.6 bln (prior -JPY160.5 bln)
• Australia's Q3 Import Price Index -1.1% q/q (expected +1.3%; prior +5.7%) and Export Price Index +1.4% q/q (prior +1.1%)
• New Zealand's October ANZ Business Confidence 52.5 (prior 51.9) and Own Activity 46.2% (prior 47.9%)

Equity Markets:

• Japan's Nikkei: +1.1%
• Hong Kong's Hang Seng: -0.6%
• China's Shanghai Composite: -0.8%
• India's Sensex: +1.2%
• South Korea's Kospi: -1.2%
• Australia's All Ordinaries: +0.5%

European markets trade mostly higher as investors respond to a heavy slate of corporate earnings and await the European Central Bank's policy decision.

In news:

• Earnings updates supported major markets, although weakness in Italy and Spain underscored a session shaped by country- and company-specific catalysts.
• The ECB decision remains in focus following President Christine Lagarde's surprise resignation announcement.

In economic data:

• Eurozone October Business and Consumer Survey 96.9 (expected 97.5; prior 97.5), Industrial Sentiment -3.4 (expected -3.8; prior -3.9), Services Sentiment 5.3 (expected 5.9; prior 5.9), and Consumer Confidence -17.9 (expected -17.9; prior -16.5) U.K. September Mortgage Approvals 53.44K (expected 54.00K; prior 54.81K), Mortgage Lending GBP3.87 bln (expected GBP4.20 bln; prior GBP4.17 bln), Consumer Credit GBP1.914 bln (expected GBP2.200 bln; prior GBP2.683 bln), and Net Lending to Individuals GBP5.800 bln (expected GBP6.200 bln; prior GBP6.874 bln)
• Spain's September Retail Sales -1.4% yr/yr (prior -0.5%)
• Italy's September Unemployment Rate 6.3% (expected 6.2%; prior 6.2%)
• Italy's October Business Confidence 91.9 (expected 92.0; prior 91.9) and Consumer Confidence 90.3 (expected 90.9; prior 91.2)

Equity Markets:

• STOXX Europe 600 : +0.5%
• Germany's DAX : +1.0%
• U.K.'s FTSE 100 : +0.4%
• France's CAC 40 : +1.0%
• Italy's FTSE MIB : -0.1%
• Spain's IBEX 35 : -0.6%