Market Update: S&P 500 and Company Earnings

This morning, December S&P 500 E-Mini Futures are up by +0.32%. Investors are keenly watching for indicators of economic health and the Federal Reserve’s interest rate strategy before important US inflation data is released.

Positive news came from Intel, which saw its stock rise over +8% in pre-market trading following a strong third-quarter report, largely driven by robust demand for PC processors. Likewise, Ford Motor shares increased more than 4% after the automaker posted better-than-expected results for the same period.

Further supporting market sentiment was the announcement from the White House that President Donald Trump will meet with Chinese President Xi Jinping next week at the Asia-Pacific Economic Cooperation summit.

In yesterday’s trading, major Wall Street indexes finished in the green. Notably, Dow Corporation surged nearly +13%, becoming the top performer in the S&P 500 after reporting a narrower-than-expected loss for the third quarter. Energy stocks also gained, influenced by a +5% rise in WTI crude oil prices; companies like APA Corp and Valero Energy saw increases of about +7% and +6%, respectively. On the downside, Molina Healthcare faced a significant drop of over -17% after lowering its full-year profit forecast.

In housing news, existing home sales rose +1.5% month-on-month in September, bringing the total to 4.06 million units. This aligns with expectations and marks a seven-month high. “Lower mortgage rates are boosting home sales,” commented NAR Chief Economist Lawrence Yun. He added that rising home prices are also contributing to overall household wealth.

All attention is now turning to the upcoming US Consumer Inflation Report. It’s set to be released shortly, with the Labor Department making some rare exceptions to its usual protocol to ensure the data is available during the government shutdown. Initially scheduled for October 15, this data is critical for the Fed as it approaches next week’s policy meeting. Economists predict a +0.4% month-on-month CPI for September and +3.1% year-on-year, similar to previous figures.

A survey showed that 45% of investors expect a “risk-on” reaction to the CPI report, while 26% anticipate a “risk-off” mindset, and 29% expect mixed results. However, some analysts, like Emily Bowersox Hill from Bowersox Capital Partners, feel that Friday’s CPI won’t heavily influence the Fed’s decision, which might be more focused on labor market conditions. She suggested there could be two more rate cuts this year—one in October and another in December.

Current interest rate futures indicate a 98.9% chance of a 25 basis point cut at the next meeting and only a 1.1% likelihood of rates remaining unchanged.

Investors are also looking forward to a preliminary survey of US purchasing managers, with expectations for October’s S&P Global Manufacturing PMI at 51.9 and S&P Global Services PMI at 53.5, both showing slight improvements from previous figures.

The University of Michigan’s Consumer Confidence Index is due for release today, with expectations that the final October figure will be adjusted down to 54.6 from an initial reading of 55.0.

On the earnings front, Procter & Gamble, HCA Healthcare, and General Dynamics are set to announce their quarterly results today.

Meanwhile, the US government shutdown has entered its 24th day, with little sign of compromise between the two parties.

In bond markets, the benchmark 10-year US Treasury yield climbed by +0.50% to reach 4.010%.

On the European front, the Euro Stoxx 50 Index dipped -0.18% today, reversing earlier gains as cautious sentiment hung in the air ahead of key US inflation data. Utilities and real estate sectors lagged, while tech stocks performed well, following a strong showing on Wall Street. The index remains on an upward trend for the second week. Businesses in the eurozone experienced unexpected growth in October, notably with new orders in manufacturing rising at the fastest pace in two-and-a-half years. Additionally, UK retail sales showed a surprise increase in September, primarily driven by higher demand for tech products and gold.

In corporate news, Saab AB increased by +7% after adjusting its sales outlook upwards. On the contrary, Hiab Oij saw a drop of -14% due to concerns over US demand affected by tariffs—along with NV, which declined over -4% after reporting lower-than-expected sales for the third quarter.

Today, various economic data were released, including figures on UK Retail and Core Retail Sales, French Consumer Confidence, and Eurozone PMIs.

UK retail sales for September rose +0.5% month-on-month and +1.5% year-on-year, surpassing expectations of a slight decline. Core retail sales also fared better, climbing +2.3% year-on-year. In France, the consumer confidence index exceeded expectations, reaching 90 in October. For the Eurozone, the Composite PMI stood at 52.2, and both Manufacturing and Services PMIs above forecasts indicate stronger economic activity.

In Asia, stock markets showed calm positivity today. The Shanghai Composite Index ended up +0.71%, and Japan’s Nikkei 225 rose by +1.35%. Investors responded well to discussions of technology independence at a recent political meeting in China and welcomed the news of the planned meeting between Presidents Trump and Xi. Semiconductors and AI stocks performed well following China’s reaffirmed commitment to technological advancement. Goldman Sachs posited that China’s focus on technology aligns with its long-term growth strategy.

Japan’s stock market was bolstered by optimism following Wall Street’s performance, although recent data showed inflation accelerating while the manufacturing sector was contracting. The country’s core CPI figure met expectations, climbing +2.9% year-on-year, while manufacturing PMI readings fell below expectations, reflecting challenges within the sector.

Looking at premarket activity in the US, Intel has surged more than +8% after a strong third-quarter report, and Ford Motor has also gained more than 4% for the same reasons. Other movers include Alphabet and Anthropic, which increased over +1% after announcing a significant partnership.

In summary, today’s key earnings announcements will include Procter & Gamble, HCA Healthcare, and General Dynamics.