The U.S. stock market appears to be experiencing a bit of a hangover. Tesla and IBM have faced significant challenges, and escalating trade tensions between Washington and China are adding to the anxiety. Investors seem to be glancing at their watches, perhaps wondering what comes next.
Tesla, entering its earnings season dubbed the “Magnificent Seven,” has had a rough start. Its revenue growth fell short of expectations, leading to a dip in stock prices—almost as if investors are sobering up to the reality. Similarly, IBM, once a titan in tech, has warned of a slowdown in its cloud business, which contributed to a downturn in its stock as well.
The dichotomy of these major firms raises questions about American capitalism in 2025. They dominate market indexes yet struggle to capture positive sentiment among investors. As the S&P 500 reaches new highs, many are intricately scrutinizing each earnings report, desperately searching for justifications for the lofty valuations.
IBM’s current issues are a telling example. For a while, it rebranded itself as a leader in “hybrid cloud,” a term that may sound good to analysts but can confuse the average person. Unfortunately, the growth seems to be stalling, and investors, perhaps spoiled by high expectations, are reacting with disappointment and selling.
Tesla’s situation is a different story. What was once viewed as an unstoppable force is now grappling with balancing profits and demand. This “Magnificent Seven,” which constitutes a significant fraction of the S&P stock price, has buoyed the market all year. Yet, if one slips, it might create ripples that affect everyone else.
This dependence on a handful of stocks exposes a structural vulnerability. Even minor missed earnings can send shockwaves through the concentrated portfolio, much like a tightrope walker without a safety net.
On a brighter note, shares of AeonQ, DWave, and Righetti Computing soared after news that the Trump administration might consider investments linked to federal funding.
Meanwhile, energy stocks saw an uptick following new U.S. sanctions on Russian oil producers, while Honeywell and American Airlines reported positive updates. Yet, these victories come wrapped in geopolitical uncertainty. The European Union is tightening its grip on Moscow’s “shadow fleet,” suggesting the oil market will remain a battleground for sanctions for some time.
Investor worries extend beyond mere profits. The ongoing three-week federal government shutdown has left a gap in access to critical statistics like unemployment claims and housing data. The only upcoming number is the Core CPI expected to stay steady at 3.1%.
Outside the U.S., countries are making moves. Canada vows to take brave steps to revive its struggling economy. Unilever is narrowing its focus on beauty products, while Kering is relieved to see Gucci regain its glamour. Over in Seoul, the Bank of Korea is playing it careful, maintaining a 2.5% rate amid global uncertainties.
Today is set to be busy for corporate earnings, particularly Wednesday, which tends to be a peak day. Around 90 companies with market caps exceeding $10 billion will share their results, including heavyweights like Intel, T-Mobile US, Unilever, Thales, and Ford Motor Company.
In terms of the Asia-Pacific markets, most showed a downward trend. India managed a slight uptick (+0.7%), while Australia remained stable. Japan saw a 1.4% drop, indicating some consolidation, with South Korean prices down by 0.8%. Hong Kong and Shanghai fell by more modest margins of -0.2% and -0.6%, respectively. Europe appeared slightly bearish, with the Stoxx Europe 600 up by 0.1%.
Today’s economic highlights:
Focus today is on the French economy. In the U.S., key stats include the Chicago Fed’s National Activity Index, new unemployment claims, and used home sales, detailed in the full calendar.
- Dollar index: 99.122
- Gold: $4,110
- Crude oil (Brent crude): $64.95 (WTI) $61.49
- U.S. 10-year yield: 3.98%
- Bitcoin: $109,150
In corporate news:
- T-Mobile raised its full-year guidance after adding 1 million postpaid subscribers in Q3, largely due to iPhone upgrades and extending direct-to-phone plans.
- Union Pacific saw a 9% profit rise in Q3, aided by aggressive pricing despite incurring $41 million in merger costs from its Norfolk Southern acquisition plans.
- PG&E reported better-than-expected Q3 profits and anticipates a slight increase in 2026 profits driven by higher energy demand from AI and crypto data centers.
- Honeywell raised its 2025 profit outlook and exceeded Q3 expectations thanks to robust aerospace demand, despite the spin-off impacts.
- Blackstone reported a 48% rise in distributable earnings, outpacing Q3 expectations due to strong activity in private equity and credit markets.
- Valero Energy’s Q3 profit beat was attributed to better refining margins and record throughput levels.
- Dow’s third-quarter losses were smaller than expected, offset by U.S. asset gains and cost-saving measures, despite weaker global chemical pricing.
- Allegion raised its 2025 profit forecast, bolstered by high non-residential demand and effective price increases, despite tariff effects.
- West Pharmaceuticals increased its full-year profit forecast, driven by heightened demand for the ingredient used in Eli Lilly and Novo Nordisk’s injectable GLP-1 drugs.
- Hasbro raised its full-year digital game sales outlook, with Magic: The Gathering partially compensating for traditional toy weaknesses.
- Paramount is being seen as likely to acquire Warner Bros. Discovery due to its strong financial and political ties.
- Nonetheless, despite a general profit surprise, IBM shares dropped over 6.5% because of dwindling growth in cloud services raising concerns for investors.
- Tesla’s stock took a dip following lower-than-forecast Q3 profits due to rising costs and regulatory shifts, even as car sales hit record levels.
- Molina Healthcare saw shares plunge 20% after revising down its 2025 profit forecast for the third time, citing escalating medical costs in ACA plans.
- MercadoLibre aims to expand its electronics and home appliances division, planning to sell Casas Bahia products on its Brazilian platform.
- Eli Lilly has granted Cipla the rights to market its weight loss drug Mounjaro under a new brand in India, enhancing access to GLP-1 therapy.
- Google is set to invest in THG’s e-commerce arm, THG Ingenuity, with potential plans to convert the stake into equity at a valuation surpassing £750 million.
- UPS is attempting to block a court decision allowing cross-examination of executives in a price-fixing probe, asserting they’ve already cleared the investigation.
- Boeing has appointed Landon Loomis to lead its China division amid geopolitical tensions, hoping his expertise and Mandarin skills will help secure a major jet contract.
- Woodside Energy sold a 10% share in its Louisiana LNG project to Williams, gaining invaluable pipeline expertise and funding as construction continues.
- Weight loss startup SheMed successfully secured $50 million to expand its reach in the UK, targeting women on Wegovy and Mounjaro with customized plans.
- Polymarket is pursuing funding at a valuation of up to $15 billion, reflecting growing interest in prediction markets post-election.
- Southwest Airlines surprised the market with robust Q3 profits and an optimistic Q4 revenue projection, supported by strong travel demand, despite renovation delays.
- OpenAI plans to introduce data retention options in the UK starting Friday as part of a partnership to enhance efficiency and AI use in public services.
- O’Reilly Automotive has raised its revenue forecast after exceeding Q3 projections, driven by strong demand for auto replacement parts amid new car affordability concerns.
- Kinder Morgan reported increased Q3 profits, attributed to strong gas demand, with expectations of future growth driven by power generation and LNG exports.
- Globe Life reported solid earnings in Q3, bolstered by strong underwriting income and boosted investment returns amid declining macroeconomic pressures.
- Las Vegas Sands exceeded Q3 profit estimates, driven by surging demand at its resorts in Singapore and Macau, leading to higher dividends and share buybacks.
- Reddit has filed a lawsuit against Perplexity for allegedly scraping its data for AI training without permission, intensifying its fight to safeguard its content.
- FirstEnergy surpassed Q3 profit expectations, credited to rising interest rates and high demand, and is now increasing its capital spending plan by 10%.
- Amazon is facing a lawsuit from New Jersey for allegedly discriminating against pregnant and disabled warehouse workers by denying them necessary accommodations and firing some employees.
- Jera has acquired shale gas assets in Louisiana for $1.5 billion.
- Jane Fraser has been appointed Chair of the Board of Citigroup while maintaining her role as CEO.
- Lam Research’s earnings and revenue for the first fiscal quarter rose due to heightened demand for semiconductor equipment.
- Tamboran Resources Corporation has launched a public offering of 2.3 million shares priced at $21 each.
- Netflix faced a 10% stock decline due to a $619 million tax settlement in Brazil.
- AT&T reported revenue growth despite a drop in mobility sales.
