North American Morning Briefing: Stock Futures Fall as Investors Digest Tech Earnings, Trump-Xi Meeting

Adam

Summary:

U.S. stock futures slipped as investors digested mixed Big Tech earnings, a cautious Fed outlook, and Trump-Xi trade talks seen as easing tensions but lacking clarity. Meta and Microsoft fell, while Alphabet gained.

OPENING CALL

Stock futures pointed lower early Thursday, as investors tried to make sense of a mixed bag of Big Tech earnings, the latest Federal Reserve policy decision, and a meeting between Trump and Chinese leader Xi Jinping.

Citi said while the summit appeared to have de-escalated bilateral trade tensions it was important to watch the details and implementation of the agreements.

Industry watchers said the rare-earths issue appeared to be unresolved, with the expectation that China would maintain export-control procedures that it first put in place in April.

The market rally appeared to be taking a pause after the Fed's Chair Jerome Powell said that another rate cut in December wasn't a foregone conclusion , and while that didn't stop Nvidia becoming the first $5 Trillion company yesterday , earnings from after Wednesday's close could be a source of concern.

Meta Platforms fell after hours after it missed Wall Street's profit expectations and took a one-time charge, while the company's operating margin slipped as its AI costs mounted.

Microsoft also fell after it flagged that demand was still outpacing the capacity of its Azure cloud unit.

Alphabet was the lone bright spot, as both earnings and revenue topped analysts' estimates.

Apple will report its fiscal fourth-quarter earnings after the bell Thursday, with investors hoping for good news ahead of the key holiday-sales window.

The company could double its annual earnings over the next five years, according to a note from BofA , as the tech giant's AI strategy boosts both iPhone and services sales in key markets around the world.

Stocks to Watch

Align Technology reported better-than-expected financials after a rocky second-quarter report. The stock gained 16% after the bell.

Alphabet rose 8.2% premarket.

Carvana stock fell 7.2%.

Chipotle Mexican Grill said consumers are making fewer visits and inflation is driving up costs. Shares sank 18% after-hours.

Shares in eBay were down 9.9% after it issued a weaker-than-expected profit forecast.

FMC Corp. sank 26% after it reduced its quarterly dividend by 86%.

Meta Platforms declined 7.3%.

Microsoft fell 2.9%.

ServiceNow reported earnings and revenue that beat analysts' expectations and raised its full-year subscription guidance. Stock rose 3.1%.

Sprouts Farmers Market shared an outlook that was below analysts' expectations after third-quarter same-store sales disappointed. Shares slid 21%.

Watch For:

GDP for 3Q, First Estimate; Weekly Jobless Claims; Earnings from Amazon.com, Comcast, MasterCard, Merck

Today's Top Headlines/Must Reads:

-Binance Boosted Trump Family's Crypto Company Ahead of Pardon for Its Billionaire Founder

-Meta Still Has a Lot to Prove in AI Race

-YouTube TV Flexes Muscles Again in Showdown With Disney

MARKET WRAPS

Forex:

The dollar eased slightly following cautious signals from the Fed about cutting rates.

The absence of official labor-market data during the shutdown meant some policymakers won't commit to further cuts, Commerzbank said.

The decisive factor will be what the majority leans toward and Powell didn't reveal this, it said.

"I would therefore be cautious about already breaking out into great dollar euphoria."

The euro rose ahead of an European Central Bank policy decision later, at which rates are widely expected to be left unchanged.

"Data has been close to expectations since the September meeting, and we therefore expect no shift in communication on the assessment of the economic outlook nor in the 'meeting-by-meeting' approach," Danske Bank said.

A limited market reaction is possible during the press conference, it added.

Sterling was steady against the dollar and unlikely to fall much further in the near term as BOE rate cut expectations have come far enough for now, ING said.

Bonds:

Treasury yields rose , continuing the increase prompted by the Fed's hawkish message, despite its 25bp rate cut.

TD Securities said that there remained scope for 10-year Treasury yields to decline despite their rise.

Madison Investments said there was more uncertainty in the path for the Fed's rate cuts than the market had been assuming, and the labor picture might not be as weak as the market thinks it is.

"Given how intermediate yields had already fallen ahead of the meeting on market expectations, that part of the yield curve could face upward pressure."

Any meaningful movement in the long end will be more of a 2026 story, given lingering tariff-related pressures on inflation, it added.

Energy:

Oil fell despite Trump saying he would lower tariffs on China after the meeting with Xi.

Prices settled higher in the previous session, lifted by a larger-than-anticipated draw in crude stockpiles, but concerns over a global glut continue to weigh on the market.

"Crude remains headed for a third consecutive monthly decline, pressured by expectations of rising supply from OPEC+ and rival producers," MUFG said.

"The next OPEC+ meeting on Nov. 2 is expected to consider modest output increases, adding to traders' concerns about oversupply."

Metals:

Gold prices fell on dimmed hopes for further Fed rate cuts in December.

"The ongoing government shutdown has clearly clouded the Fed's view, with limited access to official government data," FP Markets said.

Lombard Odier said the gold market was technically overbought after solid gains in the past few weeks, helped by rising trade tensions, but it maintained a positive stance, and raised its 12-month target to $4,600.

William Blair said that sustaining the gold rally will require continued investor and central bank demand.

Gold Chart

Gold was likely to find solid support at the weekly Ichimoku cloud's base line of $3,751,

even though there may be scope for it to pull back further, UOB said.

Copper

Copper fell, pulling back after hitting a record high amid supply disruption concerns.

Optimism about the potential trade deal with China had been a key driver of copper's recent gains, ANZ said.

Goldman Sachs said its break above the $11,000-a-ton mark was unlikely to hold without a meaningful drop in inventories.

"We do not believe that the fundamental tightness expected by the market will emerge over the next six months."

"Even accounting for a sizable decline in global refined production, we hold to our view that the market will be in small surplus in 2026," it added.

TODAY'S TOP HEADLINES

TotalEnergies Posts Jump in Profit

TotalEnergies reported a rise in profit in the third quarter, boosted by higher production and stronger refining profit.

The company said Thursday that net profit rose to $3.68 billion from $2.29 billion in the same period last year. Adjusted net income was $3.98 billion compared with $3.58 billion in the second quarter and $4.07 billion in 2024's third quarter.

Carlsberg Beer Volumes Fall on Tough Consumer Sentiment

Carlsberg reported a drop in revenue and beer volumes for the third quarter, while maintaining its full-year guidance, as it cited tough consumer sentiment and challenges from the war in Ukraine on its business.

The Danish brewer on Thursday reported a 3% drop in organic volumes for the third quarter to 40.6 million hectoliters, which was below market expectations of 41.6 million hectoliters.

Shell Maintains $3.5 Billion Buyback as Earnings Rise

Shell continued its $3.5 billion quarterly buyback after adjusted earnings rose more than expected, boosted by an improved trading performance and higher margins.

The British energy company said the rise in earnings reflected record production in Brazil and 20-year highs in the Gulf of Mexico, coupled with the highest adjusted earnings in its marketing division in more than a decade.

Germany's Economy Stagnates Amid Tentative Hopes for Revival

Germany's economy stagnated in the three months through September as it adjusted to higher U.S. tariffs, but recent surveys show tentative signs of a recovery as a tumultuous year draws to a close.

The zero growth in gross domestic product in the third quarter matched expectations from a consensus of economists, and compares with a 0.2% decline in the second quarter. Much of that reflects the drag on economic growth from weaker exports to the U.S. after President Trump ramped up tariffs at the start of the second quarter.

Number of U.K. Companies Hit by Critical Financial Distress Surges, Study Says

The number of U.K. businesses in critical financial distress soared in the third quarter, reflecting tax increases, inflation and a challenging economic backdrop, according to a new study.

The number of businesses in critical financial distress surged by 78% on year and by 13% on quarter to 55,530 companies, consultancy Begbies Traynor said in its latest Red Flag Alert report on Thursday.

Japan's Central Bank Holds Fire as Tariffs, Politics Cloud Policy Target

TOKYO-The Bank of Japan held rates steady again, narrowing the window of opportunity to hike before year's end as it waits for clarity on the impact of tariffs and a political leadership change in Tokyo.

In a widely expected move, the central bank maintained its overnight call rate target at 0.5%, extending a pause since its last hike in January. That leaves one more chance to resume tightening this year: at the bank's final meeting in December.

Dutch Hard-Right Leader Geert Wilders Set to Exit Power

Dutch firebrand Geert Wilders's hard-right Freedom Party was on the brink of losing power after elections in the Netherlands on Wednesday, indicating that Europe's populist politicians who draw strong support while in opposition can struggle once they are in government.

Source: morningstar

To stay updated on all economic events of today, please check out our Economic calendar

News, historical chart data, and fundamental company data are provided by FastBull Ltd.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.