Preview of US Stock Market | The three major stock index futures are mixed, Google falls after earnings, US September PCE and Q3 GDP data due tonight, Amazon and Intel to report after the bell.

Pre-Market Market Moves 1. On Thursday, October 29, in pre-market trading, the three major U.S. stock index futures were mixed. As of press time, Dow futures were up 0.02%, S&P 500 futures were down 0.15%, and Nasdaq futures were down 0.92%. 2. As of press time, Germany's DAX was up 1.06%, the UK's FTSE 100 was up 0.48%, France's CAC 40 was up 1.03%, and the Euro Stoxx 50 was up 0.40%. 3. As of press time, WTI crude was down 1.31% at $101.43/barrel. Brent crude was down 1.33% at $110.16/barrel. Market News U.S. Q3 GDP and September PCE data are coming! The U.S. Bureau of Economic Analysis will release the preliminary Q3 GDP reading and September PCE data simultaneously tonight. The release of these two major data points comes just as the Federal Reserve has announced it is keeping the federal funds rate target range unchanged at 3.75% to 4.00%. The market widely expects U.S. Q3 real GDP annualized quarter-over-quarter growth to accelerate sharply to 3.2% from 2.2% in Q2. As the Fed's preferred inflation gauge, the September PCE price index is highly likely to remain above the official 2% target for a 68th consecutive month, meaning high inflation has persisted for nearly six years. The market expects that, affected by rising crude oil prices, September headline PCE is expected to rise 0.5% month-over-month, with the year-over-year rate rebounding from 3.4% last month to a range of 3.6% to 3.7%. Core PCE, which excludes food and energy, better reflects persistent inflationary pressure in areas such as services. The market expects September core PCE to rise 0.3% month-over-month, with the year-over-year rate edging up to 3.1% from 3.0%. If Q3 GDP ultimately exceeds 3.2% and core PCE breaks above 3.1%, this combination would send a dual signal of a resilient economy and accelerating inflation. If the labor market does not deteriorate materially before the December 8-9 monetary policy meeting, Fed officials will find it difficult to find reasons to delay further tightening. Six years of inflation pressure and two dissenting votes forcing the issue: A Fed rate hike in December is "locked and loaded," with another possibly coming in March next year? Fed Chair Warsh on Wednesday kept the Fed on track to raise rates again this year, although he insisted on refusing to give any clear guidance on the future policy path. Within his self-imposed communication boundaries, Warsh used an assessment of a strong economy and warnings about persistent inflation to signal to the outside world that the Fed's job is not yet done. This stance reinforced market expectations that, after holding steady on Wednesday, officials will raise borrowing costs in December and could hike once more in early 2027. For Deutsche Bank Aktiengesellschaft senior U.S. economist Brett Ryan, Warsh's refusal to call financial conditions "tight," combined with his optimistic assessment of growth, effectively confirms the Fed's September projection path of "one more hike this year." "He is saying they will tighten further, just not saying it explicitly." Nomura research report reveals the "AI growth panic" is receding! Earnings delivery and capital flows resonate in relay, with the AI computing power theme leading the tech stock counteroffensive. The latest research report from Nomura cross-asset strategist Charlie McElligott shows that the AI trading theme is emerging from a previous bout of AI computing power and tech growth panic amplified by concerns over surging AI financing costs, overly crowded positioning, and accelerated hedge fund deleveraging. The strategist emphasized that large-scale AI financing being absorbed, semiconductor giants and the two major cloud computing giants generally delivering strong results, and Anthropic's IPO filing disclosure have jointly alleviated the two-week "AI growth panic," while the clearing of crowded positions and excessive leverage has also created conditions for a market recovery. Middle East tensions are tightening again: Iran rejects ceasefire draft, U.S. reportedly planning military action against Iran after midterms. According to media reports, Tehran cannot accept the ceasefire draft submitted by Qatar this week and has explicitly stated it will make no concessions on the nuclear issue; the U.S. has notified multiple Gulf Arab states through diplomatic and military channels that they should prepare for a "short and intense military operation" after the U.S. midterm elections (November 3). A week earlier, Houthi forces launched multiple rounds of missile and drone attacks on Saudi Arabia's Ministry of Defense, two international airports, and oil facilities, and the charter cost for very large crude carriers from the Arabian Gulf to the Mediterranean has doubled from $16 per barrel to $32. Individual Stock News AI spawns "optical" M&A: Marvell Technology, Inc. (MRVL.US) seeks to swallow Lumentum (LITE.US), potentially ranking among the top ten largest tech deals in history. According to people familiar with the matter, Marvell Technology, Inc. is in advanced talks to acquire data center optical device maker Lumentum. In the race to scale up in artificial intelligence, this could become a heavyweight deal. If the acquisition of Lumentum succeeds, the deal is likely to rank among the top ten largest tech and telecom M&A deals of all time. Lumentum produces lasers and other optical technologies used to transmit Beijing Vastdata Technology at extremely high rates. These hardware components underpin the AI boom, enabling data centers and telecom companies to transmit information between servers, facilities, and other locations. Marvell is a semiconductor manufacturer that purchases lasers from Lumentum, so the deal is expected to simplify its supply chain. Marvell has been increasing its bets on optical and photonic technologies that connect data center equipment. Earlier this year, the company acquired photonics company Celestial AI. As of press time, in Thursday's U.S. pre-market, Marvell Technology, Inc. was down more than 11%, while Lumentum was up nearly 6%. Alphabet (GOOGL.US) Q3 cloud revenue surged 103% year-over-year, free cash flow turned negative from positive, and the stock plunged in pre-market. The earnings report showed Alphabet Q3 total revenue of $127.6 billion, up 25% year-over-year, but below the market expectation of $128.2 billion; operating profit of $40.6 billion, up 30% year-over-year; earnings per share of $2.12, below the market expectation of $2.99. Alphabet Inc. Class C's cloud business became the biggest highlight of the quarter, with revenue reaching $30.709 billion, surging 103% from $15.157 billion a year earlier, hitting a record high. Alphabet Inc. Class C said the strong cloud growth was mainly driven by continued expansion of demand for enterprise AI infrastructure, enterprise AI solutions, and core cloud services under Google Cloud Platform (GCP). In addition, TPU system sales also made an important contribution to revenue growth. Alphabet Inc. Class C is building AI infrastructure for itself and its customers, pushing capital expenditure to record levels. Investors are increasingly pressuring the company to prove that this spending is paying off. The company's Q3 equity investments generated an $8.7 billion loss, dragging down net income. This contrasts sharply with investment gains recorded a year earlier and a huge gain in the second quarter (the Q2 gain largely came from its stakes in SpaceX and Anthropic). Affected by increased TPU inventory and a $5.2 billion EU fine, free cash flow for the quarter was negative $9.1 billion, and has been negative for two consecutive quarters. The company maintained its full-year 2026 capital expenditure guidance of $195 billion to $205 billion and expects capital expenditure to continue rising significantly in 2027. As of press time, Alphabet was down nearly 11% in Thursday's U.S. pre-market. Microsoft Corporation (MSFT.US) Q1 revenue rose 19% year-over-year to nearly $92.3 billion, Azure revenue surged 48%. Data showed the company's quarterly revenue reached $92.279 billion, up 19% year-over-year, faster than the market expectation of 17%; non-GAAP adjusted net income reached $36.422 billion, up 18% year-over-year; adjusted earnings per share were $4.89, up from $4.13 a year earlier, a year-over-year increase of 18%. The cloud computing business continued to be an important driver of Microsoft Corporation's performance growth. In the first fiscal quarter, Microsoft Corporation Azure revenue reached $33.165 billion, up 48% from $22.384 billion a year earlier, also faster than the market expectation of 44%, reflecting continued expansion of enterprise demand for cloud computing and AI infrastructure. On cash flow, Microsoft Corporation's first fiscal quarter operating cash flow reached $58 billion, up about 29% from $45.057 billion a year earlier. At the same time, the company continued to increase infrastructure investment. Capital expenditure for the purchase of property and equipment in the quarter reached $39.367 billion, up about 103% from $19.394 billion a year earlier. As of press time, Microsoft Corporation was up nearly 2% in Thursday's U.S. pre-market. DoorDash (DASH.US) officially announced the acquisition of Instacart. The two sides agreed to acquire Instacart at $65 per share, with total equity value of approximately $17 billion. At least 75% of the total transaction consideration will be paid in cash, and Instacart shareholders may choose cash, DoorDash stock, or a combination of both. AI foundry and advanced packaging dual inflection points join forces, KLA Corporation (KLAC.US) revenue grows for ten consecutive quarters, Q2 guidance beats expectations. The earnings report showed the company's quarterly revenue was $4.136 billion, up 28.9% year-over-year, above the market expectation of $4.04 billion revenue has now grown year-over-year for 10 consecutive quarters; non-GAAP diluted earnings per share were $1.22, above the expected $1.18. Guidance was the biggest highlight of this earnings report: the company expects December-quarter revenue of $4.7 billion $200 million, with the midpoint about 4.8% above the market consensus, implying year-over-year growth of about 42.5%; non-GAAP diluted earnings per share guidance of $1.44 $0.11, also above expectations. The midpoint of the guidance implies about 14% quarter-over-quarter revenue growth from this quarter, showing the company has strong confidence in the sustainability of AI-driven demand. As of press time, KLA Corporation was up nearly 4% in Thursday's U.S. pre-market. ServiceNow (NOW.US) Q3 net income fell nearly 45% year-over-year to $277 million. Data showed the company's quarterly revenue reached $4.106 billion, up 20.5% year-over-year, or 20% at constant currency; GAAP net income was $277 million, down about 45% from $502 million a year earlier; GAAP diluted earnings per share were $0.27, below $0.48 a year earlier. As ServiceNow's main revenue source, subscription revenue in the third quarter reached $3.988 billion, up 21% year-over-year, or 20.5% at constant currency. Professional services and other revenue was $118 million, up 10% year-over-year. As of the end of September, the company's current remaining performance obligations (cRPO) reached $13.65 billion, up 20.5% year-over-year; total remaining performance obligations (RPO) reached $29.7 billion, up 22% year-over-year. The AI business became an important highlight of ServiceNow's quarterly report. The company announced it would further raise its 2026 AI annual contract value (ACV) target to $1.7 billion, 70% above the $1 billion target set at the beginning of the year. This is also the second time ServiceNow has raised this target this year. As of press time, ServiceNow was down more than 19% in Thursday's U.S. pre-market. Fortinet, Inc. (FTNT.US) Q3 results beat expectations, yet the stock plunged in pre-market. The earnings report showed Fortinet's third-quarter total revenue was $2.08 billion, up 20% year-over-year, exceeding the market expectation of $2.06 billion; billings, which reflect backlog, reached $2.34 billion, up 29% year-over-year. It is worth noting that revenue growth of 20% year-over-year, while not low in absolute terms, showed signs of slowing compared with previous quarters. Non-GAAP diluted earnings per share were $0.91, above the market expectation of $0.86. Cash flow was another highlight of the earnings report. Third-quarter operating cash flow reached $946 million, free cash flow was $865 million, and the free cash flow margin was as high as 41.6%. The company raised its 2026 revenue guidance to $8.125 billion to $8.215 billion, raised its billings guidance to $9.568 billion to $9.718 billion, and expects non-GAAP diluted earnings per share of $3.54 to $3.58. This is the company's third increase to its billings guidance this year, highlighting management's confidence in the sustainability of demand. However, as the stock price had run ahead of valuations, and amid slowing revenue growth and weaker-than-expected performance in the services segment, Fortinet, Inc. was down nearly 26% in Thursday's U.S. pre-market as of press time. STMicroelectronics NV ADR RegS (STM.US) Q3 results were mixed with guidance above expectations, as AI and satellite communications demand support growth. Data showed the company's third-quarter revenue was $3.76 billion, up 17.9% year-over-year, exceeding market expectations; non-GAAP earnings per share were $0.37, slightly below market expectations. Looking ahead, the company expects fourth-quarter revenue with a midpoint of $4.15 billion, up about 10.5% quarter-over-quarter, above the market expectation of $4.12 billion; gross margin is expected to be 39.0%, versus the market's prior expectation of 38.2%. STMicroelectronics NV ADR RegS's customers include Apple Inc. and Tesla, Inc. Chief Executive Officer Jean-Marc Chery said in July this year that fourth-quarter revenue would accelerate, driven by demand for AI data centers and low-earth-orbit satellite communications. However, investors remain cautious on the semiconductor sector, worried about the sustainability of AI infrastructure spending and competition from Chinese chipmakers. FedEx Corporation (FDX.US) delivers first report card after freight spinoff: revenue and profit both beat expectations, full-year guidance raised. The earnings report showed FedEx Corporation's third quarter revenue was $22.9 billion, up about 12% from $20.4 billion a year earlier, above the market expectation of $22.42 billion. On profitability, adjusted operating profit was $1.2 billion, adjusted operating margin was 5.3%; adjusted earnings per share were $3.74, up about 28% from $2.93 a year earlier, better than the market expectation of $3.36. The company's net income for the quarter was $290 million, below $650 million a year earlier. The sharp fluctuation in net income was mainly affected by one-time items, including losses related to short-term investments, gains on debt extinguishment, and some restructuring costs. Based on the strong quarterly performance, FedEx Corporation raised its calendar 2026 adjusted earnings per share forecast to $18 to $18.60 from the previous $16.90 to $18.10; it also raised its 2026 revenue growth forecast to about 12% year-over-year from the previous 11%. Commodity cost headwinds intensify to $2.5 billion, Ford Motor Company (F.US) Q3 core profit still edges up 4% against the trend, lower end of full-year guidance raised. The earnings report showed the company's quarterly revenue was $49.5 billion, down 2% year-over-year; adjusted earnings per share were $0.49, up 9% year-over-year, above the market consensus of $0.40. The core profit metric edged up against the trend: adjusted EBIT was $2.7 billion, up 4% year-over-year, and adjusted EBIT margin was 5.4%, up 0.3 percentage points year-over-year; however, automotive segment revenue for the quarter was $46.08 billion, slightly below the expected $46.24 billion. Cost control and strong demand for pickups and SUVs are helping Ford withstand pressure from inflation and the Iran war. The company raised the lower end of its full-year adjusted EBIT guidance to $10.5 billion to $11 billion from $10 billion, and raised its full-year commodity cost headwind estimate to nearly $2.5 billion from about $2 billion, with pressure coming from higher copper and steel prices, diesel prices pushing up freight costs, and higher chip prices. Adjusted free cash flow guidance was maintained at $6 billion to $7 billion. TotalEnergies (TTE.US) Q3 profit doubled to $9.1 billion, refining margins surged to a record high. TotalEnergies' Q3 results showed that, benefiting from reduced global refined product supply after the U.S. and Israel war with Iran, Q3 adjusted net income was $9.1 billion, the highest level since the first quarter of 2022, up 127% year-over-year and 51% quarter-over-quarter, above the $8.3 billion consensus of 12 analysts compiled by LSEG. IFRS net income was $8.26 billion, more than doubling year-over-year and a single-quarter record. The downstream business was a major highlight of the quarter, driven by the European refining margin benchmark rising to $33.2 per barrel (2.5 times quarter-over-quarter) and refinery throughput increasing nearly 10%, downstream adjusted net operating income reached $4.07 billion, up 77% quarter-over-quarter, a single-quarter record. TotalEnergies reiterated its $25 billion share buyback plan for the fourth quarter and said it would repurchase another $25 billion in the first quarter of 2027, at the high end of the guidance range given last month. As of press time, TotalEnergies was up more than 2% in Thursday's U.S. pre-market. Shell (SHEL.US) Q3 profit beat expectations to a second-highest ever, quarterly buyback increased to $5 billion. The earnings report showed Shell's Q3 non-GAAP adjusted net income was $10.814 billion, up 99% year-over-year, above analysts' forecast of about $10.33 billion. This was the company's highest single-quarter profit since the first few months after the full-scale Russia-Ukraine war began in early 2022, and its second-highest quarterly profit in history. The surge in profit this period was directly attributable to GEO Group Inc: the Iran war and the Russia-Ukraine conflict temporarily shut down a considerable portion of global fuel production capacity, so refineries still operating enjoyed excess profits the supply gap in refined products such as diesel and gasoline translated into windfall gains for those left standing. Along with profit, shareholder returns were also raised: the fourth-quarter share buyback was sharply increased to $5 billion from $3 billion with the two wars pushing refining margins to historic highs and the downstream business posting its strongest quarter ever, management chose to accelerate returning this windfall to shareholders. As of press time, Shell was up more than 3% in Thursday's U.S. pre-market. New drug portfolio gains traction, Bristol Myers Squibb (BMY.US) Q3 results beat expectations. Thanks to continued volume growth of "Growth Portfolio" products, the company's Q3 results beat expectations and it raised full-year revenue guidance. Data showed Bristol Myers Squibb's third-quarter total revenue was $13.069 billion, up 7% year-over-year, better than market expectations. Of this, U.S. market revenue was $9.074 billion, up 9% year-over-year; international market revenue was $3.995 billion, up 3% year-over-year. By product portfolio, "Growth Portfolio" revenue was $7.662 billion, up 12% year-over-year, mainly driven by products such as Opdivo Qvantig, Breyanzi, Reblozyl, Camzyos, and Opdualag. Non-GAAP diluted earnings per share were $1.35, below $1.63 a year earlier, but still better than market expectations. Bristol Myers Squibb raised its full-year 2026 revenue guidance to approximately $49.75 billion to $50.25 billion from the previous approximately $49 billion to $50 billion, mainly reflecting broad continued growth momentum across the product portfolio. Eli Lilly (LLY.US) Q3 results beat expectations, full-year revenue guidance raised to $91 billion to $92 billion. The earnings report showed Eli Lilly Q3 revenue was $24.397 billion, up 39% year-over-year, above LSEG's expectation of about $22.6 billion, with volume growth of 53% and realized prices down 15%. Non-GAAP earnings per share were $7.48, up 7% year-over-year, above LSEG/IBES expectations of $6.49. The two core products continued to grow volume: Mounjaro global revenue was $10.723 billion, up 65% year-over-year, and Zepbound was $5.352 billion, up 49%; KeyProducts totaled $17.1 billion, with revenue in immunology, oncology, and neuroscience doubling year-over-year. On guidance, full-year revenue guidance was raised to $91 billion to $92 billion from $85 billion to $87 billion, and the performance margin was raised to 52.0% to 52.5% from 49.0% to 50.5%; however, underlying earnings improvement was offset by acquired R&D expenses, and full-year adjusted earnings per share guidance was lowered to $35.00 to $36.00 from $35.50 to $36.50. As of press time, Eli Lilly was up more than 4% in Thursday's U.S. pre-market. Merck & Co., Inc. (MRK.US) Q3 results beat expectations: Keytruda and Gardasil performed well, full-year guidance raised. The earnings report showed Merck & Co., Inc. Q3 total revenue was $18.085 billion, up 5% year-over-year (4% excluding currency effects), above the average analyst expectation of $17.31 billion compiled by LSEG; adjusted earnings per share were $2.49, far exceeding the expected $2.08. The company also raised full-year guidance the same day: the low end of the 2026 revenue range was lifted to $66.8 billion from $66.3 billion, and full-year adjusted earnings per share guidance was raised to $2.77 to $2.82 from $2.66 to $2.76. But this "beat" contains an element of that the company itself pointed out: of the quarter's pharmaceutical sales growth, about $550 million came from procurement timing that is, customers stocking up early. Based on official data, the quarter's total revenue increased by about $809 million year-over-year, of which about 70% was not new demand but demand pulled forward. Carter's Incorporated Caterpillar (CAT.US) Q3 results beat expectations, yet the stock fell sharply in pre-market. Driven by volume growth and price realization, Carter's Incorporated Caterpillar Q3 sales and revenue were $20.68 billion, up 17% year-over-year; adjusted earnings per share were $7.20, above the market expectation of about $7.03. All three major segments grew. Power & Energy segment sales were $8.78 billion, up 18% year-over-year; Construction Industries sales were $7.98 billion, up 18% year-over-year; Resource Industries sales were $4.62 billion, up 15% year-over-year. The company said its backlog hit another record but did not disclose the specific amount, nor did it provide quantitative full-year guidance in the press release. As of press time, Carter's Incorporated Caterpillar was down more than 9% in Thursday's U.S. pre-market. Lloyds (LYG.US) Q3 pre-tax profit beat expectations, impairment charges surged 78% year-over-year. Lloyds' third-quarter profit beat market expectations, mainly thanks to growth in net interest income and fee income, and the bank maintained its full-year performance guidance. Data showed that in the three months ended September 30, Lloyds' net interest income was GBP3.8 billion (about $5.1 billion), up 10% year-over-year, in line with expectations; pre-tax profit for the quarter was GBP2.33 billion, above the average analyst expectation of GBP2.29 billion. Chief Executive Charlie Nunn said in a statement that the bank has "continued to grow revenue, continuously improve operating leverage, and maintain strong and stable credit performance." Underlying impairment charges for the quarter rose to GBP313 million, up 78% year-over-year, reflecting "deteriorating economic prospects" and the impact of rising interest rates. Volume and price both rise, Linde plc gas (LIN.US) Q3 results beat expectations. Thanks to volume growth and pricing improvement across regions, Linde plc gas Q3 sales and adjusted earnings both beat expectations. Data showed the company's third-quarter sales were $9.404 billion, up 9% year-over-year, exceeding analysts' expectation of $9.14 billion. Underlying sales grew 5% year-over-year, mainly driven by a 3% price increase and 2% volume growth, with growth concentrated in electronics, chemicals and energy, and manufacturing end markets. Adjusted net income was $2.122 billion, up 7% year-over-year; adjusted diluted EPS was $4.59, up 9% year-over-year, exceeding analysts' expectation of $4.52. Important Economic Data and Event Preview Beijing time 20:30 U.S. September personal spending month-over-month Beijing time 20:30 U.S. September PCE price index Beijing time 20:30 U.S. Q3 real GDP annualized quarter-over-quarter preliminary reading Earnings Preview Friday morning: Amazon.com, Inc. (AMZN.US), Intel Corporation (INTC.US), SanDisk (SNDK.US), Starbucks Corporation (SBUX.US), Gilead Sciences, Inc. (GILD.US), Coinbase (COIN.US), Pinterest (PINS.US), Roblox (RBLX.US), Vale S.A. Sponsored ADR (VALE.US) Friday pre-market: BP p.l.c. Sponsored ADR (BP.US), Exxon Mobil Corporation (XOM.US), Chevron Corporation (CVX.US), AbbVie (ABBV.US), Regeneron Pharmaceuticals, Inc. (REGN.US)