Stocks Rally Falters With Earnings Season in Focus: Markets Wrap
(Bloomberg) — US equity futures drifted as traders looked to the upcoming earnings season for validation of the artificial intelligence frenzy that has powered a record rally.
Futures on the S&P 500 were little changed after the gauge hit another record on Wednesday. Nvidia Corp. gained in premarket trading after the US approved approved several billion dollars worth of its chip exports to the United Arab Emirates. Shares of other Magnificent Seven tech giants were mixed.
The Stoxx Europe 600 index retreated from a record. Banks were a drag on the gauge as Lloyds Banking Group Plc fell after warning it may have to set aside an additional provision for disputed car loans. HSBC Holdings Plc plunged on plans to take one of its banking units private.
Oil was steady after Brent crude climbed more than 1% on Wednesday, as traders focused on cooling tensions in the Middle East. Gold held near a record high above $4,000.
Stocks around the world have soared to records as traders looked past worries of a potential bubble in high-profile tech names and instead focused on corporate resilience and the restart of Federal Reserve interest-rate cuts. The optimism that’s powered equities since their April slump now faces a key test as earnings season looms.
“Given how lopsided the expectations have become, given how lofty the valuations have become, I think investors are laser focused on earnings,” Aidan Yao, a strategist at Amundi Investment Institute, said on Bloomberg TV. “They are trying to see if earnings are really catching up into the valuations.”
PepsiCo Inc. and Delta Air Lines Inc. are among companies kicking off the US third-quarter reporting period on Thursday, with Wall Street lenders including Goldman Sachs Group Inc. and Citigroup Inc. due next week. Tesla Inc. is the first of the Magnificent Seven set to report on Oct. 22, followed by Alphabet Inc., Microsoft Corp. and Meta Platforms Inc. on October 29.
For David Kruk, the Paris-based head of trading at La Financiere de l’Echiquier, any pullback in stocks would be an opportunity to buy the dip.
“On fundamentals, we’re in a Goldilocks scenario: growth is resilient, inflation is no longer worrisome and earnings are in a positive trend,” Kruk said. “It’s understandable to have doubts about the rally, but I don’t see any concrete reason to sell.”
Meanwhile, minutes of the Fed’s last policy meeting showed that officials broadly supported September’s quarter-point rate cut, though a few stated there was merit in keeping rates unchanged. That leaves expectations for another reduction later this month unchanged as the government shutdown saps confidence and economic activity, according to Bloomberg Economics. Treasury yields edged higher and a gauge of the dollar was flat.
Elsewhere, Asian shares climbed 0.4%, led by tech firms such as SoftBank Group Corp. HSBC Holdings Plc slumped, while shares in mainland China jumped 1.6% as they reopened after the Golden Week break. The yen edged up after touching its weakest level against the dollar since February, raising speculation about official intervention.
In geopolitical news, President Donald Trump said Israel and Hamas have signed off on the first phase of a peace plan. A ceasefire in Gaza has gone into effect, Israel Deputy Foreign Affairs Minister Sharren Haskel said in an interview with Bloomberg TV Thursday. If the agreement holds, it would mark a major step toward ending the conflict that erupted after Hamas attacked Israel on Oct. 7, 2023 and threw the Middle East region into crisis.
In Europe, French President Emmanuel Macron said he’ll name a new prime minister by Friday evening, having for the time being avoided the need to call a snap election that would have deepened the political chaos in France. France’s CAC 40 stock index gained for a third day.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 6:01 a.m. New York time Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 fell 0.2% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1626 The British pound fell 0.1% to $1.3388 The Japanese yen rose 0.1% to 152.51 per dollar Cryptocurrencies
Bitcoin fell 0.9% to $121,824.58 Ether fell 3.8% to $4,333.03 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.13% Germany’s 10-year yield advanced one basis point to 2.69% Britain’s 10-year yield advanced one basis point to 4.72% Commodities
West Texas Intermediate crude fell 0.4% to $62.33 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy.
©2025 Bloomberg L.P.
