Tech Giants Fuel Wall Street’s Cautious Comeback: Markets Wrap
(Bloomberg) — A resurgence in tech shares spurred a rebound in stocks, though the advance was limited by concerns over the Federal Reserve’s ability to slash interest rates in December. Bonds fell.
The relief brought by the end of the US shutdown quickly gave way to volatility this week as a host of Fed speakers threw cold water on bets for further policy easing. Hot areas favored by momentum traders such as artificial-intelligence and Bitcoin whipsawed. While the S&P 500 erased a 1.4% slide, most of its shares fell. Nvidia Corp. rallied ahead of its earnings.
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The outlook for lower rates favoring Corporate America alongside booming AI prospects have powered a torrid surge since the April meltdown, making many traders look past high valuations to keep chasing the market higher.
Earnings for most big tech companies have been in line or above expectations, though the outlook has been murky when it comes to where borrowing costs are headed. As Nvidia gets ready to report Wednesday, options traders are pricing in a 6.2% stock swing in either direction – its highest implied move in a year.
“Its earnings will be a huge test for the markets and the AI-trade, and could either ease fears about AI valuations or inflame them considerably,” said Kyle Rodda at Capital.com.
Also next week, big box retailers like Walmart Inc. and Target Corp. will report their results, offering a read on the state of consumer spending – the main engine of the American economy.
The S&P 500 rose to 6,760 after briefly falling below its 50-day moving average. A gauge of tech megacaps climbed almost 1%, following a three-day rout.
The yield on 10-year Treasuries climbed two basis points to 4.14%. The dollar wavered. Bitcoin almost erased this year’s gain. UK markets got hit as speculation about the budget heightened uncertainty over the nation’s finances. Oil climbed as geopolitical risks mount from Russia to Iran.
A slew of Fed officials have in recent days expressed skepticism over the need for another cut in December, or outright opposed one. It remains unclear whether they can persuade enough voting members of the Federal Open Market Committee, given that a number of policymakers are still more worried about job weakness.
Financial markets have taken note of the volume of comments coming recently from the Fed’s so-called inflation hawks. Investors have marked down the odds of a rate cut in December to less than 50%, based on federal funds futures contracts. Before the Fed’s October meeting, they were almost fully pricing in a reduction.
Their remarks came less than a month after Chair Jerome Powell warned that a December cut is far from a “foregone conclusion.”
“The tough but business-as-usual wrestling match over a December rate cut risks morphing into a crisis of governance at the Fed, with implications that extend well beyond whether it does or does not cut then,” said Krishna Guha at Evercore. “Absent miraculous clarification from limited data, Powell is in a rough spot. We urge cool heads and compromise.”
Guha says that he still leans toward a “hawkish cut,” but the odds have diminished.
“Our expectation for a soft October employment report and under-control October core CPI inflation should settle the internal debate at the FOMC in favor of an additional 25 basis-point rate cut. With that said, the decision is likely to be contentious, with a high possibility of additional hawkish dissents,” said Gennadiy Goldberg at TD Securities.
Corporate Highlights:
Walmart Inc. Chief Executive Officer Doug McMillon, who over a decade ushered the big-box behemoth into the Internet age, will retire in February. He’ll be replaced by US head John Furner — long viewed as the heir apparent. Warner Bros. Discovery Inc. amended the contract of Chief Executive Officer David Zaslav to ensure his stock options remain eligible to vest even if the media company is sold. Merck & Co. agreed to acquire Cidara Therapeutics Inc., a biotech company developing a flu treatment, as part of its ongoing efforts to make up for the upcoming patent loss of its blockbuster cancer drug Keytruda. Bristol Myers Squibb Co. fell after one of its most important experimental medicines appeared unlikely to benefit patients who had suffered a heart complication, another setback for the drugmaker’s product pipeline. Google has offered to tweak its ad tech products to settle a European Union order after a near-€3 billion ($3.4 billion) antitrust penalty, stopping short of a partial breakup watchdogs favor. Boeing Co. stands to win most of a major order from Flydubai for single-aisle aircraft, though Airbus SE still has a long-shot chance to pry some business from an airline that’s never ordered from the European planemaker. Emirates is planning to use SpaceX’s Starlink to upgrade the onboard Wi-Fi in its fleet, according to people familiar with the matter, even though the service isn’t currently approved by the government. BlackRock Inc. has agreed to pay up to €2 billion ($2.33 billion) to form a data center venture with Spanish engineering firm ACS SA. American Tower Corp. and European buyout firm EQT AB are among parties weighing bids for French tower company TDF Infrastructure, people with knowledge of the matter said. A group of First Brands Group creditors is demanding new, independent advisers for company units that issued nearly $2.5 billion in off-balance-sheet debt, claiming conflicts of interest threaten to disrupt the sprawling insolvency case of auto-parts maker. JBS NV, the world’s largest meat supplier, reported a quarterly operating loss at its US beef business as a shortage of cattle continues to hit margins at the unit. BHP Group Ltd. is liable to compensate hundreds of thousands of victims of a devastating dam collapse in Brazil, a London judge ruled, moving closer to a potential multi-billion dollar payout a decade after the disaster. Nu Holdings Ltd. said artificial intelligence features it started to deploy in Brazil helped the fintech increase credit-card limits for some clients, boosting third-quarter revenue and profit. Sigma Lithium Corp. stocks rose as investors focused on the company’s forecast to resume mining operations by the end of the month, despite another quarter of cash burn, lower sales and production volumes. Allianz SE, the German insurer that owns bond manager Pacific Investment Management Co., raised its outlook for full-year profit after third-quarter earnings rose, driven by its property-casualty insurance and asset management businesses. Siemens Energy AG substantially raised its mid-term financial targets on strong demand for gas turbines and data center equipment as well as restructuring progress at its Gamesa wind turbine unit. Richemont sales climbed as shoppers from the US to China snapped up the luxury group’s pricey Cartier and Van Cleef & Arpels jewelry. Jaguar Land Rover Automotive Plc swung to a £559 million ($735 million) quarterly loss and slashed its guidance after a cyberattack temporarily halted production at the UK’s largest automaker. Japan’s biggest banks raised their annual earnings targets to fresh records and announced plans to buy back shares, as trade fears subside and rising interest rates boost lending profitability. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.4% as of 12:30 p.m. New York time The Nasdaq 100 rose 0.6% The Dow Jones Industrial Average fell 0.3% The MSCI World Index was little changed Bloomberg Magnificent 7 Total Return Index rose 0.7% The Russell 2000 Index rose 0.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.2% to $1.1613 The British pound fell 0.3% to $1.3158 The Japanese yen was little changed at 154.68 per dollar Cryptocurrencies
Bitcoin fell 2.2% to $96,608.79 Ether rose 1.1% to $3,214.35 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.14% Germany’s 10-year yield advanced three basis points to 2.72% Britain’s 10-year yield advanced 14 basis points to 4.57% The yield on 2-year Treasuries advanced two basis points to 3.61% The yield on 30-year Treasuries advanced three basis points to 4.74% Commodities
West Texas Intermediate crude rose 2.5% to $60.18 a barrel Spot gold fell 1.8% to $4,095.76 an ounce ©2025 Bloomberg L.P.
