Big Tech Fuels Stock Rebound as Amazon Jumps 12%: Markets Wrap
(Bloomberg) — The S&P 500 is poised to extend its winning run to a sixth month after Amazon.com Inc.’s blowout results fueled a rebound in stocks following a brief pause in the global rally.
Futures on the US benchmark rose as Amazon jumped 12% in premarket trading, a move set to add nearly $300 billion to its market value after reporting the fastest cloud-unit growth in nearly three years. Apple Inc. also climbed on a revenue beat and upbeat holiday forecast. Nasdaq 100 contracts advanced 1.5%.
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Nvidia Corp., meanwhile, unveiled new partnerships with South Korea’s biggest firms, extending a global push to expand artificial intelligence infrastructure. The wave of earnings and announcements lifted all members of the Magnificent Seven tech giants, after a selloff in the previous session.
In Europe, the Stoxx 600 fell for a fourth day, putting the gauge on track for its longest losing streak since July. Asia’s benchmark also pared its monthly advance. US Treasuries steadied after two sessions of sharply higher yields, while the dollar was little changed.
US stock gains offered investors a respite from Thursday’s bruising session, amid lingering doubts over whether heavy AI spending will pay off. The S&P 500’s advance has increasingly relied on tech megacaps, with warnings over lofty valuations following a blistering rally.
“Volatility has become a feature rather than a bug — day-to-day swings now regularly move major stocks by hundreds of billions of dollars,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “The feedback loop of investor sentiment, speculative positioning, and rapid news-driven reactions amplify these moves.”
Gains in the S&P 500 on Friday will seal the index’s longest monthly winning streak since August 2021, capping a rally that has withstood global trade tensions and geopolitical risks. Earnings have also broadly topped forecasts, with about 80% of S&P 500 companies that have reported so far beating expectations.
Global equities drew $17.2 billion in inflows in the week to Oct. 29, Bank of America Corp. said, citing EPFR data. Strategists led by Michael Hartnett added that AI’s leadership remains firmly in place.
“The risks are mainly flows. They have been the main driver, much more than EPS growth,” said Karen Georges, an equity fund manager at Ecofi. “If flows begin to halt on risky assets, then there will be a genuine selloff. But it’s like a black swan, you never know when it’s coming.”
On the trade front, Treasury Secretary Scott Bessent said he expects the US to return to the negotiating table with China in a year. That came after Donald Trump and Xi Jinping agreed to a tariff truce, roll back export controls and reduce other trade barriers. Xi also warned against “breaking supply chains” in his first public remarks after meeting with Trump.
“A comprehensive deal still looks far away and while trade tensions have eased for the time being, they have the potential to resurface,” said Mohit Kumar, chief economist and strategist at Jefferies International.
What Bloomberg strategists say…
Bubble concerns seem to have been pushed back further by the latest set of earnings. The AI boom is alive and well and broadening out far beyond just the US. There’s been plenty of volatility across markets this week as Presidents Trump and Xi finally met, but the AI theme is where investors look for signals regarding global equities.
— Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.
Corporate News:
Exxon Mobil Corp. outperformed Wall Street expectations for a sixth consecutive quarter after beginning operations at its fourth oil-production project in Guyana. Chevron Corp. beat earnings estimates as profits from the $53 billion Hess Corp. acquisition were included in the results for the first time, boosting oil production and cash flow. Nvidia Chief Executive Officer Jensen Huang still hopes to sell chips from the company’s Blackwell lineup to customers in China, though he has no current plans to do so, he told reporters Friday. AbbVie Inc.’s beauty business weakened again last quarter, underscoring ongoing struggles in its aesthetics division even as booming sales of new anti-inflammatory drugs fueled higher-than-expected revenue and a raised annual forecast. Netflix Inc. gained more than 2% in premarket trading. The company approved a 10-for-1 stock split to make its share price more accessible for employees who participate in the company’s stock option program. Separately, Reuters reported the company is exploring a bid for Warner Bros. Discovery’s studio and streaming businesses. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.9% as of 8:26 a.m. New York time Nasdaq 100 futures rose 1.5% Futures on the Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 fell 0.3% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1560 The British pound fell 0.3% to $1.3117 The Japanese yen was little changed at 154.14 per dollar Cryptocurrencies
Bitcoin rose 2.5% to $110,156.75 Ether rose 3% to $3,869.9 Bonds
The yield on 10-year Treasuries was little changed at 4.10% Germany’s 10-year yield was little changed at 2.64% Britain’s 10-year yield was little changed at 4.42% Commodities
West Texas Intermediate crude fell 0.2% to $60.45 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Subrat Patnaik.
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