Pre-market market movements
1. On Thursday, October 22, prior to the U.S. stock market open, all three major U.S. stock index futures declined. As of reporting, the Dow Jones futures fell 0.57%, the S&P 500 futures dropped 0.94%, and the Nasdaq futures slid 1.60%.
As of press time, Germany's DAX index fell 0.71%, France's CAC 40 index dropped 0.29%, the UK's FTSE 100 index declined 1.11%, and the Euro Stoxx 50 index fell 1.37%.
As of press time, WTI crude oil rose 2.34% to $99.42 per barrel, while Brent crude oil increased 2.85% to $111.92 per barrel.
Market news
Trump denied engaging in negotiations with Iran, stating that the situation will be resolved "soon." He said that, regarding Iran, the United States holds a "very favorable" position both militarily and economically; he described the current situation as "a minor conflict with Iran." When asked by reporters whether negotiations with Iran had been abandoned, Trump replied, "No, I don't think we are currently negotiating. Either way, there will always be a resolution, and it will come soon." He added, "Many people seem to think it won't happen until after the election—let's wait and see."
France’s 10-year government bond yield rose for the first time in 13 years to surpass that of U.S. Treasuries. The French 10-year yield increased by 8 basis points today, exceeding the U.S. Treasury yield for the first time since 2013, reflecting growing investor concerns over France’s deteriorating fiscal position and rising debt burden. On Thursday, the U.S. 10-year Treasury yield stood at 5.08%. Increased market volatility prompted investors to re-buys U.S. Treasuries, pushing U.S. yields lower.
After a critical vulnerability in PHP was disclosed, attacks surged, with Cloudflare (NET.US) monitoring millions of attempts. Matthew Prince, CEO of cloud services company Cloudflare, wrote that the company detected millions of exploitation attempts after a severe vulnerability in the widely used programming language PHP was revealed. Prince stated: “Within the 10 hours before the vulnerability was publicly disclosed, we observed thousands of exploitation attempts across the network. Within 45 minutes after the disclosure, this number rose to tens of thousands; within two hours, it reached hundreds of thousands, and it has now climbed to millions.” Following the disclosure of the PHP vulnerability on Wednesday, website operators worldwide urgently took measures to secure their systems, causing some government websites in Europe and other regions to go offline.
The world’s largest sovereign wealth fund lost $30 billion due to bond market volatility. On Thursday, Norway’s Sovereign Wealth Fund, the largest sovereign wealth fund globally, reported a $30 billion loss in its portfolio for the third quarter, driven by lower returns on its bond holdings amid rising interest rates. The fund manages assets totaling $2.3 trillion. Its fixed-income investments returned -3.5%, with fund managers citing this as one of the primary reasons for the overall decline in performance.
JPMorgan: The stock market plunge may be nearing its end. JPMorgan Global Market Strategist Nikolaos
Panigirtzoglou and his team believe that the recent decline in the semiconductor sector indicates that most long positions have been unwound, including those held by momentum investors. Although short-term headwinds remain, this adjustment in positioning may have already limited further downside potential in the market. The J.P. Morgan team also discussed another recent concern for markets: financing risks for new cloud companies. J.P. Morgan acknowledges that financing does pose some challenges, but given the extremely high demand for computing resources, these companies may be able to pass on increased financing costs to end customers. Even if financing becomes unviable, he does not believe the timing mismatch between capital expenditures and revenue will derail the industry’s growth cycle.
Anthropic has launched the 24/7 AI agent Claude Duet. On Wednesday, Anthropic announced the release of a product called Claude
Duet’s new app, positioned as an “active agent,” can run continuously in the background, proactively reminding users of tasks and handling various work responsibilities. Currently, Claude
Duet is still in research preview mode, and users must join a waitlist to gain access. This means the product is currently unable to directly compete in the broader market with agent-based products like Meta’s newly launched Muse and OpenAI’s Dots. Anthropic states that Duet is built on its flagship model, Opus.
5.5 Development.
Individual stock news
Major tech stocks declined pre-market. According to pre-market summaries, IBM (IBM.US) fell over 5%, Applied Materials (AMAT.US) dropped over 4%, and Marvell Technology (MRVL.US) slid nearly 2%; Micron Technology (MU.US), SanDisk (SNDK.US), SK Hynix (SKHY.US), and Intel (INTC.US) each fell around 4%; NVIDIA (NVDA.US) declined over 2%. Meta (META), which had risen over 7% earlier on Q3 earnings, turned down about 2% pre-market.
Meta reported Q3 earnings after hours: Revenue exceeded expectations, with increased capital spending to bet on AI. The company’s third-quarter revenue reached $64.6 billion, a 26% year-over-year increase, surpassing analysts’ expectations of $63.3 billion, driven primarily by advertising. Diluted earnings per share came in at $3.83, below market expectations, due to a one-time legal settlement cost of $9.89 billion; excluding this one-time expense, EPS would have been $7.40. The company also raised its guidance, expecting fourth-quarter revenue to range between $73 billion and $76 billion, with the midpoint above market expectations. Additionally, Meta raised the lower end of its 2026 capital expenditure guidance from $130 billion to $135 billion, while maintaining the upper limit at $145 billion, further increasing investment in AI computing power and data centers.
Tesla (TSLA.US) reported mixed results after hours: revenue slightly below expectations, with a significant reduction in capital expenditures. The company’s third-quarter revenue came in at $28.05 billion, slightly below the analyst consensus of $28.13 billion; adjusted EPS was $0.48, exceeding the expected $0.44; and free cash flow for the quarter reached $1.53 billion, significantly better than the nearly $5 billion shortfall many had feared. However, the key focus for investors was capital expenditures: Tesla lowered its full-year 2026 capital spending target from “over $25 billion” to approximately $20 billion—a reduction of about 20%—and actual Q3 capex of $4.73 billion was far below the market expectation of $7.95 billion. The CFO described this as “efficient capital allocation,” but investors are concerned that reduced spending may slow progress on long-term initiatives such as AI, humanoid robots, and autonomous taxis.
Amid concerns over an AI bubble, Texas Instruments (TXN.US) delivers a solid performance: Q3 revenue and profits both exceed expectations, with Q4 guidance surprisingly strong. Analog chip manufacturer Texas Instruments reported third-quarter fiscal year 2026 results, with revenue of $6.06 billion, surpassing analyst expectations of $5.90 billion and up 27.7% year-over-year, exceeding estimates by 2.6%. GAAP earnings per share came in at $2.62, 8% higher than the analyst consensus of $2.43. Additionally, the company’s revenue guidance for the next quarter (midpoint of $6.05 billion) came in unexpectedly strong, exceeding analyst expectations by 5.6%.
P&G (PG.US) Q1 earnings surpass expectations across the board: organic sales growth of 4%, with volume recovery reversing the growth structure. P&G reported its first-quarter financial results for fiscal year 2027, showing net sales of $23.3 billion.
$2.3 billion, a 4% year-over-year increase, above the expected $2.28 billion; core EPS of $2.00, a 1% year-over-year increase, above the expected $1.89. The company previously guided for core EPS this quarter
Declined by 5% or more year-over-year, but actually increased. Organic sales growth, the market’s primary focus, reached 4%, significantly surpassing the consensus expectation of approximately 2% (even the most optimistic forecasts from UBS and Evercore ISI were only around 2%).
2.6%–3%.
American Airlines (AAL.US) reported record Q3 revenue of $16.3 billion, but a 67% surge in fuel costs became the biggest drag, with the company forecasting a net loss for the full year. On October 22, American Airlines released its third-quarter financial results for fiscal year 2026 (ended September 30). The report showed total revenue of $16.34 billion, a 19.3% year-over-year increase, marking the highest level in the company’s history excluding post-pandemic years and exceeding the upper end of prior guidance. Despite this, the airline now expects to incur a loss in 2026, withdrawing its previous range of possible breakeven or profit forecasts, as persistently high fuel prices have risen more than ticket prices, continuing to squeeze profit margins.
Several major U.S. banks have discovered unauthorized AI agents accessing accounts. Sources reveal that multiple large U.S. banks are detecting third-party AI agents operating within customer accounts, with some agents attempting to execute actions seemingly independent of user instructions. Unable to reliably distinguish between human users and unauthorized bots, banks have been forced to block the technology and rapidly update their terms of service. Banks including Morgan Stanley (MS.US), Bank of America (BAC.US), JPMorgan Chase (JPM.US), and Wells Fargo (WFC.US) are urgently working to mitigate agent-related risks. Officials indicate that some banks have already identified instances of unauthorized access. According to insiders, Morgan Stanley has begun blocking third-party agents from accessing its platform. JPMorgan Chase, Bank of America, and Citigroup (C.US) are also restricting agent access.
It is reported that SpaceX (SPCX.US) and Tesla (TSLA.US) are aiming to finalize a merger deal in the first half of next year. According to sources familiar with the matter, efforts are underway to announce the merger of Tesla and SpaceX in the first half of 2027, so that the transaction can be completed during Trump’s current term in office. The U.S. midterm elections will take place in less than two weeks. If the Democrats gain control of either chamber of Congress, Musk and his companies could face investigations, potentially diminishing the influence of a president increasingly entering a lame-duck phase. Meanwhile, if chip and artificial intelligence stocks continue to be sold off, investor support may weaken, jeopardizing the progress of this ambitious deal.
Meta’s personal AI agent, Muse, has surpassed 10 million users in its first month. Meta CEO Mark Zuckerberg stated on Wednesday that since its launch in September, Muse, Meta’s new personal AI agent app, has attracted over 10 million users. During Meta’s third-quarter earnings call, Zuckerberg said Muse’s growth momentum “remains strong,” with shopping being the most common use case. He noted that more than a quarter of Muse users make purchases through the app, with an average transaction value exceeding $200.
Important Economic Data and Event Calendar
8:30 PM Beijing Time: U.S. Initial Jobless Claims for the week ending October 17
22:00 Beijing Time: Preliminary Eurozone Consumer Confidence Index for October
Earnings Forecast
Friday morning: Western Digital (WDC.US), Bloom Energy (BE.US)
Pre-market on Friday: American Express (AXP.US), Schlumberger (SLB.US)