Wall Street delivered a split result on Monday. The Nasdaq Composite climbed 1.1% and the S&P 500 added 0.4%, recovering part of the previous week’s technology led decline, while the Dow Jones Industrial Average slipped 0.1%. European shares ended lower amid political uncertainty in France, and Asian markets retreated broadly on Tuesday.
US markets close mixed as technology shares rebound
Technology shares rebounded and consumer discretionary was the strongest sector, while Treasury yields rose and oil markets were mixed. The sections below cover the session, the earnings picture and the moves in rates and commodities.
Technology rebounds but market breadth stays weak
Technology stocks regained ground, with Amazon advancing 5% and Nvidia, IBM and Alphabet also finishing higher. Consumer discretionary was the best performing sector with a gain of 2.7%, ahead of technology at 1.2%. Beneath the headline numbers, participation was thin. Most S&P 500 sectors closed in negative territory, with utilities the weakest.
Investor attention remains fixed on corporate earnings, particularly from the largest technology companies, following last week’s sell off driven by worries over the scale of spending needed to build out artificial intelligence infrastructure.
Third quarter earnings season starts on a positive note
Of the S&P 500 companies that have reported so far, roughly 85% have beaten analysts’ earnings forecasts. Netflix publishes its results today, with Meta and Tesla following on Wednesday. Together, these reports should offer a clearer view of consumer demand, advertising trends and whether growth in the technology sector can be sustained.
Oppenheimer Asset Management reiterated its constructive outlook, forecasting the S&P 500 to reach 8,100 by year end.
Treasury yields climb and oil prices diverge
US Treasury yields rose, with the 10-year yield reaching 5.14% and the two-year yield at 4.77%. The move reflects continued sensitivity to inflation and monetary policy expectations.
Crude oil benchmarks moved in opposite directions. West Texas Intermediate gained 2.1% to $103.56 per barrel, while Brent eased 0.5% to $109.37. Inflation remains stubborn and oil prices are elevated, but resilient economic activity and encouraging corporate earnings continue to underpin the outlook for equities.
Global markets snapshot
Here is how Asian, US futures, European, currency and commodity markets are positioned, along with the latest developments in France.
Asian equities retreat on technology profit taking
Asian stock markets fell broadly on Tuesday. The MSCI Asia ex Japan index lost 0.93%, Japan’s Nikkei 225 dropped 1.28% and South Korea’s KOSPI slid 3.61%. Investors locked in gains on technology holdings and held back ahead of key corporate results, particularly from companies linked to artificial intelligence.
US futures edge higher ahead of a busy earnings week
US equity futures were marginally positive overnight. S&P 500 futures were up 0.2%, Nasdaq 100 futures gained 0.3% and Dow futures added 0.1%. Caution persists with a heavy earnings calendar ahead, and results from Meta and Tesla later this week will be watched closely for signals on technology sector performance and artificial intelligence investment.
European shares fall on civil unrest and fiscal concerns
European equities declined sharply on Monday. The Euro STOXX 50 fell 1% and the STOXX Europe 600 lost 0.9% as civil unrest and political uncertainty intensified in France and Italy. Higher sovereign bond yields added to worries about fiscal stability, and banks led the decline, with Deutsche Bank, BNP Paribas, Santander, UniCredit and Intesa Sanpaolo each falling more than 2%.
Dollar softens ahead of the Federal Reserve meeting
The US dollar eased against major currencies, with the dollar index dropping below 102 as markets weighed the Federal Reserve’s interest rate path ahead of next week’s policy meeting. The euro made a modest recovery despite the unrest in France, with EUR/USD currently trading at 1.2285, reflecting some short term softness in the dollar.
Oil holds close to five-month highs
Brent crude traded at $109.38 per barrel and WTI at $103.32, keeping prices near their highest levels in five months. Traders are assessing fresh risks to shipping through the Strait of Hormuz. Crude flows from the Persian Gulf have returned to roughly 80% of prewar levels, but Houthi attacks on Saudi energy facilities have raised fresh concerns about supply disruption.
France introduces curfews after weekend riots
French authorities imposed local curfews and restrictions on protests after a weekend of rioting and looting in several cities, with close to 3,000 shops reportedly affected. The unrest has increased pressure on President Macron’s government, amid concerns over security, a weak economy and the state of public finances.
Equities on the move
Analyst rating changes, quarterly results and company announcements drove notable share price moves. The key stories are grouped by theme below.
Competition intensifies among AI developers
Anthropic, Google and OpenAI are each preparing new AI models as rivalry sharpens around reasoning ability, specialised capabilities and pricing. Anthropic is focused on stronger reasoning and problem solving, Google is pushing ahead in visual AI and OpenAI is working on a model that is both cheaper and more capable. The direction of travel points to a growing industry emphasis on affordability and performance on specific tasks.
OpenAI is reportedly looking to raise $30 billion from investors including SoftBank and MGX, a round that could value the company at more than $1.4 trillion. The faster fundraising timeline is aimed at locking in commitments before Anthropic’s anticipated market debut in mid November, against a backdrop of volatile technology stocks, rising bond yields and mounting concern over the cost of funding AI infrastructure.
Labour and demand pressures in technology
Micron Technology is facing an escalating labour dispute in Taiwan. Its Taoyuan union plans to strike on Thursday in support of workers seeking better profit sharing. The action raises the risk of disruption at an important production site for DRAM and high bandwidth memory chips, both essential for AI servers, while talks with management continue.
Jefferies flagged softening demand for Apple’s iPhone 18 Pro models, pointing to shorter delivery times, lower resale prices and reported component order reductions of 10% to 15%. Sales growth in China has also slowed, partly because of discounted iPhone 17 stock. Further production cuts remain possible if demand continues to weaken.
AI infrastructure financing and factory automation
S&P Global cautioned that large technology companies may carry undisclosed liabilities tied to the financing of AI infrastructure, raising concerns over the scale of borrowing behind data centre expansion. The six largest US hyperscalers are projected to spend more than $7 trillion on AI related investment by 2030. For now, S&P sees no reason to adjust their credit ratings.
Siemens is targeting factory automation levels of 70% to 80%, up from 30% to 40%, using AI to lift productivity and competitiveness. Working with Nvidia, the company is building AI powered manufacturing solutions based on digital twins. Siemens plans to invest €500 million in its Erlangen plant by 2030 to showcase advanced manufacturing technologies.
Musk pledges SpaceX shares to American children
Elon Musk has pledged to give one SpaceX share to every child in the United States next year, which could amount to $10.5 billion worth of shares spread across roughly 72 million children. Details on eligibility and distribution remain unclear, including whether Trump Accounts would be used. The pledge equals about 1.5% of Musk’s reported SpaceX stake.
Analyst views and rating changes
Morgan Stanley strategist Michael Wilson believes the correction in US equities may be close to running its course, pointing to strong performance from quality stocks and a widening gap in earnings revisions. In comparable conditions, quality stocks have historically outperformed by an average of 7.5% over the following twelve months. Wilson sees the pullback as a mid cycle transition rather than a threat to economic growth.
Morgan Stanley also named Amazon its top pick, lifting its price target to $350 from $335 and highlighting upside potential of around 40%. The bank cited strong growth prospects for AWS, its Bedrock AI platform, expanding opportunities in agentic commerce and greater warehouse automation. Amazon shares rose 5% on Monday after the call.
JPMorgan upgraded Intel to Neutral from Underweight, citing a more balanced risk and reward profile after a 36% fall from its June peak. Intel continues to lose CPU market share, but progress in manufacturing and new customer engagements offer potential upside. JPMorgan expects rising AI workloads and tight supply of advanced chips to support earnings revisions through 2027.
Goldman Sachs upgraded CoreWeave to Buy from Neutral, arguing that the market is overstating financing risks and understating the potential returns from its AI computing investments. Although Goldman lowered its price target to $106 from $139, it sees room for gains after a steep fall in the share price, helped by tight computing capacity and improving returns.
Bernstein upgraded Datadog to Outperform from Market Perform and raised its price target to $350 from $237, pointing to stronger than expected demand from AI focused customers. Enterprise AI token consumption among major AI labs reportedly grew by at least 50% quarter on quarter. Bernstein also lifted its near term revenue growth expectations by around seven percentage points.
Upcoming data and events
Today’s economic calendar includes the UK unemployment rate, Germany’s ZEW economic sentiment index and US housing starts, building permits and pending home sales. Together, these releases will shed further light on labour markets, business confidence and housing activity. On the earnings front, SpaceX, GE Aerospace, Netflix and RTX are due to report.
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