Healthcare and defensive sectors led gains on Wall Street on Tuesday while technology shares weakened. Super Micro Computer’s stronger revenue outlook then lifted AI-related shares, with Asian markets rallying on Wednesday and US futures rising, while oil prices also rose on supply concerns.
How markets closed on Tuesday
US stocks finished the session mostly in positive territory. The Dow Jones Industrial Average added 1.0% and the S&P 500 gained 0.3%, but the Nasdaq slipped as technology names came under pressure. Healthcare and other defensive sectors outperformed amid concerns over elevated valuations. Company results continued to drive individual share prices, although technology sector weakness and lingering doubts over the return on AI investment kept a lid on broader sentiment.
Global market and economic update
Asia rallies on AI optimism
Asian equities moved sharply higher on Wednesday. South Korea’s KOSPI jumped 4.6% and Japan’s Nikkei rose 1.7%, with AI-linked shares leading the advance following Super Micro Computer’s stronger revenue outlook. SK Hynix rose 6.5% and Samsung Electronics 6.2%. In Japan, September exports grew 16.7% year on year, which fell short of forecasts.
US futures point higher
US equity futures rose on Wednesday. Nasdaq 100 futures were up 1.0% and S&P 500 futures were 0.4% higher. Super Micro Computer gained more than 15% after issuing stronger guidance, which also supported Dell, HPE, CoreWeave and Nebius. SpaceX rose 8% in extended trading, while Netflix dropped more than 5% after publishing a softer outlook.
Europe closes lower
European indices ended Tuesday in the red. The Euro STOXX 50 lost 0.4% and the STOXX Europe 600 eased 0.1%, with technology and industrial stocks dragging on the market. ASML declined 2.2% on worries about how AI spending will be financed. Sanofi climbed 3%, while Argenx jumped 6%.
Currencies
The US dollar steadied after earlier hitting a three-week low. Higher oil prices, inflation worries and demand for safe havens all lent support. EUR/USD was trading at 1.1279. Markets expect the Federal Reserve to keep rates on hold at next week’s meeting, but the possibility of a rate hike in December continues to underpin the dollar.
Commodities
Oil prices rose. Brent crude rose 0.6% to $109.48 a barrel and WTI was up 0.65% at $98.46. Tension in the Middle East added to supply worries, and US crude stockpiles fell by 4.93 million barrels, a far larger drop than markets had anticipated.
Geopolitics
US envoy Steve Witkoff is set to meet Vladimir Putin, following constructive talks with Ukraine’s Volodymyr Zelenskiy in Oslo. Those discussions covered security guarantees, reconstruction and a possible peace framework. Uncertainty over US military support persists, with Patriot missile deliveries unclear, while Russian strikes on Ukrainian infrastructure continue.
Stocks making headlines
Technology and AI
Super Micro Computer. The server maker’s shares rose 15.6% after hours once it guided first-quarter revenue to between $18.5bn and $19.5bn, comfortably ahead of expectations, alongside improved gross margins. The update points to strong demand for AI data centre infrastructure and pushed Dell and HPE higher, although questions remain over financing costs and the eventual returns on this infrastructure.
SpaceX. Third-quarter revenue climbed 161% year on year to $14.6bn, with net income of $4.4bn. AI computing, Starlink and space operations all contributed. The shares gained 8% after hours, and independent committees are looking at a possible merger with Tesla.
Nvidia. Reports suggest Nvidia cannot meet Chinese demand for its RTX PRO 5500 graphics cards. ByteDance, Alibaba and Tencent are said to have placed orders for more than 3 million units, worth over $35bn in total. US export restrictions limit access to more advanced data centre chips, and 2027 production could remain constrained.
Apple. Loop Capital moved Apple to Hold from Buy and lowered its price target to $330 from $370. Its supply chain checks indicate that the 13 million iPhone units cut from second-half 2026 shipments will not be made up. Higher memory costs and falling average selling prices are adding to the pressure. Separately, strong pre-orders for Apple’s first foldable iPhone, which starts at $1,999, have reportedly pushed delivery times out to January 2027.
Storage and software. Morgan Stanley kept Overweight ratings on Western Digital and Seagate but lowered its Western Digital target to $643 from $676 and raised Seagate’s to $1,200 from $1,187. Robust hard drive demand and the prospect of supply shortages underpin the earnings outlook for both. Elsewhere, Bernstein lifted its ServiceNow target to $266 on the back of AI adoption and pricing potential, and Raymond James upgraded Akamai to Strong Buy, anticipating that AI cloud revenue growth will drive a recovery.
OpenAI. OpenAI has bought Orchestra Bio, a start-up building AI agents for pharmaceutical drug development, and is integrating the technology into Rosalind, its life sciences platform. The deal deepens its move into AI-led research. Competitor Anthropic is also expanding, having acquired Coefficient Bio for around $400m.
Aerospace, defence and industrials
GE Aerospace and RTX. GE Aerospace posted third-quarter adjusted EPS of $2.25 against forecasts of $2.00, with revenue up 18% to $13.29bn. Orders rose 49% to $19bn, prompting the company to lift its full-year guidance for earnings and free cash flow. RTX also upgraded its 2026 earnings and revenue outlook after third-quarter sales grew 11% to $24.97bn. Its order backlog hit a record $340bn on strong demand from both commercial aerospace and defence customers.
Boeing. The FAA has given final approval to the 737 MAX 10, clearing Boeing to start deliveries of the largest model in the 737 range. The MAX 10 accounts for roughly 30% of the 737 backlog, and United Airlines is its biggest customer. Approval comes after almost seven years of delays, and a new production line in Everett is intended to raise output.
Ryanair. Chief executive Michael O’Leary expects European fares to climb by 10% to 20% over the coming year, as higher fuel costs and airline collapses take capacity out of the market. Ryanair also intends to drop 20 Belgian routes and remove more than one million seats following a proposed increase in aviation tax.
Schneider Electric. The group raised €6bn through a discounted share placement to help fund its $22.6bn takeover of PTC. The placement dilutes existing shareholders by around 4.3%. Barclays lowered its price target to €326 from €356, pointing to uncertainty over expected revenue synergies and the risks involved in integration.
Consumer, transport and healthcare
Netflix. Third-quarter results came in ahead of expectations, with revenue of $12.87bn and EPS of $0.87. However, the shares lost more than 5% after hours because fourth-quarter revenue guidance fell short. Netflix also trimmed its 2026 advertising revenue forecast to $2.7bn from $3bn amid slower progress on ad products, mixed engagement data and job cuts.
United Airlines. Adjusted third-quarter EPS of $2.54 came in just below forecasts, while revenue grew 17% year on year to $17.88bn. Despite a record number of passengers and strong premium and loyalty income, the shares fell almost 4% after hours as fourth-quarter EPS guidance of $0.50 to $1.50 implied a midpoint of $1.00, below the $1.88 consensus.
Intuitive Surgical. The shares dropped nearly 7% after hours, even though adjusted EPS reached $3.00 and revenue rose 22% to $3.05bn. A $450m pre-tax charge relating to an antitrust settlement weighed on reported profit, and investors were disappointed that full-year procedure growth guidance was left unchanged, despite healthy procedure volumes and system placements.
Carrefour. The French retailer cut its 2026 targets for profitability and free cash flow amid unrest, damage to stores and high energy costs. Third-quarter sales grew 2.3% year on year to €22.7bn, ahead of expectations. Carrefour now guides to operating margin expansion of between zero and 15 basis points, compared with 25 basis points previously.
General Motors. Third-quarter revenue increased 2.9% year on year to $50bn, and adjusted EPS of $3.70 came in slightly above forecasts. GM narrowed its full-year adjusted EPS guidance to $12.75 to $13.75, with the midpoint below consensus. It raised its automotive free cash flow guidance to $11.5bn to $12.5bn, helped by stronger profitability in North America.
Vodafone. Barclays cut Vodafone to Underweight from Equal Weight and reduced its price target to 105p from 115p. The broker estimates that AI agents and satellite broadband could lower revenue by 5.9% over five years and reduce EBITDA by about 15%, with Germany particularly exposed.
What to watch next
Economic data
UK inflation for September is expected at 3.1%, easing from 3.4% previously. In the US, investors will look at mortgage applications, weekly petroleum inventories and a 20-year Treasury bond auction.
Corporate earnings
Meta, Tesla, Lam Research, Philip Morris International, SAP and Texas Instruments are among the companies due to report.
This information is being provided solely for information purposes and should not be deemed or construed as investment advice, tax, legal, or any other ancillary regulatory advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing in this document. The financial instruments discussed are intended for retail clients however, they may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein. The value of the investment may go down as well as up and may be affected by changes in currency. Where investments are denominated in a currency other than the investor’s base or reporting currency, changes in foreign exchange rates may adversely affect the value and/or returns of the investment. Any performance figures quoted refer to the past and past performance is not a guarantee nor a reliable guide to future performance. Calamatta Cuschieri Investment Services Ltd (C13729) is licensed by the MFSA to carry out investment services business in terms of the Investment Services Act (Cap. 370). The company is a subsidiary of Calamatta Cuschieri Moneybase plc and is registered at Level 0, Ewropa Business Centre, Dun Karm Street, Birkirkara BKR 9034, Malta.
