Wall Street ended Tuesday’s session marginally lower as investors assessed the first major quarterly earnings reports and held back ahead of September’s US consumer price index release.
Wall Street closes slightly lower
Losses across the three main US indices were small.
Index performance
The Dow Jones Industrial Average lost 0.4% and the Nasdaq Composite eased 0.2%, while the S&P 500 finished fractionally lower, down by less than 0.1%. Trading volumes were lighter than average.
Mixed reaction to bank results
Bank shares told a mixed story. Citigroup fell 5.6% even though its results came in ahead of expectations and its net interest income outlook improved. Wells Fargo dropped 3.1% after revenue fell short of forecasts, and JPMorgan Chase lost 0.9% following earnings below consensus. Goldman Sachs held up better, slipping 0.2% after beating estimates on both earnings and revenue.
Chipmakers under pressure
Technology stocks also weighed on the market. Micron Technology fell 3.6% following reports of progress in Chinese memory chip development.
Earnings outlook remains firm
Despite the softer session, the broader earnings outlook remains supportive. S&P 500 earnings are projected to grow by around 27% year on year, with energy, technology and communication services expected to lead.
Bonds, currencies and commodities
US Treasury yields eased slightly, with the 10-year yield dropping to approximately 5.22%. That level remains close to the highest seen since 2002. The US dollar softened against most major currencies.
Oil prices moved in different directions. WTI crude gained 1% to $94.71 per barrel, while Brent lost 0.4% to $106.21. Ongoing tensions in the Middle East and worries about Russian diesel supply continue to keep energy prices high.
Economic data and the IMF outlook
US data offered a mixed but generally resilient picture. Existing home sales increased 1.5% in September, and retail sales indicators suggested consumer spending is holding up well.
The IMF kept its 2026 US growth forecast unchanged at 2.3% and lifted its 2027 forecast to the same rate. Global inflation is projected to stay high at 4.7% this year before easing to 4.1% in 2027. Investors are now looking to the upcoming US inflation figures for further guidance on the Federal Reserve’s next steps and on whether current equity valuations can be sustained.
Latest market and economic update
Overnight trading brought gains in Asia, a flat start for US futures and higher oil prices, while fresh data from China and comments from Federal Reserve officials added to the picture.
Asian markets
Asian equities moved higher as semiconductor stocks rebounded from the previous session’s losses. South Korea’s KOSPI rose 1.6%, Japan’s Nikkei gained 0.6% and Hong Kong’s Hang Seng added 0.3%. Better than expected Chinese trade figures lifted sentiment, although high oil prices and caution before the US inflation release kept gains in check. China’s CSI 300 edged down 0.2%.
US futures
US index futures were little changed overnight. S&P 500 and Nasdaq 100 futures were flat, while Dow futures slipped 0.1%. Weakness in semiconductors, questions over the returns on AI spending and uneven bank results continued to weigh on sentiment as investors awaited September’s US inflation report for clues on the Federal Reserve’s interest rate outlook.
European equities
European stocks ended lower. The Euro STOXX 50 fell 0.6% and the STOXX Europe 600 eased 0.2%. ASML lost 4.2% on concerns about Chinese competition in semiconductors ahead of its results. Luxury names LVMH and Hermès also declined following soft demand in China and analyst downgrades. Banks bucked the trend, with UniCredit and Nordea both gaining close to 1%.
Currencies
The US dollar weakened as markets waited for the September inflation figures. Expectations of limited further tightening added to the pressure, with EUR/USD trading at 1.1207. Markets broadly expect no change to interest rates this month, although a further increase in December is widely anticipated.
Oil
Oil prices rose 0.8% overnight, with Brent at $106.51 per barrel and WTI at $94.87. Fresh Houthi attacks on Saudi Arabia, further incidents affecting shipping through the Strait of Hormuz and fears of escalating US-Iran tensions increased concerns about supply disruption. These concerns outweighed expectations of improved diesel supplies from a US-Russia deal.
China trade and inflation
Chinese exports jumped 36.3% year on year in September and imports grew 31%, both ahead of forecasts, widening the trade surplus to $133.5 billion. Consumer inflation stayed low at 0.9%, pointing to weak domestic demand. Producer prices rose 5%, their fastest pace since June 2022, driven by AI demand and higher input costs.
Federal Reserve commentary
New York Fed President John Williams and Boston Fed President Susan Collins both indicated they expect another US interest rate increase before the end of the year. They pointed to ongoing inflation risks linked to energy costs, tariffs and AI investment. Williams expects inflation to ease in 2027, and both officials said future policy decisions will be guided by incoming economic data.
Equities on the move
The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news.
Bank earnings
Citigroup delivered third-quarter results ahead of expectations. Adjusted EPS came in at $2.85 and revenue grew 8% year on year to $23.85bn, with Services, Wealth, Markets and Banking all contributing. Operating expenses fell 2% and net income rose to $5.2bn, while returns and book value per share also improved as the bank continued to execute its strategy.
JPMorgan Chase posted third-quarter profit below expectations, as fixed income markets revenue declined 4% and losses on investment securities weighed on results. Revenue increased 8% year on year to $50.9bn. The bank lifted its 2026 net interest income guidance to $106.2bn, while CEO Jamie Dimon cautioned about growing economic and geopolitical risks.
Wells Fargo beat third-quarter earnings expectations, with EPS up 13% year on year to $1.87, helped by broad-based growth and better efficiency. Revenue of $21.87bn fell short of forecasts, although net interest income grew 5%. Higher provisions for credit losses held back results, and the shares were down around 1.1% in pre-market trading.
Bank of America faces more than $1.2 billion in US regulatory penalties relating to anti-money laundering and sanctions compliance failures, involving over $5 billion in suspicious transactions. A separate $11.6 million settlement with OFAC covers sanctions breaches. The shares fell 2.3% in after-hours trading ahead of the bank’s quarterly results.
Healthcare and consumer
UnitedHealth beat third-quarter earnings expectations, with EPS of $4.69 and revenue of $112.7bn. Improved medical care costs lifted operating margins, although revenue was broadly flat year on year. The insurer raised its 2026 earnings guidance to at least $20.50 per share, above analyst forecasts, reflecting improving profitability.
Johnson & Johnson beat third-quarter expectations, with revenue rising 5.9% year on year to $25.4bn, and raised its 2026 earnings and revenue guidance. Innovative Medicine led growth, while MedTech sales increased modestly. The shares still fell around 4%, as the results did not deliver the larger beats investors had been looking for.
Domino’s lowered its full-year sales outlook, pointing to persistent inflation, competition and cautious consumer spending. US comparable sales rose only 0.3% and international sales increased 0.2%, both below expectations. Quarterly revenue of $1.19bn and EPS of $4.60 both beat forecasts, but the shares fell 3.3% on concerns about growth.
Technology, media and corporate deals
Apple launched new smart home products, including the $299 HomeView device, which uses an AI-upgraded Siri to control connected household devices. The launch is designed to support hardware sales and grow higher margin services revenue, although Apple faces established competition from Amazon and Google. HomeView will not be available in the EU because of regulatory restrictions on Siri AI.
Bumble agreed to be taken private by Ithaca Holdings in a $1.3bn deal as it works on a turnaround. Paying users fell 16.4% to 3.2 million in the second quarter, and engagement among younger users has weakened. The company is redesigning its dating app and adding AI features.
Netflix secured the broadcasting rights in Spain and Andorra for the 2030 men’s World Cup, its first major men’s international football tournament in Spain. Financial terms were not disclosed. The deal includes free-to-air coverage of Spain’s matches, both semi-finals and the final, plus one free match on each matchday.
Monte dei Paschi rejected Intesa Sanpaolo’s improved takeover offer, arguing that the premium remains below comparable Italian banking deals and leaves shareholders exposed to Intesa’s share price. Intesa raised the cash element of its offer to €3.8bn but threatened to withdraw the bid if shareholders approve Monte dei Paschi’s rival takeover proposals later this month.
Analyst views
Citigroup downgraded US equities to neutral from overweight and closed its long position in the S&P 500 Equal Weight index, pointing to rising market exuberance. Its positioning indicator has reached levels that have historically coincided with market peaks. Citi is reducing risk rather than turning bearish, a different stance from Goldman Sachs, which recently upgraded global equities to overweight.
HSBC expects third-quarter earnings to support equities and kept a positive view on AI, citing improving earnings momentum, attractive valuations and faster monetisation. The bank expects strong results and upgraded guidance, while flagging rising bond yields and volatility as risks. Hyperscalers remain its preferred beneficiaries of growing demand for AI computing.
Meta had its price target raised by Truist Securities to $1,000 from $763, with a Buy rating maintained on early traction for its Muse AI agent, which the broker estimates could add $28.5bn in revenue by 2030. Truist expects third-quarter revenue to rise 25% year on year to $63.9bn, supported by stronger advertising monetisation and AI-driven efficiencies.
MongoDB retained its Buy rating at Bank of America, with a $540 price target, on the strength of its differentiated database technology and AI growth potential. The bank believes its Atlas Infinite platform could attract enterprise customers running scalable AI workloads, and raised its 2028 and 2029 revenue forecasts on expectations of annual growth above 20% and GAAP profitability from 2027.
Netflix was downgraded by Huber Research to Underweight from Overweight, with the price target cut to $70 from $85. The analyst cited slowing viewing engagement, possible job cuts and limited room for further US price increases, as well as acquisition risks and higher content spending as competition from YouTube, Disney+ and Amazon Prime intensifies.
Nokia kept its Buy rating at Bank of America, which expects AI-related orders for optical and switching technologies to exceed €2bn. Together with cost cuts in wireless equipment, these orders are expected to offset softer demand for radio access network technology as Nokia benefits from rising investment in AI infrastructure.
Government debt warning
Fitch warned that higher government bond yields are making it harder for developed economies to stabilise their debt, potentially adding close to $4 trillion to government debt this year. France faces significant fiscal pressure, with its debt ratio projected to reach 128% by 2030, while the US is forecast to run the largest budget deficit at 7.5% of GDP.
Upcoming data and events
Wednesday’s key events include US September inflation data and the Federal Reserve’s Beige Book, alongside speeches from ECB President Lagarde and several Fed officials. ASML, Bank of America, Morgan Stanley, BlackRock and Progressive are all scheduled to report earnings.
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.
