US Stocks Wednesday Evening Brief | Futures diverge as Nasdaq leads; hawkish Fed hold expected tonight; Microsoft and Alphabet face after-hours tests; oil tops $115; GE Vernova orders surge
(Cash-market closing figures are for Tuesday, 27 October, US Eastern Time; futures, European market and commodity prices were verified against compliant sources before 21:30 Hong Kong time on 28 October. US stocks had just opened at 21:30 Hong Kong time, so this edition focuses on premarket developments; intraday quotes were not available for this edition.)

On Tuesday, the S&P 500 rose 0.60% to 7722.60 points, the Dow gained 0.03% to 52377.57 points, the Nasdaq climbed 1.18% to 26477.81 points, and the equal-weight S&P ETF (RSP) rose about 0.11% to $217.52 (Reuters) (RSP closing data). Early Wednesday US Eastern Time, Dow futures fell 88 points (-0.17%), S&P 500 futures rose 7.25 points (+0.10%), and Nasdaq 100 futures gained 122 points (+0.41%) (Reuters). The 10-year US Treasury yield closed near 4.99% on Tuesday and edged higher premarket; Brent crude rose to $115.36 a barrel on Wednesday and WTI to $101.12 a barrel (Reuters); spot gold fell 0.7% to $4030.20 an ounce before Wednesday's open (Reuters); and the dollar index held near a two-week high premarket at 102.37 (Reuters).

Market theme
The premarket story in Wednesday's evening brief is: “Chips provide the initial confidence; central banks and earnings will set the direction.” SK hynix's record earnings lifted Micron, Nvidia and AMD together, sending Nasdaq futures into the lead, while Dow futures edged lower—divergence is itself tonight's theme. The Fed decision is due at 02:00 in the early hours, followed by a press conference with Warsh at 02:30. Microsoft and Alphabet report after the close, and the Bank of Canada also decides today. Tonight's market question is not “Will rates rise?” but “How hawkish will the language accompanying a hold be?” Oil is above $115, the probability of a hike in December remains around 84%, and any easing or tightening of the language on inflation will be repriced after the close.

I. Premarket and the Fed: Nasdaq futures lead while Dow futures fall; a hawkish hold is the consensus, with the number of dissenting votes in question

  • Reuters' premarket report made the picture clear: memory-chip stocks drove Nasdaq futures higher. After SK hynix's quarterly profit rose more than sevenfold, its US-listed shares gained 7.8% premarket, Micron rose 4%, Sandisk 0.8%, Western Digital 4.5%, Nvidia 0.8%, AMD 1.5% and Marvell 1.7% (Reuters). The chip rally is about higher memory prices translating into profit, not another retelling of the AI story. Tonight Microsoft and Alphabet must demonstrate the other side of the same equation: whether cloud providers' revenue can cover their bills.
  • Reuters' Morning Bid characterized tonight's decision as a “hawkish hold”: markets broadly expect the Fed to keep rates unchanged, with attention on how Warsh describes the pause and whether he signals another hike before year-end; the number of dissenting votes could be a key signal. Inflation has remained above the 2% target and unemployment below 5% for more than five years, requiring the Fed to recalibrate what constitutes a “neutral” rate (Reuters). A JPMorgan client note forecast at least two hawkish dissents (Reuters). Holding steady does not mean a shift to easing: tonight's real market action lies not in the 02:00 decision, but in every word Warsh says at 02:30 and the number of dissents.
  • Rate expectations remain hawkish: Reuters reported premarket that market pricing points to at least three more hikes before the end of 2027, while Thursday's September PCE and Q3 GDP will test that expectation (Reuters); gold traders price the probability of a December hike at about 84% (Reuters). The Bank of Canada may also raise rates by 25 basis points today for the first time in three years, to preempt the spread of energy-driven inflation (Reuters). The Fed is set to hold tonight and Canada may hike today—on the same day, the two North American central banks are telling the same story: rising energy prices are pushing back the “inflation is dead” narrative.

II. Europe: STOXX 600 edges lower, Deutsche Bank rises and Santander falls; investors wait ahead of the UK budget

  • Europe fell first on Wednesday: the pan-European STOXX 600 dropped 0.16% to 642.64 points at 08:11 GMT (16:11 Hong Kong time); Deutsche Bank rose 3.5% and Spain's Santander fell 2.9%, while an oil-price rise of more than 2% weighed on risk appetite (Reuters, as reported by another outlet). Europe's decline today is not about whether earnings were good or bad, but about investors hesitating to act ahead of the decision. Deutsche Bank rose and Santander fell: in the same bank earnings season, each is still judged on its own numbers.
  • London was similarly cautious: the FTSE 100 fell 0.3% to 10652.43 points at 09:54 GMT (17:54 Hong Kong time). Unilever fell 2.2% and GSK dropped 5.7%, leading the declines; Standard Chartered rose 2.8% after lifting its full-year revenue growth guidance to above 7%. Markets broadly stayed on the sidelines ahead of Chancellor Healey's first budget and the Fed decision (Reuters). The UK budget itself will not determine tonight's US stock market open, but it will determine whether European bond markets add to the FOMC's difficulties tonight: the weaker the signal on fiscal discipline, the greater the upward pressure on global yields.

III. Bonds, dollar and commodities: oil above $115 weighs on gold; dollar holds near a two-week high

  • Wednesday's premarket combination was a notch “tighter” than Tuesday's: oil up, gold down and the dollar strong—all three point to inflation expectations that have yet to ease. Reuters reported that the Houthis said on Tuesday they had struck Saudi Arabia's largest refinery with missiles. Brent rose as much as $1.48 to $115.36, while WTI gained $1.22 to $101.12; Saudi authorities did not immediately confirm the attack on the facility, which processes 550 thousand barrels a day (Reuters). Reuters' Canadian markets report said oil rose a further $2 or more on Wednesday (Reuters). Tuesday's retreat reflected “hopes for talks”; Wednesday's rebound reflected “news on the ground”—the market now believes attacks and interceptions, not the negotiating table.
  • Gold's story is also written in oil prices: spot gold fell 0.7% to $4030.20 premarket Wednesday, after rising about 1% in the previous session. ANZ analysts said gold's path depends on rate expectations and inflation risks from energy prices, with continued Fed caution a short-term headwind for gold (Reuters). The dollar index held near a two-week high at 102.37, while the New Zealand dollar fell more than 1% after the Reserve Bank of New Zealand unexpectedly held rates steady (Reuters). Gold's decline does not mean demand for safety has vanished: oil has pushed “higher for longer” expectations up another notch. As long as Brent remains above $115, gold will struggle to establish a firm footing in one move.

IV. Stock and sector movers, including earnings: Robinhood falls 8% on crypto business, Visa slips, GE Vernova and Biogen report premarket

  • Robinhood is the clearest premarket gauge of retail investor sentiment: third-quarter profit was $476 million, or 51 cents per share, below the market's expectation of 55 cents. Cryptocurrency revenue plunged 55% to $120 million, while total net revenue still grew 12% to $1.42 billion; shares fell 8% premarket (Reuters). Total revenue rose, profit missed, and shares fell 8%—the market is penalizing the fact that crypto's most profitable volatility-driven business has stalled, not trading volume, while Bitcoin has fallen nearly 28% over the past three months.
  • Visa also fell initially: fourth-quarter net profit was $6 billion, or $3.19 per share, above $5.1 billion, or $2.62 per share, a year earlier; payment volume grew 9%. Shares fell 1.7% premarket (Reuters) (Reuters). Profit rose and the share price fell—the standard for consumer stocks this year is clear: good earnings are merely the entry ticket; the size of the beat determines the share price.
  • Two substantial premarket reports offered a different picture: GE Vernova's third-quarter revenue was $12.64 billion, up 27% year on year. Adjusted EBITDA was $1.94 billion, above analysts' $1.68 billion forecast; orders surged more than 96% to $29.3 billion, and the backlog reached a record $197 billion. It raised full-year revenue guidance for the third time to $46.5 billion–$47.5 billion and announced the acquisition of grid equipment maker Trench Group for $9 billion (Reuters, as reported by another outlet). Biogen's third-quarter revenue rose 11% to $2.8 billion, above the $2.63 billion forecast. Adjusted earnings per share were $2.62, above the $1.99 forecast, and it raised the lower end of its full-year adjusted profit guidance by 20 cents to $12.20–$13 (Reuters). GE Vernova's story is grid orders; Biogen's is rare diseases taking up the baton. The companies rising premarket are those whose new growth engines already have numbers behind them.
  • The other side of the premarket picture: Seagate fell 3.7% after reporting first-quarter results, making it an exception among storage stocks (Reuters). Among the same group of storage stocks, SK hynix and Micron rose while Seagate fell. The premarket divergence is in how much each company's earnings delivered, not in the industry.

V. AI news: Alphabet rises 1.2% premarket on report of OpenAI purchases; Microsoft and Alphabet must demonstrate monetization tonight

  • Alphabet rose 1.2% premarket after media reports that OpenAI planned to buy Google's AI chips (Reuters). Chipmakers and cloud providers buying from and supplying one another has become normal in this AI trade. Tonight's question is whether cloud revenue can cover the capital spending bill, rather than who bought whose chips.
  • Reuters' premarket report identified the central question for tonight: investors will closely examine Microsoft and Alphabet's capital spending plans to judge whether enormous AI investments are generating returns. Against a backdrop of rising borrowing costs, concerns over the sustainability of debt financing continue to weigh on the sector (Reuters). Direxion head of capital markets Jake Behan's assessment is worth recording: demand remains strong, but as capital spending continues to accelerate, the market is increasingly focused on what those outlays will ultimately produce; “the more skeptical the market is about AI returns, the harder it is to justify today's pace of spending” (Reuters). Strong AI demand alone is no longer enough; the market wants evidence of monetization, margins and cash flow. Microsoft and Alphabet's after-hours earnings tonight are the second formal test of that proposition.

VI. Forward calendar (Hong Kong time)

  • Tonight, 28 October (Wednesday): UK budget released; Bank of Canada rate decision (market expects a 25-basis-point hike); Microsoft and Alphabet report after the US close.
  • Early 29 October (Thursday), 02:00: FOMC decision (market expects rates to remain at 3.75–4.00%, with no dot plot this round; a hold this week is nearly unanimous consensus, and the probability of a December hike is about 84%); Fed Chair Warsh's press conference at 02:30.
  • 29 October (Thursday): 20:30 Q3 advance GDP (market expects annualized growth of 3.2%, above the previous 2.2%) and September PCE; 21:15 ECB rate decision; Eli Lilly and Mastercard premarket; Amazon and Intel after the close.
  • 30 October (Friday): Bank of Japan decision; 20:30 employment cost index (market expects 0.8%, below the previous 0.9%); Exxon Mobil and Chevron premarket; seven OPEC+ oil producers meet Sunday to assess output policy (Reuters expects the December target to remain unchanged).
  • 31 October (Saturday): Further demonstrations in France (called by unions and the Yellow Vests); 3 November (Tuesday): US midterm elections; 5 November (Thursday): major strike by French unions.

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