Thursday US midday brief | Nasdaq futures down about 1%, Alphabet down about 11% premarket, STOXX up 0.11% at 644.80, Brent retreats to around $‌114, with GDP, PCE and the ECB decision due tonight
(Cash-market closes are for Wednesday, 28 October, US Eastern time; futures, European-market and commodity quotes were verified against compliant sources before 16:30 Hong Kong time on 29 October.)

On Wednesday, the S&P 500 rose 0.28% to 7743.97 points, the Dow rose 0.19% to 52475.10 points, the Nasdaq rose 0.27% to 26549.85 points, and the equal-weight S&P ETF (RSP) fell about 0.04% to $217.43 (Reuters, via secondary reporting) (RSP closing data). The 10-year Treasury yield remained above 5% in Thursday premarket trading; Brent crude fell about 1.1% to around $114.10 a barrel during Thursday trading, while WTI fell about 1.3% to around $101.45 a barrel (Reuters, via secondary reporting); spot gold was around $4040 an ounce, and the dollar index around 102.2 (Reuters, via secondary reporting).

Market themes
At midday Thursday, markets were “waiting for two data releases and carrying the weight of one stock”: tonight brings Q3 GDP and September PCE at 20:30, and the ECB decision at 21:15; Alphabet’s roughly 11% premarket drop has already dragged Nasdaq futures down about 1%. Wednesday’s Fed decision to hold by a 10–2 vote is still playing out: two hawkish dissents kept a December hike on the table, and tonight’s data are the first test. Europe has steadied first: STOXX is slightly higher, Shell and Airbus are supporting the market on earnings, but technology stocks are falling alongside Alphabet. The question for tonight’s US open is whether Alphabet’s decline spreads from one stock to the whole technology sector.

I. Europe and the ECB: STOXX edges higher above 644, Shell and Airbus lend support, technology follows lower; watch Lagarde on French bonds tonight

  • European markets steadied in Thursday trading: the pan-European STOXX 600 rose 0.11% to 644.80 at 08:06 GMT, the FTSE 100 rose 0.3%, energy gained 1% and technology fell 0.7% (Reuters). Today’s European gains are supported by energy and individual stocks, while losses follow Alphabet: opposing forces are offsetting each other behind the index’s modest rise.
  • Shell delivered Europe’s strongest earnings: adjusted third-quarter net profit of 10.81 billion dollars exceeded the company-compiled analyst average of 10.33 billion dollars and was the highest since 2022; refining margins reached a record 42 dollars per barrel. The company raised its quarterly buyback pace from 3 billion dollars to 5 billion dollars, and its shares rose 2.6% (Reuters, via secondary reporting) (Reuters). Airbus maintained its full-year outlook and production plans despite mixed third-quarter results, and its shares rose 3.2% (Reuters). Shell delivered with oil prices and refining margins; Airbus delivered by not lowering guidance. Today Europe is rewarding the absence of bad news itself.
  • For tonight’s 21:15 ECB decision, markets broadly expect the deposit rate to remain at 2.50%; the real focus is how Lagarde addresses French bond-market turmoil and her own future at her press conference (Reuters). Wednesday’s European close had already signaled caution: STOXX 600 rose just 0.07% to 644.14, France’s CAC 40 dipped, the FTSE 100 edged higher and Germany’s DAX rose 0.4%; the market reaction to the UK budget was muted (Reuters, via secondary reporting). The ECB is likely to hold tonight, but every word from Lagarde will be read for signals of whether it follows with a hike in December. Pressure in European bond markets is the real backdrop to the decision.

II. Bonds, dollar and commodities: oil retreats as hopes for talks offset the reality of attacks; gold holds at $4040, dollar hovers at 102.2

  • Thursday’s oil decline tells the opposite half of Wednesday’s story: prices rose Wednesday because refineries were attacked, and fell Thursday because talks might resume. Reuters reported Thursday that Brent fell 1.1% to 114.10 dollars and WTI fell 1.3% to 101.45 dollars as markets bet on a return to peace talks. US Vice President Vance wrote to Iran seeking renewed talks, and Qatari mediators submitted a new draft agreement to Iran, but a senior Iranian official called it unacceptable. Meanwhile, the Saudi-led coalition said it intercepted a ballistic missile aimed at eastern Saudi Arabia early Thursday, and the Houthis attacked Aden airport on Wednesday (Reuters, via secondary reporting). Hope for talks can push oil down 1 dollar, but news of interceptions and attacks means it cannot push it down 10 dollars: oil is trading the spread between the negotiating table and missiles.
  • Thursday brought no new story for bonds and currencies, only a continuation: the 10-year yield remained above 5%, the dollar index moved sideways around 102.2, and spot gold fluctuated around 4040 dollars. Gold has fallen about 2.5% since October and is near its lows since July (Reuters, via secondary reporting). With yields and the dollar refusing to fall, gold can only defend its position above 4000 dollars rather than rise. Tonight’s GDP and PCE are the next test of whether it can hold.

III. Stocks and sectors, including earnings: futures have diverged—Nasdaq down, Dow up; Asian chip stocks follow Alphabet’s shadow

  • Futures have already written half the script for tonight’s open: Nasdaq futures fell about 0.9%–1%, S&P 500 futures fell about 0.25%–0.4%, while Dow futures rose about 0.3%–0.4%. The Dow’s rise is not because the economy is strong, but because Alphabet has far less weight in it than in the Nasdaq (Reuters, via secondary reporting). The divergence says the market is penalizing technology and cash burn tonight, not US stocks as a whole.
  • Asian trading echoed that message: Samsung’s third-quarter operating profit rose nearly ninefold year on year to a record, but its shares still fell more than 4% because it announced no new shareholder-return plan, dragging South Korea’s KOSPI down more than 1%. SK Hynix continued to rise after a sharp gain the previous day, while Japan’s Nikkei closed slightly higher after volatile trading (Reuters, via secondary reporting). Samsung’s script is identical to Alphabet’s: record numbers, yet shares fall. The market now rewards generous payouts and lower spending, not simply high earnings.

IV. AI: the market has set its grading standard for Microsoft and Alphabet on the same night—profitable cloud rises, cash burn and negative cash flow fall; Amazon and Intel are next tonight

  • First, the contrasting answers after Wednesday’s close: Microsoft reported fiscal 2027 first-quarter revenue of 92.3 billion dollars, up 19% year on year, with Azure up 48%; shares rose about 3%–5% after hours. Alphabet’s third-quarter revenue rose 25% year on year to 127.6 billion dollars but missed expectations; free cash flow was negative 9.1 billion dollars, and capital spending plans remained at 195 billion–205 billion dollars. Shares fell about 10% after hours, wiping out nearly 400 billion dollars in market value (Reuters, via secondary reporting) (Microsoft official). Microsoft showed that cloud has absorbed the AI bill; Alphabet was penalized because its advertising cash machine failed to keep up and cash flow turned negative. One night, one AI narrative, two valuations.
  • Reuters’ Asian-market review highlighted the wider implication: Alphabet’s cash consumption raised the bar for tonight’s Amazon and Intel earnings. Investors are no longer granting a trust premium for AI ambition; they want spending to turn quickly into returns (Reuters, via secondary reporting). Tonight’s after-hours test for Amazon and Intel is identical to last night’s: not whether AI demand exists, but how soon money spent can become free cash flow.

V. Forward calendar (Hong Kong time)

  • 29 October (Thursday) 20:30: preliminary Q3 GDP (market expects annualized growth of about 3.0%–3.2%), September PCE (market expects about 3.6% year on year), and initial jobless claims; 21:15 ECB rate decision (market expects the deposit rate unchanged at 2.50%) and Lagarde press conference; before the US open: Eli Lilly, Mastercard, Merck and Caterpillar; after the close: Amazon and Intel.
  • 30 October (Friday): Bank of Japan decision (market expects no change at 1.25%); 20:30 employment cost index (market expects 0.8% quarter on quarter); before the open: Exxon Mobil and Chevron.
  • 3 November (Tuesday): US midterm elections; 5 November (Thursday): major French union strike; 16 November (Monday): Walsh attends the Federal Reserve productivity and employment task force hearing in the San Francisco Bay Area.

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