[BRIEFING.COM] The stock market staged a broad rally on Wednesday following Tuesday's midterm elections, with a sharp decline in crude oil prices and optimism surrounding potential bipartisan efforts to address affordability providing additional support. The S&P 500 (+1.6%), Nasdaq Composite (+1.4%), and DJIA (+3.0%) finished with sizable gains, although the S&P 500 fell just shy of closing above its 50-day moving average (7693). The advance was accompanied by a sharp decline in volatility, with the CBOE Volatility Index falling 19.4% to 16.78.

Equity futures reversed sharply higher overnight after President Trump acknowledged Democratic victories in both chambers of Congress, easing political uncertainty that had contributed to recent market volatility. The results also fueled speculation that lawmakers from both parties could find common ground on measures to reduce living costs, including potential tariff relief and lower energy prices. Democrats campaigned heavily on affordability issues, while Republicans could face additional pressure to address consumer concerns ahead of the 2028 elections.

The prospect of easing geopolitical tensions provided another significant catalyst. Crude oil futures settled $7.93 lower (-8.3%) at $88.23 per barrel, extending their week-to-date decline to more than 15%. Prices initially retreated after President Trump indicated that he had no immediate plans to launch military strikes against Iran, according to the Financial Times. Selling intensified following comments from presumptive incoming Senate Majority Leader Chuck Schumer, who expressed confidence that some Republicans would support a resolution to end the Iran war. The energy sector (-4.7%) finished as the day's worst performer by a wide margin.

Consumer-facing stocks were among the primary beneficiaries of the changing political and energy backdrop. The consumer discretionary sector (+4.3%) led the advance, with homebuilders showing particularly impressive strength as the iShares U.S. Home Construction ETF jumped 7.6%. Discount retailers also rallied on expectations that lower gasoline prices could improve household purchasing power, while declining diesel costs could provide some relief from freight expenses. Dollar Tree (DLTR 147.00, +12.93, +9.64%) and Dollar General (DG 141.64, +11.12, +8.52%) were among the notable outperformers. McDonald's (MCD 280.22, +17.18, +6.53%) also rallied following its mixed Q3 earnings report, which showed improving U.S. comparable sales trends toward the end of the quarter.

The advance was well distributed across the broader market, with the financials (+3.5%), real estate (+3.2%), materials (+3.1%), health care (+3.0%), communication services (+3.0%), and consumer staples (+3.0%) sectors all posting sizable gains. Notably, the financials, health care, and consumer staples sectors reached fresh all-time highs. CVS Health (CVS 79.96, -11.45, -12.53%) was an exception to the strength in health care, declining sharply after announcing plans to separate into two publicly traded companies by the first half of 2028.

Mega-cap growth stocks also participated in the rally, with the Vanguard Mega Cap Growth ETF gaining 1.5%, supported by strength in Microsoft (MSFT 555.80, +34.81, +6.68%) and Amazon (AMZN 266.03, +15.34, +6.12%). According to a thesis advanced by Needham, tighter restrictions on data center development after the Democratic victories in key states could benefit established hyperscalers that are further along in their infrastructure expansion, potentially reducing future capital spending requirements while improving returns on invested capital.

That prospect weighed heavily on companies more directly dependent on continued AI infrastructure investment. The information technology sector (+0.6%) significantly underperformed the broader market as the PHLX Semiconductor Index fell 3.1%. Concerns that Democratic control of Congress could slow the pace of data center construction overshadowed a strong quarterly update from Advanced Micro Devices (AMD 488.78, +4.88, +1.01%), which topped Q3 expectations and raised its 2027 growth outlook. The weakness extended to neocloud companies, with the Roundhill Neocloud ETF (NCLD 13.99, -1.40, -9.10%) falling to a fresh record low amid concerns that tighter restrictions on data center construction could undermine future growth prospects for companies heavily dependent on AI infrastructure spending.

The weakness also extended to AI infrastructure companies such as GE Vernova (GEV 832.85, -85.35, -9.30%) and Comfort Systems (FIX 1089.89, -195.24, -15.19%), which suffered sharp declines. As a result, the industrials sector (-1.1%) was the only other sector to finish lower, although 3M (MMM 193.95, +16.90, +9.55%) stood out after announcing a broad resolution of PFAS-related personal injury claims tied to firefighting foam litigation and authorizing a new $6 billion share repurchase program.

Wednesday's rally reflected a pronounced shift in market leadership, with consumer-oriented stocks and several previously overlooked areas benefiting from expectations for lower energy costs and potential policy changes following the elections. The breadth of the advance was encouraging, although persistent weakness in semiconductors and AI infrastructure stocks raised questions about the rally's durability, particularly with the S&P 500 unable to reclaim its 50-day moving average by the close. 

U.S. Treasuries rallied on Wednesday, sending yields on the 10-year note and shorter tenors to their lowest closing levels since early September. The 2-year note yield settled down three basis points to 4.59%, and the 10-year note yield settled down six basis points to 4.89%. 

• Russell 2000: +15.1% YTD
• S&P Mid Cap 400: +12.7% YTD
• S&P 500: +12.3% YTD
• DJIA: +11.0% YTD
• Nasdaq Composite: +10.7% YTD

Reviewing today's data:

• 10/31 MBA Mortgage Applications Index -1.2% (Prior 3.4%)
• Oct ADP Employment Change 86K (Briefing.com consensus 75K; Prior 86K revised from 90K)
• Sep Trade Balance -$105.0B (Briefing.com consensus -$108.4B; Prior -$105.7B revised from -$105.6B)
• Oct S&P Global U.S. Services PMI - Final 56.1 (Prior 57.9)
• Oct ISM Non-Manufacturing Index 54.5 (Briefing.com consensus 54.8; Prior 54.9)
• 10/31 EIA Crude Oil Inventories -0.865M (Prior -1.892M)

[BRIEFING.COM] The S&P 500 (+1.8%), Nasdaq Composite (+1.7%), and DJIA (+3.2%) have spent the afternoon trading in a tight range, maintaining their firm gains.

Investors have another sizable batch of earnings reports to digest after the close, including results from Qualcomm (QCOM 165.70, +1.27, +0.77%). The chipmaker's report will be closely watched for signs of improving handset demand and updates on its emerging data center business, which is expected to begin generating revenue in the December quarter. Its Q1 outlook and FY27 commentary will be particularly important as the company looks to offset declining Apple-related revenue and higher manufacturing costs through growth in its automotive and data center businesses.

[BRIEFING.COM] The S&P 500 (+1.7%), Nasdaq Composite (+1.7%), and DJIA (+3.0%) remain on track for sizable gains as the market enters the final hour of trading.

Discount retailers are among today's standout performers, with Dollar Tree (DLTR 145.25, +11.18, +8.34%), Dollar General (DG 139.60, +9.08, +6.96%), TJX (TJX 145.78, +8.15, +5.92%), Ross Stores (ROST 245.97, +14.37, +6.20%), and Burlington Stores (BURL 257.21, +17.31, +7.22%) posting strong gains. The State Street SPDR S&P Retail ETF is up 5.2%, reflecting optimism that the sharp decline in energy prices could ease pressure on household budgets and support consumer spending heading into the holiday season.

Crude oil futures settled $7.93 lower (-8.3%) at $88.23 per barrel amid growing expectations for an end to the Iran war following Tuesday's election results. Sustained declines in gasoline prices could provide consumers with additional spending power, while lower diesel prices could help retailers reduce freight costs, potentially providing a boost to profit margins.

[BRIEFING.COM] The S&P 500 (+1.8%) trades near its best level of the session, which puts the benchmark index back above its 50-day moving average (7693) after three days below that mark.

Today's advance has received broad support, evidenced by gains in nine out of eleven sectors with eight up at least 1.0%, seven with gains of 2.0% or more, and four that are up 3.0% or more.

Top-weighted technology (+1.2%) is among today's advancers, but there are some soft spots in the group. Chipmakers are among the laggards, putting the PHLX Semiconductor Index (-3.5%) on track for its lowest close since late April. On a related note, AI/data center infrastructure names have given in to heavy pressure with the Roundhill Neocloud ETF (NCLD 14.05, -1.34, -8.71%) falling to a fresh record low amid speculation that Washington's power shift toward Democrats will pose a headwind to the AI buildout.

Elsewhere, the energy sector (-5.1%) is today's worst performer by a wide margin as crude oil falls below $90/bbl toward its 200-day moving average (86.93). The heavy pressure on oil has lent support to Treasuries, putting the 10-yr yield (-7 bps to 4.88%) on the verge of its lowest settlement since early September.

[BRIEFING.COM] The market's sizable advance remains notably incomplete. The Nasdaq Composite is up 1.8%, and the Russell 2000 is up 1.5%, but semiconductor weakness has intensified, leaving the PHLX Semiconductor Index down 3.7%. That divergence shows that today's gains do not depend on the chip group.

The semiconductor decline reflects concern that Democratic control of Congress and wins by Democratic gubernatorial candidates in key states like Texas could slow the pace of AI data center development. That prospect is prompting a broader reassessment of companies tied to continued infrastructure expansion, even as other areas of the market post strong gains.

Advanced Micro Devices (AMD 482.39, -1.51, -0.31%) has not been able to change that sector-wide dynamic despite a reassuring quarterly update. In a CNBC interview, CEO Lisa Su said compute demand exceeds supply, the order pipeline is strong, and data center revenue is expected to grow about 50% sequentially in the fourth quarter. Those comments reinforce AMD's company-specific growth outlook, but they do not resolve the policy uncertainty now weighing on the wider semiconductor group.

The pronounced weakness in that key area raises questions as to whether the broader market rally effort will have legs much beyond today's trade, especially if semiconductor stocks continue to lose ground.

[BRIEFING.COM] The major averages remain near their session highs, little changed from previous levels.

The health care sector (+2.7%) is among today's outperformers, although CVS Health (CVS 79.65, -11.76, -12.87%) is an S&P 500 laggard despite topping Q3 earnings and revenue expectations and raising its FY26 earnings guidance above consensus. The company also announced plans to split into two publicly traded businesses, separating its healthcare solutions operations from its retail pharmacy business, with the transaction expected to be completed in the first half of 2028.

[BRIEFING.COM] The S&P 500 (+1.8%), Nasdaq Composite (+2.1%), and DJIA (+2.9%) remain firmly higher just after midday. 

The consumer staples sector (+4.7%) remains a standout, supported in part by strength in McDonald's (MCD 277.11, +14.07, +5.35%), which is rallying following its Q3 earnings report. The company topped earnings expectations but missed revenue estimates, while improving U.S. comparable sales trends toward the end of the quarter provided encouragement that its renewed focus on value offerings and digital promotions is beginning to gain traction.

Elsewhere on the earnings front, Booking Holdings (BKNG 172.72, +17.04, +10.95%) is surging after reporting better-than-expected adjusted earnings and accelerating room-night growth, despite an FTC-related revenue adjustment and cautious Q4 guidance. Expedia Group (EXPE 322.67, +36.90, +12.91%) is trading higher in sympathy, adding to the strength in travel-related stocks and providing further support for the consumer discretionary sector.

Meanwhile, Comfort Systems (FIX 1075.91, -209.22, -16.28%) is among the S&P 500's worst performers, plunging amid concerns that Democratic control of Congress could lead to restrictions on data center construction. The company has benefited substantially from AI infrastructure spending, with technology customers accounting for more than 60% of its Q3 revenue, leaving it particularly exposed to any potential slowdown in data center development.

[BRIEFING.COM] The major averages are moving back toward their session highs as selling pressure eases across semiconductor stocks, with the S&P 500 (+1.8%) reclaiming its 50-day moving average (7693).

Meanwhile, crude oil is extending its decline to fresh session lows, down $7.66 (-8.0%) to $88.43 per barrel, bringing its week-to-date loss to more than 15%. The latest leg lower follows comments from presumptive incoming Senate Majority Leader Chuck Schumer, who said he expects some Republicans to join Democrats in supporting a resolution to end the Iran war.

The sharp retreat in oil prices continues to weigh heavily on the energy sector (-5.6%), which is a notable laggard amid the broader market rally.

[BRIEFING.COM] The S&P 500 (+1.3%), Nasdaq Composite (+1.3%), and DJIA (+2.4%) are firmly higher just before midday, supported by relief following last night's midterm elections and another retreat in oil prices. The S&P 500 sits 0.3% below its 50-day moving average (7693), having briefly traded above that level earlier.

Equity futures reversed sharply higher overnight after President Trump acknowledged Democratic victories in both chambers of Congress, easing political uncertainty. Meanwhile, crude oil is down $4.17 (-4.3%) to $91.98 per barrel after President Trump indicated that he has no immediate plans to strike Iran, according to the Financial Times.

Consumer-facing stocks are outperforming amid lower oil prices and optimism surrounding the Democrats' affordability-focused campaign. Speculation about potential bipartisan support for repealing certain tariffs is also providing encouragement. The consumer discretionary (+3.8%) and consumer staples (+3.3%) sectors lead the advance.

Eight S&P 500 sectors are higher, seven by more than 2.0%. The information technology sector (+0.6%) is lagging as concerns that Democratic control of Congress could slow AI data center development weigh on semiconductor stocks. The PHLX Semiconductor Index is down 3.8%.

The broad advance highlights a shift in market leadership away from the AI-infrastructure trade, with consumer-oriented names benefiting most from the changing political and energy backdrop.

[BRIEFING.COM] The major averages have slipped slightly from their earlier highs but remain firmly higher. Semiconductor stocks are a notable pocket of weakness, with the PHLX Semiconductor Index down 3.8% amid concerns that Democratic control of Congress could slow the pace of AI data center development. The weakness is weighing on the information technology sector (+1.0%), which is now underperforming the broader market.

Marvell (MRVL 158.00, -13.97, -8.12%) is a notable laggard, extending its sharp decline following Monday's announcement of its all-stock acquisition of Lumentum (LITE 607.31, -72.85, -10.71%).

Advanced Micro Devices (AMD 482.29, -1.61, -0.33%) has experienced volatile trading following its earnings report yesterday, surging 9% in after-hours trading, but is currently trading modestly lower. The company topped Q3 earnings and revenue expectations, issued above-consensus Q4 revenue guidance, and raised its 2027 growth outlook, supported by accelerating Data Center revenue and the ramp of its Helios AI infrastructure platform.

[BRIEFING.COM] The S&P 500 (+1.6%), Nasdaq Composite (+2.2%), and DJIA (+2.0%) are maintaining the bulk of their opening gains.

Mega-cap stocks are pacing the advance, with the Vanguard Mega Cap Growth ETF up 2.3%. The communication services sector (+4.0%) is among the top-performing S&P 500 sectors as Alphabet (GOOG 292.28, +14.01, +5.03%) rebounds sharply from recent weakness, while Meta Platforms (META 631.69, +10.66, +1.72%) also holds a solid gain.

The ISM Services PMI decreased to 54.5% in October (Briefing.com consensus: 54.8%) from 54.9% in September. The dividing line between expansion and contraction is 50.0%, so the October reading reflects services sector activity expanding at a slightly slower pace than the prior month.

The key takeaway from the report is that the services sector continues to operate in an expansion mode in spite of continued price increases for materials and services.

[BRIEFING.COM] Stocks are off to a broadly higher start as the conclusion of the midterm elections provides some relief following a period of heightened volatility in the lead-up to the vote. The S&P 500 (+1.7%), Nasdaq Composite (+2.2%), and DJIA (+2.4%) move into firmly higher week-to-date territory with their opening gains, which are well distributed across a variety of sectors.

The consumer discretionary sector (+4.4%) leads the advance, with consumer-facing stocks showing notable strength following Democratic victories in both the House and Senate after a campaign that placed considerable emphasis on affordability issues. Homebuilders are among the notable outperformers, with the iShares U.S. Home Construction ETF up 6.2%. Another move lower in oil prices to the $93 per barrel mark and Treasury yields that are modestly lower across the curve add to the enthusiasm. The energy sector (-3.3%) is unsurprisingly a laggard. The sector is also supported by a sharp gain in Amazon (AMZN 271.01, +20.32, +8.11%), which outweighs a move lower in Tesla (TSLA 385.68, -12.82, -3.22%). SpaceX (SPCX 137.22, -4.10, -2.90%), which is not yet a component of the S&P 500, is another mega-cap laggard.

Meanwhile, Apple (AAPL 353.36, +21.46, +6.47%) and Microsoft (MSFT 554.62, +33.63, +6.46%) are standouts, helping the information technology sector (+2.1%) move firmly higher despite relative weakness in semiconductor stocks. The PHLX Semiconductor Index is down 0.8% amid concerns that Democratic control of the House and Senate could slow the pace of AI data center development.

That weakness extends to the industrials sector (-1.6%), which is facing considerable weakness in electrical product names, engineering and construction names, and other stocks closely tied to data center construction.

The utilities sector (-0.9%) also holds a modest loss, though the eight S&P 500 sectors that trade higher comfortably outweigh this morning's pockets of weakness.

On the data front, the final October S&P Global U.S. Services PMI came in at 56.1, down from the preliminary reading of 57.9.

The October ISM Non-Manufacturing Index came in at 54.5 (Briefing.com consensus 54.8), down from 54.9 in September.

The stock market is on track for a higher open this morning as the conclusion of the midterm elections helps ease political uncertainty, while declining oil prices provide additional support for investor sentiment.

On the data front, the ADP Employment Change report for October showed private-sector employment increased by 86,000 jobs (Briefing.com consensus: 75,000) following a downwardly revised 86,000 (from 90,000) in September, with employers of all sizes hiring. The bulk of the hiring, however, remained in the service-providing sector (82,000).

The Census Bureau reported that the trade deficit narrowed to $105.0 billion in September (Briefing.com consensus: -$108.4 billion) from a downwardly revised $105.7 billion (from -$105.6 billion) in August. Exports were $5.8 billion more than August exports, and imports were $5.2 billion more than August imports.

The key takeaway from the report is that computers and computer accessories were the big drivers of the increase in both exports and imports.

Stocks remain on track for a higher open, with the S&P 500 futures currently trading 90 points above fair value. 

Asian markets finished mixed on Wednesday, with Chinese equities staging a sharp rebound on additional policy support while Japanese technology shares remained under pressure amid uncertainty surrounding the U.S. election outcome and AI investment outlook. Japan's Nikkei fell 1.4% after plunging nearly 5% intraday, with Taiyo Yuden (-8%), Kioxia Holdings (-5%), Advantest (-3%), Tokyo Electron (-3%), and SoftBank Group (-3%) extending the semiconductor-led retreat. China's Shanghai Composite rallied 2.2% and the Shenzhen Component surged 4.2% after the PBOC announced additional support for equity purchases, helping reverse Tuesday's technology selloff as Eoptolink Technology (+13%), Zhongji Innolight (+11%), Cambricon Technologies (+10%), Hygon Information Technology (+10%), NAURA Technology (+10%), and SMIC (+9%) rebounded. Hong Kong's Hang Seng advanced 1.7% alongside mainland equities, although China's October services PMI slowed to 50.8 from 51.6, falling short of expectations and suggesting that the market recovery is being driven more by policy support than improving economic momentum. South Korea's KOSPI finished 0.6% higher after swinging from a 2.4% advance to a 4.0% decline intraday, with SK Hynix (+1%), Samsung Electronics (flat), and financial shares helping offset losses in LG Energy Solution (-6%) and Samsung Biologics (-2%). The violent reversals in Chinese technology shares and Korea's intraday swings underscore how quickly positioning is shifting even as concerns over AI valuations and U.S. technology policy remain unresolved. Australia's services PMI slipped into contraction at 48.5, while New Zealand's unemployment rate rose to 5.7% as employment unexpectedly declined. India's Sensex gained 0.5%, extending its recent relative strength despite a softer-than-expected services PMI reading.

• In economic data:
  • China's October RatingDog Services PMI fell to 50.8 (expected 51.7) from 51.6.
  • Hong Kong's October S&P Global PMI rose to 50.2 from 49.2.
  • India's October HSBC Services PMI rose to 55.8 (expected 56.2) from 55.2, while the Composite PMI increased to 56.2 (expected 56.7) from 55.9.
  • Australia's October S&P Global Services PMI fell to 48.5 (expected 47.8) from 51.9, while the Composite PMI dropped to 48.2 (expected 47.7) from 51.3.
  • New Zealand's Q3 unemployment rate rose to 5.7% (expected 5.5%) from 5.6%; employment declined 0.1% q/q (expected +0.4%; prior +0.3%), while the Labor Cost Index increased 0.4% q/q (expected +0.5%; prior +0.7%) and 2.0% yr/yr (expected +2.1%; prior +2.1%).

European markets trade sharply higher as the Democratic sweep of both chambers of Congress in the U.S. midterm elections lifts global sentiment, with falling bond yields providing additional support amid expectations of greater constraints on the Trump administration's legislative agenda. Germany's DAX climbs 1.5%, led by Heidelberg Materials (+8%) following better-than-expected quarterly results and increased cost-efficiency targets, while Continental (+6%) raises its margin and cash flow outlook and Deutsche Bank (+5%) and Commerzbank (+5%) benefit from strength in financial shares. France's CAC 40 gains 1.6%, with Societe Generale (+3%), BNP Paribas (+2%), and Credit Agricole (+2%) advancing despite a sharp deterioration in domestic business activity, while Thales (-4%) and Dassault Systemes (-2%) lag. London's FTSE 100 rises 1.2% ahead of Thursday's Bank of England policy decision, although Smith & Nephew (-2%) retreats after cutting its full-year guidance and Marks & Spencer (-1%) slips despite stronger first-half sales. Eurozone headline inflation accelerates to 4.0% yr/yr in October while core inflation holds at 2.5%, and the region's services PMI slows to 51.4 as France falls into contraction, contrasting with continued expansion in Germany, Italy, and Spain. The STOXX Europe 600 advances 1.5%, with Italy's FTSE MIB up 2.3% and Spain's IBEX 35 surging 2.9%, underscoring the breadth of the rebound despite mixed economic signals.

• In economic data:
  • Eurozone October CPI increased 4.0% yr/yr (expected +4.0%; prior +3.8%) and 0.4% m/m (expected +0.4%; prior +0.6%), while core CPI rose 2.5% yr/yr (expected +2.5%; prior +2.5%).
  • Eurozone October HCOB Services PMI fell to 51.4 (expected 51.7) from 53.0, while the Composite PMI declined to 51.7 (expected 51.9) from 53.1.
  • Germany's October HCOB Services PMI eased to 52.5 (expected 51.7) from 52.9, while the Composite PMI slipped to 53.4 (expected 52.8) from 53.8.
  • France's October HCOB Services PMI fell to 46.2 (expected 48.4) from 51.2, while the Composite PMI dropped to 46.6 (expected 48.4) from 51.1.
  • Italy's October HCOB Services PMI rose to 52.0 (expected 51.4) from 51.7, while the Composite PMI edged down to 50.8 from 51.0.
  • Spain's October HCOB Services PMI fell to 57.2 (expected 57.6) from 58.3.
  • Spain's October unemployment change increased by 43.1K (expected +18.7K; prior +23.6K).
  • The U.K.'s October S&P Global Services PMI rose to 52.8 (expected 53.1) from 52.1, while the Composite PMI increased to 52.9 (expected 53.1) from 52.0.

The S&P 500 futures currently trade 57 points above fair value.

Private sector employment increased by 86,000 in October (Briefing.com consensus 75,000) following a downwardly revised increase of 86,000 in September (from 90,000), according to the ADP Employment Change report.

The September trade deficit narrowed to $105.0 billion (Briefing.com consensus $108.4 billion) from an upwardly revised $105.7 billion in August (from $105.6 billion).

Equity futures point to a mostly higher open this morning following the midterm elections, which saw Democrats flip control of both the House and Senate. The results have helped remove some political uncertainty, with President Trump congratulating Democrats on their victories and expressing a willingness to work with the incoming congressional leadership, while emphasizing that he retains veto power, according to CBS News. The shift in congressional control could reshape expectations for fiscal policy and the administration's legislative agenda.

Crude oil prices are also moving lower after President Trump indicated that he has no immediate plans to launch military strikes against Iran, according to the Financial Times. The comments are providing some relief from concerns about further escalation in the Middle East and elevated energy prices. The major averages finished mostly higher on Tuesday, although gains were concentrated in semiconductor and mega-cap technology stocks as investors returned to the AI trade following Monday's sharp selloff.

Another round of corporate earnings is also drawing attention this morning, particularly Advanced Micro Devices (AMD 482.29, -1.61, -0.33%), which surged nearly 10% immediately following its earnings release yesterday evening but has since surrendered those gains and is trading near its flat line in premarket action.

On the U.S. data front:

• 10/31 MBA Mortgage Applications Index -1.2%; prior 3.4%

Today's remaining economic calendar:

• 8:15 AM ET: October ADP Employment Change; Briefing.com consensus 75K; prior 90K
• 8:30 AM ET: September Trade Balance; Briefing.com consensus -$108.4B; prior -$105.6B
• 9:45 AM ET: October S&P Global U.S. Services PMI - Final; prior 57.9
• 10:00 AM ET: October ISM Non-Manufacturing Index; Briefing.com consensus 54.8; prior 54.9
• 10:30 AM ET: 10/31 EIA Crude Oil Inventories; prior -1.892M

In corporate news:

• Advanced Micro Devices (AMD 482.29, -1.61, -0.33%) beat third-quarter earnings and revenue estimates, with record Data Center revenue, and guided fourth-quarter revenue above consensus.
• Amgen (AMGN 479.00, +17.74, +3.85%) exceeded third-quarter earnings and revenue estimates and raised its FY26 EPS outlook to a range in line with consensus.
• McDonald's (MCD 267.00, +3.96, +1.51%) beat the third-quarter earnings estimate but missed on revenue. Global comparable sales increased, while U.S. comparable sales declined.
• Palantir (PLTR 167.11, -8.29, -4.73%) will deploy Foundry and AIP across Changshin's footwear development and production operations to connect workflows from sample planning through factory execution.

Reviewing overnight developments:

Asian markets finished mixed. According to Nikkei, Chinese equities rebounded on additional policy support, while Japanese technology shares remained under pressure amid uncertainty surrounding the U.S. election outcome and the AI investment outlook.

In news:

• Nikkei reported that the PBOC announced additional support for equity purchases, helping Chinese technology shares recover from Tuesday's selloff.
• According to Nikkei, South Korean shares ended higher after a volatile session, with semiconductor and financial shares offsetting weakness elsewhere.

In economic data:

• China's October RatingDog Services PMI 50.8 (expected 51.7; prior 51.6)
• Hong Kong's October S&P Global PMI 50.2 (prior 49.2)
• India's October HSBC Services PMI 55.8 (expected 56.2; prior 55.2); Composite PMI 56.2 (expected 56.7; prior 55.9)
• Australia's October S&P Global Services PMI 48.5 (expected 47.8; prior 51.9); Composite PMI 48.2 (expected 47.7; prior 51.3)
• New Zealand's Q3 Unemployment Rate 5.7% (expected 5.5%; prior 5.6%); Employment Change -0.1% q/q (expected +0.4%; prior +0.3%); Labor Cost Index +0.4% q/q (expected +0.5%; prior +0.7%) and +2.0% yr/yr (expected +2.1%; prior +2.1%)

Equity Markets:

• Japan's Nikkei : -1.4%
• Hong Kong's Hang Seng : +1.7%
• China's Shanghai Composite : +2.2%
• India's Sensex : +0.5%
• South Korea's Kospi : +0.6%
• Australia's All Ordinaries : -0.6%

European markets are broadly higher, with lower bond yields providing support. Financial shares are among the stronger groups, while the region's economic data present a mixed picture.

In news:

• Germany's Heidelberg Materials raised its cost-efficiency targets, while Continental increased its margin and cash flow outlook.
• The Bank of England will announce its policy decision on Thursday.

In economic data:

• Eurozone October CPI +4.0% yr/yr (expected +4.0%; prior +3.8%) and +0.4% m/m (expected +0.4%; prior +0.6%); Core CPI +2.5% yr/yr (expected +2.5%; prior +2.5%) Eurozone October HCOB Services PMI 51.4 (expected 51.7; prior 53.0); Composite PMI 51.7 (expected 51.9; prior 53.1)
• Germany's October HCOB Services PMI 52.5 (expected 51.7; prior 52.9); Composite PMI 53.4 (expected 52.8; prior 53.8)
• France's October HCOB Services PMI 46.2 (expected 48.4; prior 51.2); Composite PMI 46.6 (expected 48.4; prior 51.1)
• Italy's October HCOB Services PMI 52.0 (expected 51.4; prior 51.7); Composite PMI 50.8 (prior 51.0)
• Spain's October HCOB Services PMI 57.2 (expected 57.6; prior 58.3); Unemployment Change +43.1K (expected +18.7K; prior +23.6K) U.K. October S&P Global Services PMI 52.8 (expected 53.1; prior 52.1); Composite PMI 52.9 (expected 53.1; prior 52.0)

Equity Markets:

• STOXX Europe 600 : +1.5%
• Germany's DAX : +1.5%
• U.K.'s FTSE 100 : +1.2%
• France's CAC 40 : +1.6%
• Italy's FTSE MIB : +2.3%
• Spain's IBEX 35 : +2.9%

[BRIEFING.COM] The stock market finished Tuesday's session on a mixed note, with a rebound in semiconductor and mega-cap technology stocks lifting the S&P 500 (+0.4%) and Nasdaq Composite (+0.8%), while the DJIA (-0.4%) ended lower. The gains represented a partial recovery from Monday's technology-led selloff, although participation was considerably weaker than yesterday, when strength across much of the broader market contrasted with pronounced losses in technology stocks.

The major averages traded in relatively narrow ranges for much of the morning before the S&P 500 and Nasdaq reached their session highs early in the afternoon, climbing as much as 0.7% and 1.2%, respectively. Some of that strength faded later in the session as semiconductor stocks surrendered a portion of their earlier gains. The DJIA remained in negative territory throughout the day, reflecting the uneven nature of the rebound.

The information technology sector (+1.3%) led the four S&P 500 sectors that finished higher, supported by renewed buying interest in semiconductor stocks following Monday's sharp retreat. The PHLX Semiconductor Index (+2.6%) recovered a substantial portion of yesterday's 3.4% decline, although it finished below its best levels of the session. NVIDIA (NVDA 206.69, +4.63, +2.29%) was among the mega-cap standouts, while Advanced Micro Devices (AMD 483.90, +17.06, +3.65%) also rallied ahead of its quarterly earnings report after today's close.

AMD's results represent another important test for the AI trade following recent concerns about elevated infrastructure spending and growth expectations. Investors will be particularly focused on the company's Q4 outlook, Data Center revenue growth, supply availability, and the ramp of its Helios AI infrastructure platform.

The technology sector's advance came despite earnings-related weakness in Apple (AAPL 331.90, -6.42, -1.90%) and Palantir Technologies (PLTR 175.40, -2.94, -1.65%). Apple declined despite reporting better-than-expected quarterly results and strong iPhone and Mac sales, as concerns about slowing Services revenue growth, rising memory costs, and additional AI development expenses overshadowed the results. Palantir also faced selling pressure despite strong earnings and upbeat guidance, with investors focusing on a sharp slowdown in bookings growth.

The industrials sector (+1.0%) was another notable outperformer, benefiting from strength in electrical equipment and power infrastructure companies alongside the semiconductor rebound. GE Vernova (GEV 918.20, +55.95, +6.49%) and Bloom Energy (BE 214.01, +17.76, +9.05%) were among the standouts, reflecting continued investor interest in companies positioned to benefit from the expansion of AI infrastructure.

The communication services sector (+0.9%) also finished higher, aided by strength in Meta Platforms (META 621.03, +14.30, +2.36%). The company reportedly plans to raise at least $20 billion in an upcoming bond sale, according to The Wall Street Journal, highlighting the substantial financing requirements associated with AI infrastructure development. The Vanguard Mega Cap Growth ETF (+0.9%) reflected the broader recovery among large growth-oriented companies, while the real estate sector (+0.2%) was the only other S&P 500 sector to finish in positive territory.

Outside these areas, the broader market struggled to participate in the advance. The materials (-1.9%) and consumer staples (-1.8%) sectors were the biggest laggards, reversing some of their outperformance from Monday's session. The consumer staples sector faced additional pressure from disappointing earnings-related developments, with Sysco (SYY 74.11, -7.63, -9.33%) and ADM (ADM 70.60, -5.17, -6.82%) declining following weaker-than-expected quarterly revenue. Keurig Dr Pepper (KDP 34.74, -2.08, -5.65%)) also traded lower despite beating earnings and revenue expectations, as concerns about a slower recovery in its U.S. coffee business weighed on sentiment.

The narrow leadership was particularly evident in the S&P 500 Equal Weighted Index (-0.4%), which underperformed its market-cap-weighted counterpart after outperforming substantially yesterday. The Russell 2000 (+0.2%) and S&P Mid Cap 400 (+0.2%) managed to finish modestly higher, although both surrendered the bulk of their earlier gains as buying interest faded across the broader market.

Crude oil experienced a volatile session, initially recovering some of Monday's steep decline overnight before retreating sharply in the morning. Prices subsequently recovered from their session lows, with WTI crude ultimately settling $0.35 lower (-0.4%) at $96.16 per barrel. The energy sector (-0.8%) was among the relative laggards.

Tuesday's trading reinforced the market's rapidly shifting leadership, with investors returning to semiconductor and AI-related stocks just one day after those same groups suffered substantial losses. The rebound provided enough support to lift the S&P 500 and Nasdaq, but weakness across most sectors and the underperformance of the equal-weighted index underscored the limited breadth of the advance. With AMD's earnings due after the close and additional corporate results on Wednesday's calendar, investors will be looking for further evidence that AI infrastructure demand can support elevated growth expectations and substantial capital investment commitments.

U.S. Treasuries pulled back from their recent strength on midterm Election Day with longer tenors leading the retreat after outperforming on Monday. The 2-year note yield settled up three basis points to 4.62%, and the 10-year note yield settled up six basis points to 4.95%. 

• Russell 2000: +13.3% YTD
• S&P Mid Cap 400: +12.0% YTD
• S&P 500: +10.6% YTD
• Nasdaq Composite: +9.2% YTD
• DJIA: +7.8% YTD

Reviewing today's data: 

• Factory orders increased 1.8% month-over-month in September (Briefing.com consensus: 1.2%) following an upwardly revised 0.3% increase (from 0.1%) in August. Excluding transportation, factory orders increased 1.3% on the heels of a 0.4% increase in August. Shipments of manufactured goods jumped 1.3% after a 0.1% increase in August.
  • The key takeaway from the report is that the increase in new order activity was broad-based in September. Orders for transportation equipment, primary metals, fabricated metal products, machinery, and computers and electronic products were all up month-over-month.
• Sep JOLTs - Job Openings 7.523M (Briefing.com consensus 7.100M; Prior 7.190M revised from 7.079M)