S&P 500 Futures Gain With All Eyes on U.S. Inflation Data; ASML Earnings Fail to Lift Chip Stocks

December S&P 500 E-Mini futures (ESZ26) are up +0.25% this morning, buoyed by lower bond yields, while investors look ahead to key U.S. inflation data for clues on the Federal Reserve’s interest-rate path.

The price of WTI crude rose over +1% on Wednesday as traders weighed rising tensions in the Middle East. Iran-backed Houthi rebels carried out missile and drone attacks across Saudi Arabia, including a strike that damaged Saudi Aramco’s headquarters. U.K. Maritime Trade Operations also reported an attack on Tuesday in which a tanker was hit by an unidentified projectile in the Strait of Hormuz.

Despite rising oil prices, Treasuries extended their rebound. The 10-year T-note yield fell two basis points to 5.20%.

Meanwhile, December Nasdaq 100 E-Mini futures (NQZ26) were little changed as chip and AI infrastructure stocks slipped in pre-market trading after earnings from ASML Holding N.V. failed to revive enthusiasm for the sector. The Dutch chip-equipment maker raised its full-year sales guidance for the third time this year and said it would be unable to fully meet demand over the next two years. Sandisk (SNDK) was down over -2%, while Micron Technology (MU) and Intel (INTC) each fell more than -1%.

In yesterday’s trading session, Wall Street’s major indexes ended in the red, weighed down by weakness in chipmakers. Most chip and AI infrastructure stocks declined amid mounting worries about the outlook for AI, with Micron Technology (MU) and KLA Corp. (KLAC) falling over -3%. Also, Applied Materials (AMAT) slumped over -6% and was the top percentage loser in the S&P 500 and Nasdaq 100 after the chip-equipment maker’s investor day forecast lacked concrete details. In addition, Johnson & Johnson (JNJ) slid more than -5% and was the top percentage loser in the Dow after the healthcare giant reported weaker-than-expected Q3 MedTech sales. On the bullish side, Meta Platforms (META) rose over +2% and was the top percentage gainer in the Nasdaq 100 as analysts remained upbeat following the release of the company’s latest AI models, Muse Wonder and Muse Wonder Full.

Economic data released on Tuesday showed that U.S. existing home sales unexpectedly rose +1.5% m/m to a seasonally adjusted annual rate of 3.99 million units in September, stronger than expectations of 3.95 million units.

Investors also digested the latest remarks from Fed officials. New York Fed President John Williams told Bloomberg News on Tuesday that he continues to view one additional interest-rate hike as appropriate this year, but sees no need for the central bank to raise rates further in 2027. Also, Fed Governor Christopher Waller said the sharp rise in long-term Treasury yields is helping to dampen demand in interest-rate-sensitive sectors such as housing and automobiles, effectively doing some of the work of tighter monetary policy. In addition, Chicago Fed President Austan Goolsbee said in a Semafor interview that inflation is beginning to look like “aggregate overheating” driven by spillover effects from the AI investment boom, rather than primarily reflecting supply shocks that will fade on their own. When asked whether the Fed should keep raising interest rates, Goolsbee said, “So if inflation remains persistent, then I think it’s clear what the Fed has to do. If we can get some evidence that this tariff inflation is going away, that the oil shock inflation is going away, it’s not too much progress that we need to show, but we need to start showing some progress if we’re going to get back on the kind of rate-cutting path that we were on.”

U.S. rate futures are currently pricing in a 78.4% chance of no rate change and a 21.6% chance of a 25-basis-point rate hike at the conclusion of the Fed’s October meeting.

Today, all eyes are on the U.S. consumer inflation report for September, which is set to be released in a couple of hours. Economists expect the consumer price index to rise +0.6% m/m in September, driven by higher gasoline prices, which would mark the biggest increase in five months. On an annual basis, headline inflation is projected to accelerate to +3.6% in September from +3.4% in August. The core CPI, which strips out the more volatile food and energy prices, is expected to rise +0.2% m/m and +2.5% y/y in September, compared with +0.3% m/m and +2.4% y/y in August. A slower monthly pace of core inflation could give the Fed enough reason to hold off on raising rates this month, particularly after weaker September payroll growth.

The S&P 500 Index is expected to move 0.75% in either direction today, according to options-market data compiled by Citigroup.

Market participants will also be awaiting remarks from Fed Vice Chair for Supervision Michelle Bowman and Richmond Fed President Tom Barkin.

In addition, the Fed will release its Beige Book survey of regional business contacts today, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.

Third-quarter corporate earnings season picks up steam, with investors awaiting reports today from major U.S. banks such as Bank of America (BAC) and Morgan Stanley (MS), as well as notable companies like BlackRock (BLK), Progressive (PGR), and Fastenal (FAST). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +25% jump in quarterly earnings for Q3 from a year earlier.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 5.20%, down -0.48%.

The Euro Stoxx 50 Index is up +0.52% this morning, rebounding from the previous session’s losses. Technology stocks were among the biggest gainers on Wednesday, boosted by a more than +2% gain in ASML Holding N.V. (ASML.NA) after the world’s biggest supplier of chipmaking equipment lifted its full-year sales guidance for the third time this year. Real estate, chemical, and construction stocks also advanced. Final data from INE released on Wednesday showed that Spain’s annual inflation rate picked up to 4.9% in September, confirming preliminary estimates. Meanwhile, Eurozone government bond yields edged lower on Wednesday, tracking a drop in Treasury yields. European Central Bank Governing Council member Pierre Wunsch said on Wednesday that the central bank would probably need to raise interest rates further, but added, “I’m not making any bet anymore because we have so much uncertainty on the energy front, maybe also AI.” Traders anticipate that the ECB will leave interest rates unchanged at its October meeting but are pricing in an 81% probability of a rate hike in December. In other corporate news, Orsted (ORSTE.C.DX) fell over -2% after Bloomberg News reported that the U.S. would reassess the permit for its wind farm off Rhode Island.

Spain’s CPI was released today.

The Spanish September CPI rose +0.3% m/m and +4.9% y/y, in line with expectations.

Asian stock markets today closed in the red. China’s Shanghai Composite Index ($CHSC) closed down -0.88%, and Japan’s Nikkei 225 Stock Index ($NKY) closed down -0.05%.

China’s Shanghai Composite Index closed lower today as a selloff in tech shares resumed, while investors digested the country’s inflation and trade data. AI-related supply chain stocks slumped on Wednesday. At the same time, energy-related stocks advanced, helping to limit losses in the benchmark index. Data from the National Bureau of Statistics released on Wednesday showed that China’s producer prices rose at their fastest pace since June 2022 in September, partly fueled by soaring energy costs and a low comparison base, while consumer inflation also picked up, though slightly less than expected. Separately, data showed that China’s export growth accelerated to its fastest pace since February in September, keeping the country on track to exceed last year’s record trade surplus. Meanwhile, BofA chief economist for Greater China Helen Qiao said on Wednesday that China could introduce additional economic stimulus if data due next week show that third-quarter growth weakened beyond Beijing’s tolerance. “If the third-quarter data look bad, the government could introduce another package of measures to send a stronger message that policies are turning,” Qiao said. Doubts were mounting over the prospect of substantial stimulus measures to bolster the economy and restore investor confidence. HSBC analysts lowered their year-end 2026 targets for the Shanghai Composite, CSI 300, and Shenzhen Composite indexes by 9% to 15%.

The Chinese September CPI rose +0.2% m/m and +0.9% y/y, weaker than expectations of +0.3% m/m and +1.0% y/y.

The Chinese September PPI rose +5.0% y/y, stronger than expectations of +4.4% y/y.

The Chinese September Trade Balance came in at $133.53 billion, stronger than expectations of $116.8 billion.

The Chinese September Exports surged +36.3% y/y, stronger than expectations of +25.5% y/y.

The Chinese September Imports jumped +31.0% y/y, stronger than expectations of +24.5% y/y.

Japan’s Nikkei 225 Stock Index reversed earlier gains and closed just below the flatline today. Sentiment was initially buoyed by dovish remarks from New York Fed President John Williams, sending the Nikkei up as much as 0.93%. Chip-related stocks climbed early in the session, attempting to rebound from the previous day’s losses. However, chipmakers gave up their gains and turned lower by the close after chip-equipment maker ASML Holding N.V. said it couldn’t fully meet demand, reigniting worries about the AI trade. “The Nikkei reversed gains as markets saw ASML shares falling on proprietary trading systems after earnings,” said Kazuaki Shimada at IwaiCosmo Securities. Losses in financial and healthcare stocks also weighed on the benchmark index. Meanwhile, Japanese government bond yields were mixed on Wednesday, with most paring gains after a five-year bond auction saw solid demand. Bloomberg reported on Tuesday that Bank of Japan officials are inclined to avoid a rare back-to-back interest-rate hike this month, while keeping open the possibility of another increase as early as December. Investor focus now turns to remarks from BOJ board member Junko Koeda and Deputy Governor Shinichi Uchida for further clues on the timing of the central bank’s next rate hike. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.63% at 28.09.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks slipped in pre-market trading as earnings from ASML Holding N.V. failed to revive investor enthusiasm for the sector. Sandisk (SNDK) was down over -2%, while Micron Technology (MU) and Intel (INTC) each fell more than -1%.

Hewlett Packard Enterprise (HPE) slid over -4% and Dell Technologies (DELL) fell more than -3% in pre-market trading after Barclays downgraded both stocks to Equal Weight from Overweight.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - October 14th

Bank of America (BAC), Morgan Stanley (MS), BlackRock (BLK), The Progressive Corporation (PGR), Fastenal Company (FAST), State Street (STT), Home BancShares (HOMB), Equity Bancshares (EQBK).

On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.