US stock outlook | The three major stock index futures had mixed ups and downs, and Google's performance fell after falling. US PCE and third-quarter GDP hit tonight, Amazon and Intel will be listed after the market

Pre-market market trends

1. Before the US stock market on October 29 (Thursday), futures for the three major US stock indexes had mixed ups and downs. As of press release, Dow futures were up 0.02%, S&P 500 futures were down 0.15%, and NASDAQ futures were down 0.92%.

2. As of press release, the German DAX index rose 1.06%, the UK FTSE 100 index rose 0.48%, the French CAC40 index rose 1.03%, and the European Stoxx 50 index rose 0.40%.

3. As of press release, WTI crude oil fell 1.31% to $101.43 per barrel. Brent crude oil fell 1.33% to $110.16 per barrel.

Market news

US GDP for the third quarter and PCE for September are coming soon! Tonight, the US Bureau of Economic Analysis will simultaneously release the preliminary GDP value for the third quarter and the PCE data for September. The implementation of these two major figures coincided with the Federal Reserve's announcement that it would maintain the federal funds rate target range of 3.75% to 4.00% unchanged. The market generally expects that the US real GDP annualized quarterly rate in the third quarter will accelerate sharply to 3.2% from 2.2% in the second quarter. As the Federal Reserve's preferred inflation indicator, the PCE price index is likely to exceed the official target of 2% for the 68th consecutive month in September, which means that high inflation has continued for nearly six years. The market expects that due to the rise in crude oil prices, the nominal PCE is expected to rise 0.5% month-on-month in September, and the year-on-year growth rate will rebound from 3.4% last month to the 3.6% to 3.7% range. The core PCE, which excludes food and energy, is more likely to reflect the continuing inflationary pressure in the service sector and other sectors. The market expects the core PCE to rise 0.3% month-on-month in September, and the year-on-year growth rate will rise slightly from 3.0% to 3.1%. If GDP eventually exceeds 3.2% in the third quarter and the core PCE exceeds 3.1%, this combination will send a double signal of a strong economy and accelerated inflation. If there is no substantial deterioration in the job market before the monetary policy meeting on December 8-9, it will be difficult for Federal Reserve officials to find a reason to postpone further tightening.

Inflation peaked in six years, and two negative votes forced the palace: the Federal Reserve's interest rate hike in December has already “gone up”; will it happen again in March next year? Federal Reserve Chairman Walsh on Wednesday kept the Federal Reserve on the path of raising interest rates again this year, even though he insisted on refusing to give any clear guidance on the future policy path. Within its self-established communication boundaries, Walsh used his assessment of a strong economy and a warning of continued inflation to send a signal to the outside world that the Federal Reserve's mission was unfinished. This statement strengthened market expectations: after being put on hold on Wednesday, officials will raise borrowing costs in December, and may raise interest rates again in early 2027. For Brett Ryan, a senior US economist at Deutsche Bank, Walsh's refusal to call financial conditions “tight,” and his optimistic assessment of growth actually confirmed the “interest rate will be raised again this year” path in the Federal Reserve's September forecast. “He is saying they will tighten further, but nothing is clear.”

Nomura Kenpo reveals the decline of the “AI Growth Panic”! Profit cashout resonates with capital flow relays, and the AI computing power theme is leading technology stocks to fight back. According to the latest research report released by Nomura cross-asset strategist Charlie McEligot, the topic of transactions surrounding AI is breaking away from the previous round of fears about AI's surging financing costs, overcrowded positions, and the accelerated deleveraging process of hedge funds. The strategist stressed that large-scale AI financing was accepted, the semiconductor giants and the two major cloud computing giants generally handed over strong performance, and the disclosure of Anthropic's listing application, which together mitigated the “AI growth panic” that continued for two weeks. The clearance of crowded positions and excessive leverage also created conditions for market recovery.

The situation in the Middle East is once again tightening: Iran rejects the draft armistice, and it is revealed that the US is planning military action against Iraq after the election. According to media reports, Tehran could not accept the draft armistice plan submitted by Qatar this week and made it clear that it would not make any concessions on the nuclear issue; the US has notified several Gulf Arab countries through diplomatic and military channels to prepare for a “short but intense military operation” after the US midterm elections (November 3). The week before, the Houthis launched multiple missile and drone attacks on the Saudi Ministry of Defense, two international airports, and oil facilities. The cost of chartering an oversized tanker from the Arabian Gulf to the Mediterranean had doubled from $16 to $32 per barrel.

Individual stock news

AI spawns “light” mergers and acquisitions: MRVL.US (MRVL.US) wants to swallow Lumentum (LITE.US) or rank in the top ten biggest deals in technology history. According to people familiar with the matter, Maywell Technology is in in-depth negotiations to acquire data center optical device manufacturer Lumentum. In the race to expand the scale of the artificial intelligence field, this is expected to be a heavyweight deal. If Lumentum is successfully acquired, the deal is likely to rank among the top ten largest technology and telecom mergers and acquisitions in history. Lumentum produces lasers and other optical technology to transfer massive amounts of data at extremely high rates. This hardware supports the boom in artificial intelligence, enabling data centers and telecommunications companies to transfer information between servers, facilities, and other locations. Maywell is a semiconductor manufacturer that purchases lasers from Lumentum, so the deal is expected to streamline its supply chain. Maywell has been increasing its bet on optical and photonic technology to connect data center devices. Earlier this year, the company bought photonics company Celestial AI. As of press release, before the US stock market on Thursday, Maywell Technology fell more than 11%, and Lumentum rose nearly 6%.

Alphabet (GOOGL.US)'s Q3 cloud business revenue surged 103% year over year, free cash flow changed from positive to negative, and pre-market stock prices plummeted. According to financial reports, Alphabet Q3's total revenue was 127.6 billion US dollars, up 25% year on year, but lower than market expectations of 128.2 billion US dollars; operating profit of 40.6 billion US dollars, up 30% year on year; earnings per share were 2.12 US dollars, lower than market expectations of 2.99 US dollars. Google's cloud business became the biggest highlight of the quarter, with revenue reaching US$30.709 billion, surging 103% from US$15.157 billion in the same period last year, to a record high. According to Google, the strong growth in the cloud business is mainly due to the continued expansion of demand for AI infrastructure, enterprise AI solutions, and core cloud services under the Google Cloud Platform (GCP). In addition, sales of TPU systems also contributed significantly to revenue growth. Google is building AI infrastructure for itself and its customers, driving capital expenditure to record levels. Investors are putting increasing pressure on the company to prove that these expenses are paying off. The company's Q3 equity investment resulted in a loss of US$8.7 billion, reducing net profit. This is in stark contrast to the investment income recorded a year ago and the huge return received in the second quarter (the earnings for the second quarter came largely from its shares in SpaceX and Anthropic). Free cash flow for the quarter was negative $9.1 billion due to increased TPU inventories and $5.2 billion in EU fines, and was negative for two consecutive quarters. The company maintains the 2026 annual capital expenditure guideline of US$195 billion to US$205 billion, and it is expected that capital expenditure will continue to increase significantly in 2027. As of press release, Alphabet's US stocks fell nearly 11% before the market on Thursday.

Microsoft (MSFT.US) Q1 revenue increased 19% year over year to nearly US$92.3 billion, while Azure revenue surged 48%. According to the data, the company's revenue for the quarter reached US$92.279 billion, up 19% year on year, and the growth rate was 17% higher than market expectations; non-GAAP adjusted net profit reached US$36.422 billion, up 18% year on year; adjusted earnings per share were US$4.89, up from US$4.13 in the same period last year, up 18% year on year. The cloud computing business continues to be an important driver of Microsoft's performance growth. In the first fiscal quarter, Microsoft Azure's revenue reached US$33.165 billion, up 48% from US$22.384 billion in the same period last year. The growth rate was also higher than market expectations of 44%, reflecting the continued expansion of corporate demand for cloud computing and artificial intelligence infrastructure. In terms of cash flow, Microsoft's cash flow from operating activities reached US$58 billion in the first fiscal quarter, an increase of about 29% over US$45.57 billion in the same period last year. At the same time, the company continues to increase investment in infrastructure. The quarter's capital expenditure for the purchase of property and equipment reached US$39.367 billion, an increase of about 103% over US$19.394 billion in the same period last year. As of press release, Microsoft's US stocks rose nearly 2% before the market on Thursday.

DoorDash (DASH.US officially announced the acquisition of Instacart. The two parties agreed to buy Instacart at a price of $65 per share, with a total equity value of approximately $17 billion. At least 75% of the total transaction will be paid in cash, and Instacart shareholders can choose cash, DoorDash shares, or both.

AI foundry and advanced packaging went hand in hand. KLAC.US's revenue increased for ten consecutive quarters, and the Q2 guidelines exceeded expectations. According to financial reports, the company's revenue for the quarter was $4,136 billion, up 28.9% year over year, higher than market expectations of $4.04 billion — revenue has been growing year over year for 10 consecutive quarters; non-GAAP diluted earnings per share were $1.22, higher than the forecast of $1.18. The guideline is the biggest highlight of this financial report: the company expects revenue of 4.7 billion ± 200 million US dollars for the December quarter, which is about 4.8% higher than the market's consensus forecast, implying a year-on-year growth rate of about 42.5%;; the non-GAAP diluted earnings per share guide is 1.44 ± 0.11 US dollars, which is also higher than expected. The median value of the guideline increased by about 14% month-on-month compared to this quarter's revenue, indicating that the company has strong confidence in the sustainability of AI-driven demand. As of press release, Kelei's US stocks rose nearly 4% in the premarket on Thursday.

ServiceNow (NOW.US) Q3 net profit fell nearly 45% year over year to US$277 million. According to the data, the company's revenue for the quarter reached US$4.106 billion, up 20.5% year on year, up 20% at a fixed exchange rate; GAAP net profit was US$277 million, down about 45% from US$502 million in the same period last year; and GAAP diluted earnings per share were US$0.27, down from US$0.48 in the same period last year. As ServiceNow's main revenue source, the third quarter revenue of the subscription business reached US$3,988 billion, up 21% year over year and 20.5% at a fixed exchange rate. Revenue from professional services and other businesses was $118 million, up 10% year over year. By the end of September, the company's current remaining performance obligation (CrPO) reached US$13.65 billion, an increase of 20.5% over the previous year; the total remaining performance obligation (RPO) reached US$29.7 billion, an increase of 22% over the previous year. The AI business became an important highlight of ServiceNow's earnings report for this quarter. The company announced that it will further raise the 2026 AI annual contract value (ACV) target to US$1.7 billion, a 70% increase from the US$1 billion target set at the beginning of the year. This is also the second time this year that ServiceNow has raised this target. As of press release, ServiceNow US stocks fell nearly 19% before the market on Thursday.

FTNT.US (FTNT.US)'s Q3 performance exceeded expectations, but it plummeted before the market. Financial reports show that Feita achieved total revenue of US$2.08 billion in the third quarter, up 20% year on year, exceeding market expectations of US$2.06 billion; bills (Billings) reflecting on-hand orders reached US$2.34 billion, up 29% year on year. Notably, the year-on-year revenue growth rate was 20%. Although the absolute value is not low, there are signs of slowing down compared to the previous quarter. Non-GAAP diluted earnings of $0.91 per share were higher than market expectations of $0.86. Cash flow is another highlight of this financial report. In the third quarter, operating cash flow reached US$946 million, free cash flow of US$865 million, and the free cash profit margin reached 41.6%. The company raised the 2026 revenue guidance to $8.125 billion to US$8.215 billion, and the bill amount guidance to US$9.568 billion to US$9.718 billion. The non-GAAP diluted earnings per share is expected to be US$3.54 to US$3.58. This is the company's third guidance on increasing bill amounts this year, highlighting management's confidence in the sustainability of demand. However, as of press release, Feita Information's US stock plummeted by nearly 26% before the market on Thursday due to overdraft valuations, a slowdown in revenue growth, and the performance of the service business sector falling short of expectations.

ST Semiconductors' (STM.US) Q3 results were mixed, guidance exceeded expectations, and demand for AI and satellite communications supported growth. According to the data, the company's third-quarter revenue was US$3.76 billion, up 17.9% year on year, exceeding market expectations; non-GAAP earnings per share were $0.37, slightly lower than market expectations. Looking ahead, the company expects median revenue of 4.15 billion US dollars for the fourth quarter, up about 10.5% month-on-month, higher than market expectations of US$4.12 billion; gross margin is expected to be 39.0%, and the market's previous forecast was 38.2%. ST's customers include Apple and Tesla. CEO Jean-Marc Chery said in July this year that revenue growth in the fourth quarter will accelerate, driven by demand for AI data centers and low-orbit satellite communications. However, investors remain cautious about the semiconductor sector, concerned about the sustainability of AI infrastructure spending and competition from Chinese chipmakers.

FedEx (FDX.US) Cargo handed over its first report card after the spin-off: both revenue and profit exceeded expectations, and the full-year guidance was raised. Financial reports show that FedEx achieved revenue of 22.9 billion US dollars in the third quarter, an increase of about 12% over 20.4 billion US dollars in the same period last year, and higher than market expectations of 22.42 billion US dollars. In terms of profit, adjusted operating profit was 1.2 billion US dollars, and the adjusted operating margin was 5.3%; adjusted earnings per share were 3.74 US dollars, up about 28% from 2.93 US dollars in the same period last year, better than market expectations of $3.36. The company's net profit for the quarter was US$290 million, down from US$650 million in the same period last year. Large fluctuations in net profit are mainly affected by one-time projects, including losses associated with short-term investments, debt settlement gains, and partial restructuring costs. Based on strong performance during the quarter, FedEx raised its 2026 adjusted earnings per share forecast from 16.90 to 18.10 US dollars to 18 to 18.60 US dollars; at the same time, the 2026 revenue growth forecast was raised to about 12% from the previous 11% year-on-year increase.

Commodity costs went against the wind and increased to 2.5 billion US dollars, and Ford Motor (F.US) core profit in Q3 bucked the trend and rose slightly by 4%, raising the lower limit of the annual guidance. According to financial reports, the company's revenue for the quarter was 49.5 billion US dollars, down 2% year on year; adjusted earnings per share were 0.49 US dollars, up 9% year on year, higher than the market's consensus forecast of 0.40 US dollars. Core profit indicators bucked the trend and rose slightly: adjusted EBIT was 2.7 billion US dollars, up 4% year over year, and adjusted EBIT profit margin was 5.4%, up 0.3 percentage points year over year; however, the automobile business revenue for the quarter was 46.08 billion US dollars, slightly lower than the forecast of 46.24 billion US dollars. Cost control and strong demand for pickups and SUVs are helping Ford withstand the pressure brought about by inflation and the war with Iran. The company raised the lower limit of the annual adjusted EBIT guidelines from $10 billion to US$10.5 billion to US$11 billion, and raised the annual commodity cost headwind forecast from about US$2 billion to nearly US$2.5 billion. The pressure came from rising copper and steel prices, and the price of diesel driving up freight costs and chip prices. The adjusted free cash flow guidance remained unchanged at $6-70 billion.

Total's (TTE.US) Q3 profit doubled to $9.1 billion, and refining profit margins soared to a record high. Total's Q3 results show that, benefiting from the decline in global supply of refined oil products after the war between the US and Israel against Iran, the Q3 adjusted net profit was US$9.1 billion, the highest level since the first quarter of 2022, up 127% year-on-year and 51% month-on-month, higher than the agreed expectations of US$8.3 billion from 12 analysts compiled by LSEG. IFRS net profit of US$8.26 billion, more than doubled year-on-year, setting a record for a single quarter. The downstream business was one of the highlights of the quarter. Driven by the European refining profit margin index rising to US$33.2 per barrel (2.5 times month-on-month) and a nearly 10% increase in refinery processing volume, the downstream adjusted net operating profit reached US$4.07 billion, an increase of 77% month-on-month, setting a single-quarter record. Total reiterated its $25 billion share repurchase plan for the fourth quarter and said it will repurchase another $25 billion in the first quarter of 2027, which is at the high end of the range of guidance given last month. As of press release, Total's US stocks rose more than 2% in the premarket on Thursday.

Shell (SHEL.US) Q3 earnings exceeded expectations and reached the second-highest level in history, increasing quarterly repurchases to $5 billion. According to financial reports, Shell's Q3 non-GAAP adjusted net profit was US$10.814 billion, up 99% year over year, higher than analysts' forecast of approximately US$10.33 billion. This is the company's highest quarterly profit since the first few months after the Russia-Ukraine full-scale war began in early 2022, and the second-highest quarterly profit in its history. The sharp increase in profits in this period is directly due to geography: the Iran war and the Russian-Ukrainian conflict temporarily shut down quite a bit of the world's fuel production capacity, and refineries that are still in operation are enjoying excessive profits as a result — supply gaps for refined oil products such as diesel and gasoline, which turned into huge profits for those left behind. Along with profit, shareholder returns were also raised: the share repurchase scale was drastically increased from $3 billion to $5 billion in the fourth quarter — against the backdrop of two wars that pushed refining gross profit to the highest level in history and the downstream business recorded the strongest single-quarter performance in history, management chose to accelerate the return of this windfall to shareholders. As of press release, Shell's US stock rose more than 3% in the premarket on Thursday.

The new drug combination was strong, and the Q3 performance of BMY.US (BMY.US) exceeded expectations. Thanks to the continued release of “growth portfolio” products, the company's Q3 performance exceeded expectations and raised its full-year revenue guidance. According to the data, Squibao's total revenue for the third quarter was US$13.069 billion, up 7% year on year, better than market expectations. Among them, US market revenue was 9.074 billion US dollars, up 9% year on year; international market revenue was 3,995 billion US dollars, up 3% year on year. By product portfolio, “growth portfolio” revenue was US$7.662 billion, up 12% year over year, mainly driven by products such as Opdivo Qvantig, Breyanzi, Reblozyl, Camzyos, and Opdualag. Non-GAAP diluted earnings per share of $1.35 were lower than $1.63 in the same period last year, but were still better than market expectations. Squibb raised its revenue guidance for the full year 2026 from approximately US$49 billion to US$50 billion to approximately US$49.75 billion to US$50.25 billion, which mainly reflects the continued growth of its broad product portfolio.

LY.US (LLY.US)'s Q3 results exceeded expectations and raised its full-year revenue guidance to US$91-92 billion. Financial reports show that Eli Lilly's Q3 revenue was US$24.397 billion, up 39% year over year, higher than LSEG's estimate of about US$22.6 billion, of which sales increased 53% and actual prices fell 15%. Non-GAAP earnings per share were $7.48, up 7% year over year, above the LSEG/IBES forecast of $6.49. Two core products continued to grow: Mounjaro's global revenue was US$10.723 billion, up 65% year on year, Zepbound US$5.352 billion, up 49%, KeyProducts totaled US$17.1 billion, and revenue in the fields of immunology, oncology, and neuroscience doubled year over year. In terms of guidance, the full-year revenue guidance was raised from US$85 billion to US$87 billion to US$91 billion to US$92 billion, and the profit margin on performance was raised from 49.0% — 50.5% to 52.0% — 52.5%; however, the bottom line profit improvement was offset by acquisition R&D expenses, and the adjusted earnings per share guide for the whole year was lowered from US$35.50-36.50 to US$35.00-36.00. As of press release, Eli Lilly's US stocks rose more than 4% in the premarket on Thursday.

MSD (MRK.US) Q3 results exceeded expectations: Keytruda and Gardasil performed well and raised their full-year guidance. According to financial reports, MSD's total Q3 revenue was US$18.085 billion, up 5% year on year (excluding exchange rate influence of 4%), higher than LSEG's average analysts' average forecast of US$17.31 billion; adjusted earnings per share of US$2.49, far exceeded expectations of US$2.08. The company raised its full-year guidance on the same day: the low end of the 2026 revenue range was raised from US$66.3 billion to US$66.8 billion, and the adjusted earnings per share guide for the full year rose from US$2.66 to US$2.76 to US$2.77 to US$2.82. But this “beyond expectations” contains the moisture of one company itself: Of the increase in drug sales during the quarter, about $550 million came from the point of purchase — that is, customers purchased early. According to official data, total revenue for this quarter increased by about 809 million US dollars year-on-year. Of this, about 70% were not new demand, but rather a shift in demand.

Caterpillar's (CAT.US) Q3 performance exceeded expectations, but it fell sharply before the market. Driven by sales growth and price realization, Caterpillar's Q3 sales and revenue was US$20.68 billion, up 17% year over year; adjusted earnings per share were US$7.20, higher than market expectations of approximately US$7.03. The three major sectors grew across the board. The sales volume of the electricity and energy sector was 8.78 billion US dollars, up 18% year on year; sales of the construction industry were 7.98 billion US dollars, up 18% year on year; sales of the resource industry were 4.62 billion US dollars, up 15% year on year. The company claims that it has set another record for on-hand orders, but it did not disclose the exact amount, nor did it give quantitative guidance for the whole year in a press release. As of press release, Caterpillar's US stock fell more than 9% in the premarket on Thursday.

Lloyd's (LYG.US) Q3 profit before tax exceeded expectations, and impairment charges soared 78% year over year. Lloyd's third-quarter profit exceeded market expectations, mainly due to increased net interest income and expense revenue. The bank also maintained full-year results guidance. According to the data, in the three months ending September 30, Lloyd's net interest income was 3.8 billion pounds (about 5.1 billion US dollars), up 10% year over year, in line with expectations; profit before tax for the quarter was 2.33 billion pounds, higher than analysts' average forecast of 2.29 billion pounds. CEO Charlie Nunn said in a statement that the bank's “revenue continues to grow, operating leverage continues to improve, and credit performance is strong and stable.” Underlying impairment charges for the quarter rose to £313 million, up 78% year over year, reflecting the impact of “deteriorating economic prospects” and rising interest rates.

Volume and price have risen sharply, and the Q3 performance of Linde Gas (LIN.US) has exceeded expectations. Thanks to increased sales volume and pricing in various regions, Linde Gas' Q3 sales and adjusted earnings both exceeded expectations. According to the data, the company's third-quarter sales were $9.404 billion, up 9% year over year, exceeding analysts' expectations of $9.140 billion. Basic sales increased 5% year-on-year, mainly driven by a 3% price increase and a 2% increase in sales volume. The growth was mainly concentrated in the electronics, chemicals, energy, and manufacturing terminal markets. Adjusted net profit was $2,122 million, up 7% year over year; adjusted diluted EPS was $4.59, up 9% year over year, exceeding analysts' expectations of $4.52.

Key economic data and event forecasts

At 20:30 Beijing time, the monthly rate of personal expenses in the US in September

Beijing time 20:30 US PCE price index for September

Preliminary value of the annualized quarterly rate of real GDP in the third quarter of the United States at 20:30 Beijing time

Performance Forecast

Friday morning: Amazon (AMZN.US), Intel (INTC.US), SanDisk (SNDK.US), Starbucks (SBUX.US), Gilead Sciences (GILD.US), Coinbase (COIN.US), Pinterest (PINS.US), Roblox (RBLX.US), VALE.US

Friday pre-market: British Petroleum (BP.US), ExxonMobil (XOM.US), Chevron (CVX.US), Abbv (ABBV.US), Regenerative Pharmaceuticals (REGN.US)