US equity futures climbed at the end of a turbulent week after Amazon.com Inc. and Intel Corp. reported solid earnings, lifting some of the gloom that settled after mixed reports from big-tech peers. Crude oil rose as the US conducted strikes on Iran-linked facilities in Syria.
Nasdaq futures added 0.8% after a selloff that drove the index to its lowest since May. The retreat also put the S&P 500 on the brink of a “correction,” with the gauge down almost 10% from its July peak. Intel jumped 7.8% in premarket trading Friday, while Amazon was up 4.8%.
The earnings season has proved a mixed bag so far, with investors punishing misses more severely than they are rewarding beats. In the US, 78% of companies reporting beat estimates, compared with 57% in Europe, according to JPMorgan Chase & Co. strategists. But more companies than usual are flagging lower consumer demand and a deteriorating economic environment, they said, even as data Thursday suggested price pressures continue to dissipate in the US despite solid economic growth.
The focus now turns to a raft of reports today, including the Federal Reserve’s preferred measure of underlying price pressures, to solidify bets the central bank will pause next week. In addition, traders will watch earnings from oil majors including Exxon Mobil Corp. and Chevron Corp.
Resilient US growth and earnings beats by some US tech giants “bake into a long-awaited relief for stressed investors,” said Hebe Chen, an analyst at IG Markets in Melbourne. “As we approach the end of the month, investors are holding their breath for next week’s FOMC meeting, which is poised to set the tone for the remainder of the year.”
The Stoxx Europe 600 slipped as earnings continued to disappoint. French drugmaker Sanofi plunged as much as 16% after an earnings miss and downbeat outlook, while UK lender NatWest Group Plc slumped after cutting margin guidance. Universal Music Group NV, the record label for Taylor Swift, dropped after missing some estimates. On the plus side, energy majors advanced as Brent crude climbed more than 1% to above $89 a barrel.
Other corporate news in Europe:
- Electrolux AB shares fell as much as 14%, the most since July, after the Swedish home appliances manufacturer reported third-quarter results that Citigroup Inc. described as “much worse than feared.”
- Remy Cointreau SA fell to a three-year low after the French distiller cut its annual sales guidance, citing weaker-than-expected US demand for its high-end spirits. The shares plunged as much as 12%.
- Moncler SpA hares dropped as much as 8%, their worst day since March 2022, after in-line third-quarter sales were overshadowed by the Italian luxury company seeing weaker trends into the latter part of the year.
- Air France-KLM reported a surge in third-quarter profit, though concerns about rising geopolitical tensions muted the benefits of strong summer demand. The shares fell.
- Ubisoft Entertainment SA rose as much as 12% after the French video games manufacturer reported an earnings beat.
- Danske Bank A/S gained as much as 6.4%, the best performer on the Stoxx 600 Banks Index, after raising the low end of its net income forecast for the full year.
Shares in Hong Kong and Japan led the advances in Asia, while Australian and South Korean stocks were also in the green. Mainland Chinese shares edged higher after data on industrial companies’ profit showed growth, though slightly softer than in the prior period.
Treasury yields ticked higher and the dollar was steady, with swaps contracts projecting a roughly one in three chance of another Fed hike in the current tightening cycle, according to data compiled by Bloomberg.
The yen was steady after Tokyo inflation, an indicator of Japanese consumer cost pressures, unexpectedly accelerated for the first time in four months. Japan’s Finance Minister Shunichi Suzuki reiterated officials are watching currency moves with a high sense of urgency.
Meanwhile, traders are keeping a close eye on geopolitical developments in the Middle East, with Israel’s military saying it killed Hamas’s deputy head of intelligence, who it said was responsible for helping plan the Oct. 7 attacks. The army overnight also made a limited ground raid into northern Gaza while Iran escalated its rhetoric with the US.
Key events this week:
- US PCE deflator, personal spending and income, University of Michigan consumer sentiment, Friday
- Exxon Mobil earnings, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 was little changed as of 9:21 a.m. London time
- S&P 500 futures rose 0.6%
- Nasdaq 100 futures rose 0.9%
- Futures on the Dow Jones Industrial Average rose 0.3%
- The MSCI Asia Pacific Index rose 1.2%
- The MSCI Emerging Markets Index rose 1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0559
- The Japanese yen rose 0.2% to 150.13 per dollar
- The offshore yuan was little changed at 7.3234 per dollar
- The British pound was little changed at $1.2120
Cryptocurrencies
- Bitcoin fell 0.5% to $34,033.32
- Ether fell 0.9% to $1,782.45
Bonds
- The yield on 10-year Treasuries advanced three basis points to 4.88%
- Germany’s 10-year yield declined one basis point to 2.85%
- Britain’s 10-year yield declined two basis points to 4.57%
Commodities
- Brent crude rose 1.4% to $89.18 a barrel
- Spot gold rose 0.1% to $1,987.13 an ounce
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Tassia Sipahutar, Pearl Liu and Jessica Menton.
