Stock Index Futures Muted With Focus on Corporate Earnings

December S&P 500 E-Mini futures (ESZ25) are down -0.04%, and December Nasdaq 100 E-Mini futures (NQZ25) are down -0.08% this morning, pointing to a muted open on Wall Street after yesterday’s rally, as investors await a fresh batch of corporate earnings reports, with a particular focus on results from blue chips such as Netflix, Coca-Cola, and 3M.

In yesterday’s trading session, Wall Street’s main stock indexes closed higher. Apple (AAPL) climbed nearly +4% after Loop Capital upgraded the stock to Buy from Hold with a price target of $315, citing positive iPhone demand trends. Also, chip stocks gained ground, with ON Semiconductor (ON) and KLA Corp. (KLAC) advancing more than +4%. In addition, Cleveland-Cliffs (CLF) jumped more than +21% after the steelmaker said it was exploring methods to extract rare-earth minerals from its iron ore deposits. On the bearish side, AppLovin (APP) fell over -5% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the New York Post reported that multiple state regulators had contacted short sellers as part of a possible preliminary investigation into the company.

“We are seeing the typical seasonal volatility in October, but the recent swings have been relatively shallow by historical standards, as the buy-the-dip mentality appears to be in play,” said Rick Gardner at RGA Investments.

Third-quarter corporate earnings season is ramping up. Investors will be closely monitoring earnings reports today from prominent companies like Netflix (NFLX), GE Aerospace (GE), Coca-Cola (KO), Texas Instruments (TXN), Lockheed Martin (LMT), 3M (MMM), and General Motors (GM). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +7.2% increase in quarterly earnings for Q3 compared to the previous year, marking the smallest rise in two years.

Meanwhile, the U.S. government shutdown has entered its 21st day. The shutdown means that official U.S. economic data continue to be delayed. However, the Department of Labor has recalled a limited number of employees to release the September inflation report on a delayed basis this Friday, making a rare exception to release data during the shutdown.

U.S. National Economic Council Director Kevin Hassett said on Monday that the shutdown could end this week, boosting hopes that a prolonged and economically damaging stoppage might be avoided. He said his “friends in the Senate” thought it would be “bad optics for Democrats to open the government before the ‘No Kings’ rallies and that now there’s a shot that this week things will come together.”

Fed Governor Christopher Waller is scheduled to deliver opening remarks later today at a conference focused on payments innovation. With Fed officials in a blackout period before the October 28-29 policy meeting, Waller is likely to avoid commenting on interest rates.

U.S. rate futures have priced in a 98.9% probability of a 25 basis point rate cut and a 1.1% chance of no rate change at next week’s monetary policy meeting.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.973%, down -0.30%.

The Euro Stoxx 50 Index is down -0.14% this morning as investors digest a mixed bag of corporate earnings reports. Mining and chemical stocks retreated on Tuesday, while real estate stocks gained ground. The benchmark index rallied about 1.4% in the previous session as worries over the U.S. banking sector and U.S.-China trade tensions eased. Meanwhile, European Central Bank Chief Economist Philip Lane said on Tuesday that Eurozone banks could come under pressure if U.S. dollar funding were to dry up, potentially leading them to scale back lending to the economy. In other news, leaders from Britain, France, Germany, Ukraine, and the European Union released a joint statement expressing their support for Ukraine and backing Trump’s efforts to end the war there. In corporate news, OVH Groupe (OVH.P.DX) tumbled over -17% after the cloud-computing company issued below-consensus annual organic revenue growth guidance and announced that its chief executive would step down after just one year in the role. Also, Husqvarna AB (HUSQB.S.DX) slumped more than -9% after reporting disappointing Q3 results. On the positive side, Edenred (EDEN.FP) surged over +14% after the vouchers and benefit cards provider posted better-than-expected Q3 sales.

The European economic data slate is mainly empty on Tuesday.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.36%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.27%. 

China’s Shanghai Composite Index closed sharply higher today, notching its biggest gain in six weeks, amid optimism over a potential trade deal with the U.S. AI-related and semiconductor stocks led the gains on Tuesday. While U.S. President Donald Trump reiterated his threat to raise tariffs on Chinese goods “if there isn’t a deal” by November 1st, he also confirmed plans to meet with Chinese President Xi Jinping next week. President Trump said he expects to reach a fair trade deal with President Xi and downplayed the likelihood of tensions over the Taiwan issue. Meanwhile, a new round of U.S.-China trade talks is scheduled to take place this week in Malaysia between Treasury Secretary Scott Bessent and Vice Premier He Lifeng. Bank of America analysts said in a note that most investors now “do not expect a meaningful derail of the U.S.-China trade talks.” Investor attention also remains on the Fourth Plenum, which began on Monday and runs through Thursday. It will lay out the government’s economic, political, and social priorities along with its development plans for the next five years. Although the detailed plan won’t be released until March next year, investors will closely examine the post-meeting readout for policy clues ahead of the meeting between Presidents Xi Jinping and Donald Trump. In corporate news, Contemporary Amperex Technology rose over +3% in Hong Kong after the world’s largest EV battery maker posted solid Q3 results.

Japan’s Nikkei 225 Stock Index closed higher today after pro-stimulus Sanae Takaichi won a key parliamentary vote to become the nation’s prime minister. Retail and healthcare stocks outperformed on Tuesday. Takaichi secured 237 votes in the more powerful lower house, surpassing the majority threshold by four votes required to confirm her victory. The benchmark index initially surged as much as 1.6% to just below the psychologically important 50,000 mark, but gave up most of those gains by the close as investors moved to lock in profits from earlier bets on Takaichi’s stimulus policies. Analysts said investors had good reasons to take profits following the strong rally in Japanese stocks over the past month. Meanwhile, the yen weakened after Takaichi was elected as Japan’s new prime minister. Also, Bloomberg reported on Tuesday that Bank of Japan officials believe there is no immediate need to raise the benchmark rate next week, even as the economy moves closer toward achieving their inflation target, further pressuring the currency. Still, the report said that officials view conditions as aligning for a rate hike as early as December. Investor focus now shifts to who will be appointed to Takaichi’s cabinet for clues on how the new government plans to handle spending and debt management. Broadcaster FNN reported on Tuesday that the new prime minister has decided to appoint former regional revitalization minister Satsuki Katayama as finance minister. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.07% to 30.06.

Pre-Market U.S. Stock Movers

Elevance Health (ELV) advanced over +4% in pre-market trading after the health insurer reported better-than-expected Q3 results.

Coca-Cola (KO) gained more than +3% in pre-market trading after the company posted stronger-than-expected Q3 results and reaffirmed its full-year guidance.

Fluor Corporation (FLR) climbed over +6% in pre-market trading after The Wall Street Journal reported that activist investor Starboard Value took a nearly 5% stake in the company.

Zions Bancorp (ZION) rose more than +2% in pre-market trading after the regional lender reported better-than-expected Q3 results.

Tempus AI (TEM) fell over -1% in pre-market trading after TD Cowen downgraded the stock to Hold from Buy.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - October 21st

Netflix (NFLX), GE Aerospace (GE), Coca-Cola (KO), Philip Morris (PM), RTX Corp (RTX), Texas Instruments (TXN), Danaher (DHR), Capital One Financial (COF), Lockheed Martin (LMT), Chubb (CB), Northrop Grumman (NOC), 3M (MMM), Elevance Health (ELV), General Motors (GM), Nasdaq Inc (NDAQ), PACCAR (PCAR), Waste Connections (WCN), EQT (EQT), Equifax (EFX), PulteGroup (PHM), Quest Diagnostics (DGX), Halliburton (HAL), Pentair (PNR), Omnicom (OMC), East West Bancorp (EWBC), Manhattan Associates (MANH), Pegasystems (PEGA), Agree Realty (ADC), Western Alliance (WAL), Valmont Industries (VMI), PennyMac Financial (PFSI), GATX (GATX), Mattel (MAT), Badger Meter (BMI), Matador (MTDR), Balchem (BCPC), Cathay (CATY), Fulton (FULT), Community Bank System (CBU), Vicor (VICR), Pathward Financial (CASH), National Bank Holdings (NBHC), PennyMac Mortgage (PMT), Peoples Bancorp (PEBO), Hanmi (HAFC), Capital City Bank (CCBG), TrustCo Bank NY (TRST), Orrstown (ORRF), SmartFinancial Inc (SMBK), KKR Real Estate (KREF), Bridgewater Bancshares (BWB), USANA Health Sciences (USNA), Acme United (ACU).