Morning in New York: awaiting key events

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research

The focus of market participants' attention shifted to US President Donald Trump's visit to Japan, where he met with new Prime Minister Sanae Takaichi, with whom they signed agreements on trade and supplies of rare earth metals. The two leaders announced Japanese investment in the U.S. economy of up to $550 billion and purchases of U.S. goods, including soybeans and energy. Trump praised Tokyo's increased military spending. Together with the mentioned agreement on the export of critical minerals to the United States, this creates positive expectations in the commodities and industrial segments on the background of the upcoming talks between the heads of the U.S. and China in South Korea on Thursday. Investors expect important news on tariffs and export restrictions from this meeting.

The two-day meeting of the Federal Reserve starts today, which will also be an important event for stock exchange players. The expected 25bp rate cut is already reflected in quotes, but any hints of the end of the quantitative tightening (QT) program can increase volatility and change the direction of trading.

Macroeconomic releases will be an additional benchmark. This Tuesday, the Conference Board Consumer Confidence Index for October will be released (consensus: 93.4 points, September: 94.2 points). If the actual value reflects a decline in the index, it will contribute to increased caution of market participants with the continued uncertainty of the situation in the economy and expectations regarding the Fed's decisions. FRB Dallas will present the index of business activity in the segment of services for October (previous value: -5.6 points). Changes in this index will reflect the state of the regional services market and may affect the sector's valuation during today's trading.

UnitedHealth Group (UNH), SoFi (SOFI), PayPal (PYPL), NextEra Energy (NEE), Corning (GLW) and UPS (UPS) will report quarterly results before the open. Visa (V), Booking Holdings (BKNG), Seagate (STX), Bloom Energy (BE), Teradyne (TER), Mondelez (MDLZ) and Enphase (ENPH) will report after the end of the main session.

Futures on US indices show about zero dynamics. We assess the balance of risks as neutral with an average level of volatility. We focus on S&P 500 fluctuations in the range of 6820-6900 points (from -0.9% to +0.4% of the previous session's closing level).

- Alphabet (GOOGL) and NextEra Energy (NEE) will restart the Duane Arnold nuclear power plant in Iowa by 2029 to cover the growing power needs of AI data centers. Against this backdrop, NEE shares are up more than 7% on the premarket.

- Amazon (AMZN) will cut up to 30 thousand jobs from October 28. The decision is related to cost optimization and implementation of AI tools to automate processes. The company's shares react to the news with a growth of about 1.2%.

- Meta (META), TikTok and Snap (SNAP) began preparations to deactivate accounts of users under 16 years old in Australia, despite disagreement with the new law. Quotes of both issuers on this background are moving multidirectionally.

- Paramount Skydance (PSKY) is laying off 1,000 employees (about 5% of its workforce) following its deal with Skydance Media. The company's shares are moving downward before the start of the main trading.

- HSBC (HSBC) reported a 14% drop in pre-tax profit for the third quarter due to the $1.1 billion charge in the "Madoff affair." At the same time, the net interest income guidance for the year was improved due to slower-than-expected rate cuts. Bank quotes are moving upward on the premarket.

- British American Tobacco (BAT) has suspended the launch of a test batch of its Vuse One license-free vape in the United States due to intensified FDA scrutiny of unregulated products.

Trades on October 27 on the U.S. stock exchanges ended in the green sector. S&P 500 added 1.23%, Nasdaq 100 rose by 1.83%, Dow Jones rose by 0.71%, Russell 2000 - by 0.28%. The technology sector (XLK: +1.85%) led the growth, while mining and materials (XLB: -0.04%) fell slightly due to the correction in precious metals prices.

All representatives of the "Magnificent Seven" ended the trading on the positive territory. The most notable growth was demonstrated by Tesla (TSLA: +4.31%), despite reports of Elon Musk's possible departure.

The key event of the session was the news about progress in trade relations between the US and China. The weekend talks resulted in a tentative consensus on reducing export restrictions, tariffs on fentanyl and shipping fees. US President Donald Trump and Chinese President Xi Jinping are scheduled to meet on October 30 at the APEC summit to discuss a framework agreement, which could reduce the risk of a significant increase in duties. The market is reacting positively to the prospect of a continued trade truce between Beijing and Washington, which supports investor optimism, while additional details of the deal remain unclear.

The FRB Dallas Manufacturing Business Activity Index for October came in slightly below expectations as new orders remain in a contractionary phase. At the same time, the employment component moved into positive territory and price indices declined from September levels.

The auction on placement of two-year treasury bonds for the amount of $69 billion was held with a slight increase in the premium, the demand of foreign investors for these securities was below the average values of the previous months. At the same time, the issue of five-year treasuries was more successful due to the high activity of non-residents.

- Qualcomm (QCOM: +11.1%) announced a new artificial intelligence gas pedal for data centers and announced launch dates for the AI200 and AI250 models. This intensifies competition in the industry.

- Keurig Dr Pepper (KDP: +7.6%) reported third-quarter revenue growth, reaffirmed its earnings guidance for 2025, noted positive momentum in the beverage market, including coffee, in the U.S., and reported raising investment to fund the acquisition of JDE Peet's.

- Cadence Bank (CADE: +4.4%) will be acquired by Huntington Bancshares (HBAN: -2.4%) for $7.4 billion, which implies a 9% premium to the market price. The takeover is planned to be completed in the first quarter of 2026.

- American Water (AWK: -2.5%) announced its merger with Essential Utilities (WTRG: -1.41%). The company, which emerged from a deal that could close in the first quarter of 2027, is collectively valued at $63 billion.

This article was AI-translated and verified by a human editor