Morning in New York: Focus on the start of reporting season

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

On Tuesday, October 14, futures on U.S. indices are declining, reflecting rising tensions between the U.S. and China. China announced restrictions against five U.S. units of South Korea's Hanwha Ocean following Washington's sanctions on the shipbuilding sector. In addition, retaliatory duties on U.S. vessels calling at Chinese ports came into effect, increasing investor concerns about the impact of the conflict on global supply chains and global demand.

Investor attention is also focused on the start of the corporate reporting season, which traditionally sets the tone for the market. Major banks JPMorgan (JPM), Goldman Sachs (GS), Citigroup (C) and Wells Fargo (WFC ) open the quarter, and increased trading activity and volatility are expected to support earnings per share (EPS) growth in the financial sector.

Tuesday will also see Fed Chairman Jerome Powell deliver the keynote address at the National Association for Business Economics (NABE) annual conference in Philadelphia. His rhetoric may influence expectations for further rate cuts and set a short-term vector for financial markets, determining whether the current volatility will continue or stabilization will follow.

Among macro statistics, the NFIB Small Business Optimism Index for September (consensus: 100.6 p., previous value: 100.8 p.) is expected to be released on October 14. It will help assess the sentiment among small businesses and the stability of domestic demand in the context of continuing tariff uncertainty.

Before opening of trades quarterly results will be presented by the above-mentioned banks, as well as Johnson & Johnson (JNJ), BlackRock (BLK ) and Domino's Pizza (DPZ). After the end of the main session Hancock Whitney (HWC) will report.

Futures on American indices show a significant decline. We assess the balance of risks for the upcoming session as negative with increased volatility. We focus on the S&P 500 movement in the range of 6540-6670 points (from -1.7% to +0.2% to the closing level of the previous session).

- Momentus (MNTS) added 12.6% after signing a $15 million global agreement with Solstar Space. The contract will integrate Momentus' satellite solutions for on-orbit communications and transportation, strengthening the company's position in the commercial space sector.

- Polaris (PII) shares rose 12.3% after announcing the sale of a majority stake in the Indian Motorcycle division to investment firm Carolwood LP. The deal will allow Polaris to focus on its core businesses, including off-road vehicles and snowmobiles.

- Navitas Semiconductor (NVTS) shares soared 37.7% after announcing progress in the development of advanced GaN- and SiC-based medium- and high-power (up to 800V) devices designed to support a new 800V power architecture for Nvidia's next-generation AI computing platforms (NVDA).

-Ford Motor Company (F) has temporarily suspended production of several models, including the lucrative Expedition and Lincoln Navigator SUVs, following a fire at aluminum supplier Novelis' plant in upstate New York.

U.S. stocks ended Monday with strong growth, having recovered from sharp selloffs at the end of last week. The S&P 500 gained 1.56%, the Dow Jones rose 1.29%, the Nasdaq 100 gained 2.18%, and the Russell 2000 gained 2.79%. All representatives of the "Magnificent Seven" stocks closed in the plus, with Tesla (TSLA: +5.42%) showing the best dynamics. Most broad market sectors ended the session in positive territory, with the technology sector (XLK: +2.44%) and discretionary (XLY: +2.23%) leading the way, while non-cyclical consumer staples (XLP: -0.33%) and health care (XLV: -0.11%) came under pressure.

The market was supported by a softening of White House rhetoric after a new flare-up in trade tensions with China. After President Donald Trump threatened 100 percent duties on Chinese goods on Friday, the administration signaled it was open to negotiations. Trump said trade relations with Beijing "will be fine," softening his remarks that caused nervousness in the market over the weekend. U.S. Treasury Secretary Scott Bessent told Fox Business that Trump still plans to meet Chinese leader Xi Jinping in South Korea later this month to ease tensions over tariffs and export controls. Softer rhetoric from the White House has supported demand for risk assets, especially in the technology and industrial sectors, which have taken the brunt of the recent sell-off.

Meanwhile, the US government shutdown has entered its third week and negotiations to end it remain stalled. The Senate has gone on holiday until Tuesday, guaranteeing that the government shutdown will continue until at least October 14. Vice President J.D. Vance warned that a prolonged funding shutdown could lead to "deeper cuts" to federal personnel, with the military at risk of not getting paid for the first time in history as early as Wednesday. The Trump administration has sent temporary layoff notices to 4,000 government workers, increasing pressure on Democrats who insist on maintaining ACA subsidies as a condition for reopening the government. According to Politico and CNN, talks between the parties remain without progress and the likelihood of a compromise soon is extremely low.

- Shares of Power Integrations (POWI: +24.6%) rose sharply after announcing a data center partnership with Nvidia (NVDA) . As part of the partnership, the companies plan to jointly develop power system solutions optimized to work with artificial intelligence gas pedals.

- Quotes of IonQ (IONQ: +16.2%) rose after JPMorgan Chase (JPM) announced its intention to invest $10 billion in strategic technologies, including quantum computing.

- Broadcom (AVGO: +9.9%) shares strengthened following news of a strategic partnership with OpenAI to deploy 10 GW of specialized AI gas pedals developed by OpenAI. The project will start in the second half of 2026 and aims to create a new generation of data centers optimized for generative artificial intelligence.

- Shares of Fastenal (FAST: -7.5%) declined following the release of its Q3 2025 earnings per share report: earnings per share came in slightly below consensus estimates, with revenue matching market expectations. Operating profit fell short of analysts' forecasts, although gross margin came in slightly above expectations. Management noted that industrial production remains sluggish despite improved contracting dynamics compared to last year.

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