Morning in New York: information vacuum, new reports and the Fed's Beige Book

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

October 15 will be marked by an information vacuum as the key macroeconomic release of the week, the September consumer inflation (CPI) report, will not be published due to the ongoing government shutdown. Publication has been pushed back to October 24. At the same time, if the shutdown does not end by then, the absence of this data will deprive investors and the Fed of a crucial indicator of price pressure ahead of the next rate meeting. This adds to the overall uncertainty in the market.

More attention will be paid to the data that will be released. First of all, it is the Fed's Beige Book - a consolidated report on economic conditions in 12 US districts. Investors will be scrutinizing it in search of qualitative assessments of economic activity, business comments on inflationary pressures and the state of the labor market. The October New York Empire Manufacturing index will also be released, with the consensus forecast suggesting a significant improvement to -1.8 points from -8.7 points in September. The market will take the strong data positively, but its impact is likely to be limited in the absence of a major inflation report.

The markets will receive additional information from the Fed representatives: on Wednesday, Christopher Waller and Stephen Miran, members of the Board of Governors, are scheduled to speak. In the absence of inflation data, their comments on the current economic situation and further steps of the regulator will be of particular importance. Market sentiment remains fragile and any escalation in trade relations between the US and China could trigger a new wave of volatility.

Corporate reporting season continues, and will be in the spotlight on Wednesday.Bank of America (BAC) has already reported quarterly results, beating Wall Street forecasts. Morgan Stanley (MS), Abbott Laboratories (ABT), Dollar Tree (DLTR) and Prologis (PLD) will also report before the open. United Airlines (UAL) will report after the end of the main session.

Futures on US indices are trading in the plus. We assess the balance of risks as neutral, while the probability of increased volatility remains amid uncertainty around tariffs. We focus on S&P 500 fluctuations in the range of 6580-6710 points (from -1.0% to +1.0% of the previous session's closing level).

- ASML Holding 's (ASML) quarterly report sets a mixed but generally cautious tone for the technology sector. On the one hand, the company pleasantly surprised investors: the volume of new orders, driven by the ongoing AI boom, exceeded analysts' expectations and reached €5.4 billion ($6.28 billion). An additional positive factor was the announcement of a new share buyback program to be launched in January. However, CEO Christophe Fouquet warned that the company expects a significant decline in demand and sales in China next year compared to 2024 and 2025 amid the negative impact of export restrictions. That said, management expects total net sales in 2026 to be at or above 2025 levels.

- In extended trading, Veritone (VERI) stock posted explosive gains of more than 45% following a positive corporate announcement. The driver was the announcement of new contracts, as well as preliminary data on revenues for the third quarter, which will exceed expectations.

- Shares of BrightSpring Health Services (BTSG) are showing gains of more than 6% in extended trading after the company announced its inclusion in the S&P SmallCap 600 Index.

Trades on October 14 on American stock exchanges ended mixed. S&P 500 decreased by 0.16%, Nasdaq 100 lost 0.69%, while Dow Jones added 0.44%, and Russell 2000 increased by 1.38%. The key factor that determined such dynamics was capital rotation on the background of renewed tension in trade relations between the USA and China. At the same time, it is worth noting a significant divergence in the dynamics of the broad market: the equal-weighted S&P 500 index (RSP) grew by 0.83%, outperforming its capitalization-weighted counterpart by almost 100 basis points. This indicates weakness in the largest technology companies. The consumer staples sector (XLP: +1.61%) emerged as the top gainer, as investors moved into the sector in search of defensive assets. The outsider was the technology sector (XLK: -1.28%), hurt by concerns over chip export restrictions. Among the "Magnificent Seven" stocks, weakness was observed: Nvidia (NVDA: -4.4%) was under the most pressure, while Google (GOOGL: +0.5%) was one of the few representatives of the group to close in the plus.

On Tuesday, trade tensions between the US and China resumed, which was one of the main reasons for the multidirectional market dynamics. The conflict went beyond traditional tariffs: the U.S. Treasury Secretary accused Beijing of trying to harm the global economy by controlling the export of rare earth metals. At the same time, Washington began levying duties on Chinese ships entering U.S. ports, which provoked retaliatory restrictive measures by China in the shipbuilding industry. This escalation increased investors' concerns about the stability of global supply chains.

Against this background, the corporate reporting season officially started, which was traditionally opened by the largest banks. The results of JPMorgan (JPM), Goldman Sachs (GS), Citigroup (C) and Wells Fargo (WFC) exceeded analysts' expectations in terms of revenue and profit. The main driver of the strong results was strong activity in the capital markets and investment banking businesses. Positive reporting supported the financial sector and the Dow Jones index, and reinforced the thesis of the resilience of the U.S. economy and the consumer.

In the center of investors' attention was also the speech of Fed Head Jerome Powell. His speech contained no surprises and was perceived as "dovish". Powell noted that, judging by the available data, inflation and employment forecasts have not changed much since the September meeting. He explicitly mentioned that official labor market statistics have been delayed by the shutdown, making it difficult to assess the economic situation. His comments reinforced market expectations for further interest rate cuts before the end of the year. Against this background, the NFIB small business optimism index published on the same day was weaker than expected, falling to 98.8 points (previous value: 100.8 points); the report indicated that small businesses are facing increasing inflationary pressures and difficulties in the labor market, which was perceived as an additional argument in favor of easing monetary policy.

- The quarterly reports of the largest banks generated mixed reactions, reflecting differences in the details of their results. Strong performance and a positive outlook for net interest income supported Wells Fargo (WFC: +7.2%). Citigroup (C: +3.9%) beat expectations on all key items and raised its full-year guidance. Goldman Sachs (GS: -2.0%) and JPMorgan Chase (JPM: -1.9%) came under pressure: Goldman Sachs disappointed with results in equity trading, while JPMorgan, despite formally beating forecasts, raised investor concerns due to a significant increase in loan loss provisions and a cautious outlook for 2026.

- News of a partnership with OpenAI to integrate a direct-to-consumer shopping feature via ChatGPT was welcomed by investors, leading Walmart shares (WMT: +5.0%) higher. The move is seen as an important strategic initiative, allowing the retailer to capitalize on the hype around AI to strengthen its position in e-commerce and attract new audiences.

- Shares of BlackRock (BLK: +3.4%), the world's largest asset management company, also showed strong growth. Investors positively assessed the strong quarterly report, in which the company not only exceeded revenue and profit expectations, but also recorded a record $13.5 trillion in assets under management (AUM) thanks to net capital inflows of $205 billion for the quarter.

- The quarterly report, which exceeded expectations on revenue, profit and comparable sales in the US, boosted Domino's Pizza (DPZ: +3.9%). Successful promotions and menu innovations helped the company to solidly increase share in its key home market, which offset weaker results in the international arena.

- The news about the expansion of the strategic partnership, under which Oracle will deploy more than 50,000 next-generation AMD EPYC processors, supported shares of Advanced Micro Devices (AMD: +0.77%). At the same time, Oracle securities (ORCL: -2.93%) ended the day in the negative, as the positivity from the deal was offset by earlier concerns about the profitability of the company's cloud business.

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