Earnings Disappointments, Rising Geopolitical Tensions, and Commodity Surge

Index Update:  In extended trading, Tesla fell nearly 4% after mixed results, and IBM dropped over 6% on weak software revenue, while Moderna, Lam Research, and Molina Healthcare also declined. Conversely, Southwest Airlines and Las Vegas Sands rose on strong earnings. On Wednesday, major U.S. indices closed lower—Dow down 0.71%, S&P 500 down 0.53%, and Nasdaq down 0.93%—amid reports of potential U.S. export restrictions to China. Markets steadied slightly after Trump confirmed a scheduled meeting with China’s Xi Jinping, with investors now eyeing upcoming earnings and Friday’s CPI data.

Market Movers:  On Wednesday, the top gainers were Armata Pharmaceuticals, Inc. (+103.17%), followed by American Rebel Holdings, Inc. (+72.00%). On the contrary OBOOK Holdings Inc. (-51.18%), and Arcturus Therapeutics Holdings Inc. (-50.17%) declined the most the same day.

Commodities Update:  Oil and gold prices surged on Thursday amid heightened geopolitical tensions. WTI crude rose over 5% to above $61 per barrel and Brent climbed past $65 after the U.S. imposed sanctions on Russian oil giants Rosneft and Lukoil, which together supply nearly half of Russia’s oil exports. The move, supported by new EU sanctions banning Russian LNG, aims to pressure Moscow over its stance on Ukraine. Meanwhile, gold prices rebounded to around $4,120 per ounce, supported by safe-haven demand following U.S.-Russia tensions, potential U.S. export restrictions on China, and expectations of further Federal Reserve rate cuts.

Macro Updates:

Trump Signals Broad Talks with Xi Amid Renewed U.S.-China Tensions

U.S. President Donald Trump said he expects to finalize several agreements with Chinese President Xi Jinping during their upcoming meeting in South Korea, covering topics from soybean trade to nuclear arms limits. He also plans to discuss China’s purchases of Russian oil and potential steps to end the war in Ukraine. The announcement follows a flare-up in U.S.-China trade tensions, with Trump imposing 100% tariffs on Chinese goods from November 1 after Beijing restricted rare earth exports, while U.S. officials head to Malaysia to help ease diplomatic strains.

U.S. Mulls Broad Export Restrictions on China Amid Escalating Tech Tensions

The Trump administration is considering extensive curbs on exports to China of products made with U.S. software—including laptops and jet engines—in retaliation for Beijing’s rare earth export limits, Reuters reported. The potential move follows Trump’s threat of 100% tariffs and new controls on critical software by November 1. Meanwhile, Bloomberg reported that China has sent detailed questionnaires to U.S. semiconductor firms about their China operations, signaling heightened scrutiny of American chipmakers as tech tensions intensify.

Futures Update:  U.S. stock futures were mixed on Thursday as investors assessed major corporate earnings, including Tesla’s results, amid escalating U.S.-China trade tensions. Dow futures were down 0.2%, while S&P 500 and Nasdaq 100 futures inched up 0.1% each. On Wednesday, Wall Street closed lower following weak earnings from Netflix and Texas Instruments

Following the lackluster performance seen during Tuesday's session, stocks mostly declined on Wednesday. The S&P 500 fell by 35.93 points, or 0.53%, closing at 6,699.41. From a technical perspective, the index is facing resistance at key levels and has moved lower, suggesting a possible period of consolidation with a bearish undertone. Additionally, the 14-day Relative Strength Index (RSI) may dip below the midpoint in the near term, indicating a cautious outlook despite the overall positive bias. Key support levels are around 6,600, with resistance expected near 6,777.