U.S. Markets Rise Amid Earnings Optimism and Fed Rate Cut Expectations

Index Update:  U.S. stock futures rose Thursday, with S&P 500 and Dow Jones futures up 0.4% and Nasdaq 100 futures gaining 0.6%, as investors looked past U.S.–China trade tensions and the ongoing government shutdown. Sentiment improved after Taiwan Semiconductor raised its revenue-growth target, boosting chip stocks—Nvidia gained 1.4%, Broadcom 2%, and Micron 3.4% premarket. Bank of New York Mellon rose 0.9% on strong earnings, while Salesforce surged over 6% on improved guidance. Conversely, United Airlines fell 2% after missing revenue expectations.

Market Movers:  On Wednesday, the top gainers were Australian Oilseeds Holdings Limited. (+173.58%), followed by Omeros Corporation. (+154.15%). On the contrary Aqua Metals, Inc. (-52.94%), and Pixelworks, Inc. (-47.83%) declined the most the same day.

Commodities Update:  WTI crude rose toward $59 per barrel and Brent climbed above $62, rebounding from five-month lows after U.S. President Trump said India pledged to halt Russian oil purchases and vowed to urge China to follow. The move eased concerns of a supply glut despite the IEA’s forecast of a 4 million-barrel-per-day surplus by 2026. However, a 7.4 million-barrel jump in U.S. crude inventories and persistent U.S.–China trade tensions continued to cloud demand prospects. Meanwhile, gold prices surged above $4,230 per ounce to a new record, supported by safe-haven demand and expectations of Fed rate cuts following weak labor signals. The softer dollar further lifted gold, while trade and geopolitical tensions, including China’s rare-earth export curbs and the ongoing U.S. government shutdown, added to market uncertainty.

Macro Updates:  U.S. Treasury Secretary Scott Bessent indicated that Washington may extend its pause on import duties for Chinese goods beyond three months if Beijing withdraws plans for new rare-earth export controls. Speaking in Washington, Bessent noted that such an extension would depend on upcoming negotiations. The U.S. and China have observed a series of 90-day trade truces, with the next set to expire in November. Tensions have recently escalated following new U.S. tech restrictions and proposed tariffs on Chinese vessels, which prompted retaliatory actions from Beijing. Bessent also said the U.S. plans to tighten control over strategic sectors by acquiring more equity stakes in key companies to counter China’s economic and export policies.

Bonds Commentary:  The U.S. 10-year Treasury yield hovered around 4.02% on Thursday, near a five-month low, as investors weighed rising U.S.–China trade tensions, the prolonged government shutdown, and expectations of further Fed rate cuts. President Trump confirmed an ongoing trade war with China, while Treasury Secretary Bessent suggested a possible extension of the trade truce if Beijing withdraws planned rare-earth export controls. The three-week government shutdown has delayed key economic data, and Fed Chair Powell’s comments on a softening labor market have strengthened market bets on rate cuts in the coming months.

Futures Update:  U.S. stock futures rose on Thursday as investors assessed a fresh wave of corporate earnings and anticipated another potential Federal Reserve rate cut this month. Dow futures were up 0.4%, S&P 500 futures gained 0.4%, and Nasdaq 100 futures climbed 0.6%. On Wednesday, the S&P 500 and Nasdaq advanced, while the Dow closed slightly lower, with early gains moderating despite generally positive earnings from ASML, Bank of America, and Morgan Stanley.

Stocks experienced significant fluctuations throughout Wednesday’s trading session, continuing the notable volatility seen the previous day. The S&P 500 fell by 26.77 points, or 0.40%, closing at 6,671.07. From a technical perspective, the index stayed above important support levels and maintained an upward trend, suggesting the possibility of further gains in the near term. However, today's trading may remain range-bound. Additionally, the 14-day Relative Strength Index (RSI) is trending upward, indicating a bullish outlook. Key support levels are around 6,640, with resistance expected near 6,750.