U.S. Markets Steady as Earnings, Geopolitical Tensions, and Policy Outlook Shape Investor Sentiment

Index Update:  U.S. stock market was flat on Wednesday as investors weighed earnings against lingering U.S.–China trade tensions and the government shutdown. Netflix slid over 6% after a tax dispute in Brazil hit results, while Texas Instruments dropped 7.6% on a weak outlook. Thermo Fisher fell 4.7% despite strong results. In contrast, AT&T gained 2.4% on solid subscriber growth, and Intuitive Surgical jumped 17% after robust earnings. Tesla and IBM are set to report later in the day.

Market Movers:  On Tuesday, the top gainers were Beyond Meat, Inc. (+146.26%), followed by Minerva Neurosciences, Inc. (+140.98%). On the contrary Neuphoria Therapeutics Inc. (-68.51%), and OBOOK Holdings Inc. (-32.29%) declined the most the same day.

Commodities Update:  Oil prices rebounded on Wednesday amid renewed supply concerns and geopolitical tensions. WTI rose above $58 and Brent above $62 per barrel after the Trump–Putin summit was postponed over Moscow’s refusal to agree to a Ukraine ceasefire, raising fears of sanctions-related disruptions. U.S. crude inventories fell by 3 million barrels, while the Energy Department’s plan to add to the Strategic Petroleum Reserve signaled tighter supply. Meanwhile, gold prices extended their sharp decline, falling over 2% below $4,050 per ounce as investors took profits following a 5% plunge on Tuesday, driven by improved risk sentiment and easing U.S.–China trade tensions. Despite the pullback, gold remains up 60% year-to-date amid expectations of further Fed rate cuts and persistent geopolitical risks.

Macro Updates:  U.S. mortgage applications slipped 0.3% in the week ending October 17, marking the fourth straight weekly decline despite a 5 bps drop in mortgage rates. Refinance activity rose 4%, led by gains in conventional and FHA loans, while VA refinances fell 12%. Adjustable-rate mortgage (ARM) applications surged 16%, lifting their share to 11%. Meanwhile, purchase applications dropped 5%. The average 30-year fixed mortgage rate eased to 6.37%, the lowest in a month, following declines in Treasury yields.

Bonds Commentary:  The U.S. 10-year Treasury yield fell for a third straight session to 3.95%, its lowest in over a year, as markets anticipated further Fed rate cuts. The Fed is expected to lower rates by 25 basis points next week despite limited new data. Ongoing government shutdown concerns persisted after President Trump declined to meet Democratic leaders. Investors await Friday’s CPI report, which is expected to show a modest pickup in inflation, with core measures remaining stable.

Futures Update:  U.S. stock futures were steady on Wednesday as investors assessed a wave of corporate earnings, including Netflix’s Q3 results. Dow and S&P 500 futures each edged up 0.1%, while Nasdaq 100 futures dipped 0.1%. On Tuesday, the Dow hit a record high near 47,000, though concerns persisted over lofty valuations and the sustainability of the market rally.

Following significant gains in the previous two sessions, stocks exhibited a relatively lackluster performance during Tuesday's trading. The S&P 500 edged up by only 0.20 points, closing at 6,735.34. From a technical perspective, the index is currently hovering near a key resistance zone and formed a doji candle on the daily chart, indicating potential for a downward move in today's session. Additionally, the 14-day Relative Strength Index (RSI) may dip below the midpoint in the near-term, further suggesting a cautious outlook despite the overall positive bias. Key support levels are around 6,600, while resistance is expected near 6,800.