U.S. Stock Market Outlook | Three Major Index Futures Rise Together, ASML's Performance Brings Good News for the AI Industry

1. As of October 15th (Wednesday) before the US stock market opens, the three major US stock index futures are all up. As of the time of writing, Dow futures are up 0.56%, S&P 500 index futures are up 0.76%, and Nasdaq futures are up 0.99%.

1. As of the time of writing, the German DAX index is up 0.02%, the UK FTSE 100 index is down 0.38%, the French CAC40 index is up 2.30%, and the Euro Stoxx 50 index is up 1.28%.

1. As of the time of writing, WTI crude oil is up 0.73%, priced at $59.13 per barrel. Brent crude oil is up 0.51%, priced at $62.7 per barrel.

Market News

Powell hints at another rate cut this month, emphasizing unchanged risks in the labor market. Federal Reserve Chairman Jerome Powell stated that the Fed is likely to implement another 25 basis point rate cut later this month, despite the severe impact of the US government shutdown on its assessment of economic conditions. In a speech at the National Association for Business Economics annual meeting on Tuesday, Powell noted that the economic outlook seems unchanged since policymakers lowered rates in September and anticipated two more cuts this year. Julia Coronado, founder of research firm MacroPolicy Perspectives and former Fed economist, said, "The rate cut in October has been implemented, and there is currently no new information that changes our view that there are still downside risks in the labor market." Powell repeatedly mentioned the slow pace of hiring and pointed out that this situation may worsen further.

Copper prices rebound after Powell's dovish remarks, industry insiders expect prices to reach $12,000 per ton. Following Federal Reserve Chairman Powell's hint at another possible rate cut this month, copper prices rebounded. Some industry insiders have indicated that copper prices could reach $12,000 per ton. Copper prices had previously fluctuated significantly due to geopolitical tensions. In his speech on Tuesday, Powell stated that the Fed is likely to implement another 25 basis point rate cut later this month, despite the severe impact of the US government shutdown on its assessment of economic conditions. Powell repeatedly mentioned the slow pace of hiring and pointed out that this situation may worsen further.

US government shutdown causes inflation data to face "shutdown crisis," accuracy of October CPI may be compromised. If the US government shutdown continues, one of the country's most important inflation statistics may not only be unable to be released, but its data quality may also be compromised Policymakers, economists, and investors have begun to worry that the Consumer Price Index (CPI) for October, scheduled for release next month, will be affected by the government shutdown. Although the U.S. Bureau of Labor Statistics (BLS) received special permission to recall some employees to compile the September CPI data, the agency has been unable to collect any new price information since the government shutdown began on October 1. "From now on, data accuracy will decline," said Omar Sharif, president of Inflation Insights LLC, in an interview on October 9, noting that the government shutdown had already lasted over a week. "By the third week, data quality will become very poor, and there may even be no data at all."

Morgan Stanley raises a warning: the U.S. is "slowly heading towards bankruptcy," and massive debt combined with tariffs as a "painkiller" cannot prevent the crisis. David Kelly of JP Morgan warned this week that while the U.S. is "heading towards bankruptcy," the process is slow enough that it has not yet triggered market panic. Currently, U.S. national debt has surpassed $37.8 trillion, with interest payments exceeding $1.2 trillion. Kelly pointed out that even if the economy maintains moderate growth, the debt-to-GDP ratio, which has reached 99.9%, may continue to rise. Although tariff revenues can provide some relief and temporarily ease deficit pressures, he cautioned that political decision-making changes or economic slowdowns could quickly worsen the fiscal situation, advising investors to diversify their investments to reduce reliance on U.S. assets before the "slow bankruptcy" accelerates.

Individual Stock News

Morgan Stanley (MS.US) Q3 earnings exceeded expectations across the board, with a rebound in investment banking as a highlight and stock business contributing core momentum. Morgan Stanley reported net revenue of $18.22 billion for the third quarter, an 18% year-on-year increase, surpassing the estimated $16.64 billion; earnings per share for the third quarter were $2.80, with a return on equity of 18%, exceeding the estimated 13.4%. Among them, investment banking grew by 44% year-on-year, with revenue reaching $2.108 billion; revenue from stock sales and trading was $4.12 billion, far exceeding the estimated $3.41 billion.

Abbott (ABT.US) Q3 revenue of approximately $11.37 billion fell short of expectations. Abbott, a leader in the U.S. healthcare sector, reported quarterly revenue that fell below Wall Street analysts' expectations, primarily due to weak trends in its diagnostics and nutrition businesses that could not offset strong demand for its medical device products. As a result of the negative impact on performance, the company's stock price fell nearly 3% in pre-market trading. Abbott's overall revenue for the third quarter was approximately $11.37 billion, slightly below the average analyst expectation of $11.40 billion.

Dollar Tree (DLTR.US) forecasts a 12-15% annual increase in earnings per share over the next three years. Dollar Tree announced on Wednesday that it expects its earnings per share to grow at an annual rate of 12-15% over the next three years. The company, headquartered in Chesapeake, Virginia, also stated that thanks to cost advantages, its earnings per share for fiscal year 2026 are expected to achieve "nearly 20%" growth. This earnings forecast was released ahead of an investor presentation scheduled for later on Wednesday. After selling its underperforming Family Dollar business for approximately $1 billion, Dollar Tree is adjusting its strategic focus under CEO Mike Creedon According to reports, the $1 billion sale price is far lower than the nearly $9 billion cost when it acquired the business ten years ago. So far this quarter, the company's same-store sales have increased by 3.8%, exceeding analysts' average expectation of 3.7%. The company also maintains its previous performance guidance for this quarter and the entire year.

M&A activity rebounds benefiting Wall Street, Bank of America (BAC.US) exceeds expectations in Q3. Bank of America exceeded expectations in its Q3 performance, driven by a long-awaited rebound in M&A activity that boosted investment banking growth, and net interest income was higher than analysts' forecasts. The financial report shows that Bank of America's Q3 revenue was $28.09 billion, a year-on-year increase of 11.0%, with earnings per share of $1.06, surpassing market expectations. Investment banking revenue grew by 43% to $2.05 billion, better than analysts' expectations of $1.65 billion. M&A advisory fees surged by 51% to $583 million, while equity and debt underwriting revenues increased by 34% and 42%, respectively. Bank of America's key revenue source—net interest income—grew by 9.1% to $15.2 billion. Analysts had previously expected this revenue (i.e., loan interest income minus deposit interest expenses) to increase by 7.6%. Bank of America's net profit for the three months ending in September jumped by 23% to $8.47 billion.

The AI arms race intensifies, "power engine" ASML (ASML.US) Q3 orders exceed expectations. Due to hundreds of billions of dollars in investments in AI infrastructure driving strong demand for chip manufacturing equipment, ASML's Q3 orders exceeded analysts' expectations. The Dutch semiconductor equipment manufacturer stated that its order amount for the quarter reached €5.4 billion (approximately $6.3 billion). According to data compiled by Bloomberg, analysts had previously expected orders to be €4.9 billion. Data shows that ASML's Q3 sales reached €7.5 billion, exceeding expectations; net sales reached €7.5 billion (approximately $8.71 billion), with a gross margin of 51.6% and net profit of €2.1 billion (approximately $2.44 billion). ASML predicts that sales in Q4 2025 will be between €9.2 billion ($10.69 billion) and €9.8 billion ($11.39 billion), with a gross margin of 51% to 53%.

iPhone 17 delivers! Apple (AAPL.US) Q3 shipments in China grow 0.6% against the trend. According to data released by research firm IDC on Wednesday, despite weak demand in the Chinese smartphone market, Apple's (AAPL.US) shipments in China still grew by 0.6% year-on-year in Q3, reaching 10.8 million units. During this period, Apple ranked second in shipments with a market share of 15.8%. Specific data shows that total smartphone shipments in China fell by 0.6% year-on-year in Q3, to 68.4 million units. The decline was even more pronounced in Q2, reaching 4%. IDC senior smartphone analyst Will Wong stated, "Apple's cost-effective base model iPhone 17 successfully attracted budget-conscious consumers, which helped it achieve slight growth and improve its ranking compared to the previous quarter." Among the top three smartphone brands in domestic shipments, Apple was the only brand to achieve growth in shipments during the quarter Blood Sugar Reduction Effect Overwhelms Competitors! Eli Lilly (LLY.US) Oral Weight Loss Drug Successfully Completes Phase III Clinical Trials, Plans to Apply for Market Approval Next Year. Eli Lilly announced on Wednesday that its oral weight loss candidate orforglipron achieved its primary goals in two Phase III clinical trials targeting patients with type 2 diabetes, demonstrating the drug's potential in controlling blood sugar levels. The Indiana-based pharmaceutical company noted that based on the results of the ACHIEVE-2 and ACHIEVE-5 trials, the once-daily GLP-1 receptor agonist orforglipron is expected to become a new standard in the treatment of type 2 diabetes. According to preliminary results, the ACHIEVE-2 trial met its primary endpoint. Compared to the 0.8% reduction in the blood sugar medication Farxiga from AstraZeneca (AZN.US), orforglipron achieved a maximum reduction of 1.7% in the diabetes biomarker hemoglobin A1C levels. The ACHIEVE-5 trial also met its primary endpoint.

Important Economic Data and Event Forecast

Beijing time 20:30: U.S. October New York Fed Manufacturing Index.

Next day Beijing time 04:30: U.S. API Crude Oil Inventory Change for the week ending October 10 (10,000 barrels).

Beijing time 21:30: Federal Reserve Governor Michelle Bowman speaks.

Next day Beijing time 00:10: 2027 FOMC voting member and Atlanta Fed President Raphael Bostic speaks.

Next day Beijing time 00:30: Federal Reserve Governor Michelle Bowman speaks at the Nomura Research Forum.

Next day Beijing time 01:00: Federal Reserve Governor Christopher Waller speaks on artificial intelligence.

Next day Beijing time 01:35: 2025 FOMC voting member and Kansas Fed President Esther George speaks.

Next day Beijing time 02:00: Federal Reserve releases the Economic Conditions Beige Book.

Next day Beijing time 02:10: 2027 FOMC voting member and Atlanta Fed President Raphael Bostic speaks.

Earnings Forecast

Thursday morning: United Airlines (UAL.US)

Thursday pre-market: Taiwan Semiconductor Manufacturing Company (TSM.US)