Technology stocks are taking another hit heading into Friday’s North American session. Disappointing earnings from Amazon and a sharp negative reaction to Intel’s results are adding to concerns about the spending, profitability and expectations surrounding the AI trade.
The weakness is concentrated in technology, with Nasdaq futures down 785 points and S&P futures down 84 points, while Dow futures are holding a modest 15-point gain. That divergence matters. Technology is leading the pressure, while the Dow is showing greater resilience.
Elsewhere, the U.S. dollar is mostly lower and Treasury yields are falling across the curve. Crude oil, however, is moving higher despite President Trump’s optimistic comments about an end to the Iran war. The combination leaves traders balancing weaker technology sentiment against an energy market that continues to signal concern.
Amazon and Intel deepen the technology selloff
Amazon missed expectations for both earnings and revenue. Intel beat adjusted EPS estimates but missed revenue expectations, and its shares are suffering a much larger decline.
The broader question for investors remains: Are the earnings and future cash flows strong enough to justify the spending and valuations associated with AI?
An earnings beat alone does not guarantee a positive stock reaction. Investors also assess guidance, margins, capital spending and how much good news was already reflected in the share price. Sandisk’s decline despite beating both supplied estimates illustrates that distinction.
The earnings comparisons and early share reactions are currently showing:
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Intel: Adjusted EPS $0.52 vs $0.41 (BEAT); revenue $16.50 billion vs $16.60 billion (MISS). Shares down 25.70%.
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Amazon: EPS $1.89 vs $1.97 (MISS); revenue $201.90 billion vs $202.20 billion (MISS). Shares down 6.68%.
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Gilead Sciences: Adjusted EPS $2.55 vs $2.19 (BEAT); revenue $8.30 billion vs $7.80 billion (BEAT). Shares up 4.41%.
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Sandisk: Adjusted EPS $49.51 vs $46.20 (BEAT); revenue $11.031 billion vs $10.639 billion (BEAT). Shares down 8.20%.
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Starbucks: Adjusted EPS $0.80 vs $0.72 (BEAT); revenue $9.10 billion vs $9.22 billion (MISS). Shares up 0.30%.
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Pinterest: Revenue $1.17 billion vs $1.21 billion (MISS). Shares down 8.18%.
U.S. stock-index futures:
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Dow industrial average futures: Up 15 points.
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S&P 500 futures: Down 84 points.
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Nasdaq 100 futures: Down 785 points.
ECB officials: Yesterday’s hold leaves further hikes in play
The morning after the ECB left rates unchanged, officials are reinforcing the message that the inflation battle is unfinished. The common thread is a willingness to tighten further, with differences over how quickly action may be needed and how much tightening financial markets are already delivering.
Martin Kocher — a conditional warning about further tightening
Kocher said inflation risks have clearly increased and that a monetary policy response will be necessary if conditions do not improve soon. His comments suggest limited patience with persistent inflation pressure, while acknowledging the risks of acting prematurely.
The message for traders: yesterday’s unchanged decision should not be interpreted as confidence that inflation is under control.
Fabio Panetta — further hikes may be needed, but bond yields matter
Panetta said more rate increases may be necessary and warned that the increase in core inflation could become more pronounced early next year. However, he also stressed that the ECB must consider the recent rise in longer-term bond yields when calibrating policy.
Higher market borrowing costs can restrain demand without an additional ECB hike. Panetta also left room to adjust policy promptly if international conditions improve or financial tensions slow inflation.
His message is conditional: further tightening remains possible, but the ECB must assess how much restraint is already working through the economy.
Joachim Nagel — ready to act, with limited second-round effects so far
Nagel said policymakers would act decisively if needed, while noting that significant second-round effects have not appeared thus far.
That distinction matters. An energy-price shock can lift headline inflation directly. The greater concern is whether businesses and workers respond in ways that embed higher inflation in broader prices and wages.
The overall ECB message: The hold preserves flexibility, but further hikes remain an option. Persistent core inflation would strengthen the case for action, while higher bond yields and an improvement in the energy outlook could reduce the need for additional tightening.
Trump talks up an end to the Iran war, but oil moves higher (and the stocks are tumbling ahead of the election next week)
President Trump said in an interview this morning that the Iran war would end very soon, “one way or another,” and that gasoline prices would decline.
Separately, in a Truth Social post, he asserted that inflation is way down under his administration and that incomes for people and companies are higher. Those are the president’s claims; traders will continue to judge the inflation outlook through incoming data and energy prices.
The attached Al Arabiya report, citing sources, says the U.S. has informed mediators that Iran abandoning its nuclear programme is the basis for negotiations. Mediators are reportedly discussing access for inspectors to Iran’s nuclear sites in exchange for the release of some frozen funds.
That points to diplomatic discussions, but it does not establish an agreement. The gap between discussing terms and securing an enforceable settlement remains important for markets.
For now, crude is moving in the opposite direction to the president’s anticipated price relief. WTI is at $104.13, up $2.13 or 2.09%. The price action suggests traders still require evidence of an improvement in the supply and security outlook.
U.S. dollar lower against most major currencies
The dollar is lower against six of the seven major currencies in the snapshot, with the Australian dollar unchanged.
The Swiss franc is the strongest against the dollar, followed by the Japanese yen and British pound. The Australian dollar is the weakest performer within this group, holding flat.
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EURUSD:1.1194, up 0.14%.
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USDJPY:157.03, down 0.42%.
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GBPUSD:1.3426, up 0.38%.
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USDCHF:0.8205, down 0.45%.
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USDCAD:1.3956, down 0.23%.
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AUDUSD:0.7027, unchanged.
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NZDUSD:0.5645, up 0.21%.
The gains in the franc and yen are consistent with defensive positioning, although the dollar’s broader retreat shows that the currency moves extend beyond those two traditional havens.
Currency ranges: USDJPY is testing the bottom
The supplied session ranges, from low to high, are:
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EURUSD:1.1174–1.1214 — 40 pips. The 1-month average 67 pips
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USDJPY:157.00–157.89 — 89 pips. The 1-month average 72 pips.
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GBPUSD:1.3375–1.3433 — 58 pips. The 1-month average 84 pips
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USDCHF:0.8195–0.8247 — 52 pips.. The 1 month average 52 pips too
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USDCAD:1.3951–1.3992 — 41 pips.The 1 month average 63 pips.
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AUDUSD:0.7018–0.7043 — 25 pips. The 1 month average 43 pips
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NZDUSD:0.5625–0.5651 — 26 pips. The 1 month average 44 pips.
USDJPY is trading just above its session low, while GBPUSD is close to its high. Those locations make the respective extremes immediate reference points for a continuation or a failed break.
Treasury yields fall, led by the intermediate maturities
U.S. yields are lower across the curve, with the five-year yield down approximately 10 basis points. Slower economy will do that.
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2-year:4.5689%, down 8.71 basis points.
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5-year:4.7021%, down 9.99 basis points.
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10-year:4.9083%, down 8.07 basis points.
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30-year:5.2815%, down 4.75 basis points.
Falling yields can provide some valuation support for equities, but that support is being overwhelmed in technology by the earnings reaction. For currencies, lower U.S. yields are also consistent with the dollar’s softer tone.
European 10-year yields are mixed: Germany is at 3.327%, France at 4.951%, the UK at 5.276%, Spain at 3.950% and Italy at 4.495%. France stands out with its yield rising while the others shown are lower.
European stocks mostly lower
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Germany’s DAX:25,838.35, down 0.77%.
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France’s CAC 40:7,969.03, down 0.01%.
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UK’s FTSE 100:10,734.24, up 0.11%.
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Spain’s IBEX:18,750.20, down 0.57%.
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Euro Stoxx 50:18,692.19, down 0.88%.
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Italy’s FTSE MIB:49,463.93, down 1.08%.
Oil rises while metals and Bitcoin retreat
The commodity snapshot shows a clear divergence between energy and metals. Gold is back below the $4000 level. Bitcoin is below the $80000 level.
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WTI crude oil:$104.13, up $2.13 or 2.09%.
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Spot gold:$3,967.94, down approximately $52.63 or 1.31%.
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Silver:$50.2332, down 3.66%.
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Copper:$6.5170, down 1.29%.
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Bitcoin:$77,335, down $458 or 0.59%.
Gold’s decline despite lower Treasury yields and a softer dollar shows why traders cannot rely on one relationship alone. The price action remains the final barometer.
North American calendar: Employment costs and Canadian growth
The main scheduled releases are:
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8:30 AM ET — U.S. Employment Cost Index, Q3 — Forecast: +0.8% q/q — Previous: +0.9%.
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8:30 AM ET — Canadian GDP, August — Forecast: +0.2% m/m — Previous: 0.0%.
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9:45 AM ET — Chicago PMI, October — Previous: 58.8.
The Employment Cost Index is particularly relevant to the question of persistent inflation. A stronger reading would suggest compensation pressures remain firm, while a softer result would offer some reassurance on labor costs. Canadian GDP will provide the next domestic growth test for the Canadian dollar.
Today is also the final trading day of October. Month-end flows could complicate intraday moves alongside earnings, economic data and geopolitical headlines.
This article was written by Greg Michalowski at investinglive.com.