US Stock Futures Rally as Amazon, Apple Lift Mood: Markets Wrap

(Bloomberg) -- US equity-index futures advanced as strong earnings from Amazon.com Inc. and Apple Inc. lifted sentiment after a brief pause in the global stock rally.

Futures on the S&P 500 rose 0.6% and those on the Nasdaq 100 gained 1.2% after the underlying indexes slipped Thursday amid weakness in tech stocks. Apple rose in late trading as it beat revenue estimates and offered a bullish holiday forecast. Amazon surged 13% in extended trading after reporting its fastest cloud unit growth in nearly three years.

Asian shares rose 0.2% after paring some of their early gains, still hovering near record highs. The Nikkei 225 index jumped 2% to a new all-time peak, while gauges in mainland China and Hong Kong fell by about 1%. Contracts indicated a slightly weaker open for European stocks.

Markets were mixed in other corners with gold sliding 0.7%, the fourth decline in five sessions. Treasury yields and a gauge of the dollar steadied. The yen strengthened after inflation in Tokyo advanced and the government said it’s monitoring the currency with a strong sense of urgency.

After-market gains in Apple and Amazon offered investors a brief respite from Thursday’s bruising session for megacap techs, amid lingering doubts over whether heavy AI spending will pay off. Meta Platforms Inc. drew record demand for its $30 billion bond sale, signaling that investors are looking past those concerns and continuing to bet on a rally that has added $17 trillion in market value since April.

“None of this means that the AI bubble is going to burst and that we’re on the cusp of a major reversal in the stock market,” said Matt Maley at Miller Tabak. “However, it does raise the odds that we could see a short-term pullback.”

The moves came after a selloff in several megacaps dragged down US stocks Thursday. Microsoft Corp. slid on underwhelming results, while Nvidia Corp. dropped as President Donald Trump said he didn’t discuss approving sales of Blackwell chips to China with Xi Jinping.

The largest technology companies are betting on an AI future powered by gigantic data centers filled with humming servers. Now that the staggering cost of this push is coming into sharper focus, it’s testing nerves on Wall Street. 

“The only takeaway that investors care about from big tech earnings is evidence of which company can stay in the AI race the longest,” said David Trainer at New Constructs. “None of these companies can keep up this huge spending on AI forever, and so those that find a way to profit first and the most from AI will be the winners.”

Meanwhile, the frenzy over AI has helped Asian stocks outperform the world this year. However, concentration risks are also brewing.

What Bloomberg strategists say...

Bubble concerns seem to have been pushed back further by the latest set of earnings. The AI boom is alive and well and broadening out far beyond just the US. There’s been plenty of volatility across markets this week as Presidents Trump and Xi finally met, but the AI theme is where investors look for signals regarding global equities.

— Garfield Reynolds,MLIV Asia Team Leader. Click here for the full analysis.

In China, factory activity slump worsened in October, reaching its longest decline in more than nine years as a deepening economic slowdown sets in during the final quarter.

On the trade front, Treasury Secretary Scott Bessent said he sees the US back at the negotiating table with China in a year. That came after Trump and Xi agreed to extend a tariff truce, roll back export controls and reduce other trade barriers in a landmark summit on Thursday.

Xi also warned against “breaking supply chains,” in his first public remarks after the landmark meeting with Trump that secured a one-year truce in the world’s biggest trade fight. Meanwhile, China also bought at least four more US soybean cargoes following the summit between Trump and Xi.

“The much-anticipated US-China trade agreement showed both sides willing to step away from recent escalations, but not willing to stand down from a longer-term competition,” said Paul Christopher at Wells Fargo Investment Institute.

Corporate News:

• Intel Corp. is in preliminary talks to buy artificial intelligence chip startup SambaNova Systems Inc., according to people familiar with the matter.
• ANZ Group Holdings Ltd. said cash profit for the second half of this year will be impacted by significant items amounting to A$1.1 billion ($720 million).
• Netflix Inc. is actively exploring a bid for Warner Bros Discovery’s studio and streaming business, Reuters reported, citing three sources familiar with the matter. Netflix also approved a 10-for-1 stock split.
• BYD Co. shares tumbled on Friday after the automaker reported a decline in third-quarter net income and revenue, missing analyst expectations.
• Hitachi shares jumped as much as 12%, the most since April, after posting better-than-expected quarterly income driven largely by its AI-related business.
• Nissan Motor Co. shares fell the most in two months after the embattled carmaker forecast a ¥275 billion ($1.8 billion) operating loss this year.
• Ford Motor Co. plans to invest about 32.50 billion rupees ($370 million) in India to make new engines, a person familiar with the matter said.

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.6% as of 2:09 p.m. Tokyo time
• Japan’s Topix rose 0.8%
• Australia’s S&P/ASX 200 rose 0.1%
• Hong Kong’s Hang Seng fell 0.9%
• The Shanghai Composite fell 0.7%
• Euro Stoxx 50 futures fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1571
• The Japanese yen rose 0.1% to 153.95 per dollar
• The offshore yuan was little changed at 7.1119 per dollar

Cryptocurrencies

• Bitcoin rose 2.3% to $109,938.73
• Ether rose 2.7% to $3,858.7

Bonds

• The yield on 10-year Treasuries was little changed at 4.10%
• Japan’s 10-year yield was unchanged at 1.650%
• Australia’s 10-year yield was little changed at 4.30%

Commodities

• West Texas Intermediate crude fell 0.6% to $60.18 a barrel
• Spot gold fell 0.7% to $3,998.14 an ounce

This story was produced with the assistance of Bloomberg Automation.

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