Morning Brief

US stocks edge lower after a busy night of earnings and policy headlines. President Trump and China’s Xi Jinping agreed to a one-year trade truce at their meeting in South Korea, cutting fentanyl-related tariffs in half while China resumes rare-earth exports and soybean purchases worth 12 million metric tons — about 10% of the U.S. annual crop. The deal pauses further escalation but keeps the average U.S. tariff rate near 47%. Markets reacted coolly as investors stayed focused on Big Tech earnings and Fed policy. Alphabet (GOOG) jumped after a surge in AI-driven cloud revenue, while Meta (META) fell as its CapEx outlook ballooned to up to $72B for 2025. Microsoft (MSFT) rose after CFO Amy Hood said demand remains “capacity constrained,” even after billions in AI infrastructure spend. Meanwhile, Fed Chair Jerome Powell signaled caution after delivering another 25 bp rate cut, warning that “a further reduction in December is not a foregone conclusion.” The market slashed odds of another cut to 60% as internal Fed divisions widen.

Takeaways:

US and China reach one-year trade truce; tariffs cut on fentanyl goods, soybean purchases resume

Fed cuts rates but warns no preset path; December cut odds fall sharply

Big Tech CapEx explodes 89% year-over-year — AI spending dominates Q3

Alphabet rallies on strong cloud results; Meta sinks on CapEx surge

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US stocks rose as Nvidia (⁠NVDA⁠) became the first company to hit a $5 trillion market cap, driven by record AI chip demand and bullish guidance from CEO Jensen Huang following the company’s GTC event. Analysts at Bernstein say Nvidia’s next-generation Blackwell and Rubin chips could generate over $500B in data center revenue over the next six quarters. The milestone comes ahead of a massive week for Big Tech earnings, with Alphabet (GOOG), Meta (META), and Microsoft (MSFT) set to report after today’s close, followed by Apple (AAPL) and Amazon (AMZN) on Thursday. On the macro front, the Federal Reserve is expected to cut rates by 25 basis points this afternoon, with Chair Jerome Powell’s press conference focusing on signals on future policy moves. Boeing (BA) fell after posting a wider-than-expected loss and taking a $4.9B charge on its delayed 777X jet program, now pushed to 2027. Meanwhile, Verizon (VZ) posted modest subscriber losses under new CEO Dan Schulman, Caterpillar (CAT) beat estimates on surging AI-related energy equipment demand, and Fiserv (FI) plunged after slashing guidance and announcing a board shake-up.

Takeaways:

Nvidia becomes the first company ever to hit $5 trillion market cap

Fed expected to cut rates by 25 bps; investors eye Powell’s tone

Boeing posts $4.9B charge, delays 777X to 2027

Verizon, Caterpillar, and Fiserv move on earnings results

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US stocks edge higher as the Federal Reserve kicks off its two-day policy meeting and Big Tech earnings loom. Amazon (AMZN) announced it will cut 14,000 jobs across logistics, cloud, payments, and gaming — its most extensive layoffs since 2022 — as CEO Andy Jassy pushes to make the company “leaner and faster” through AI-driven automation. UPS (UPS) also said it will cut 34,000 positions as part of a massive restructuring, closing nearly 100 facilities to reduce costs. Meanwhile, PayPal (PYPL) rallied after strong earnings and news of a significant partnership with OpenAI to integrate its digital wallet directly into ChatGPT, allowing in-app payments starting in 2026. In breaking news, OpenAI finalized its recapitalization with Microsoft (MSFT), creating a new $130B for-profit entity under the OpenAI Foundation and granting Microsoft a 27% stake valued at $135B. The agreement includes a $250B Azure commitment and exclusive IP rights until artificial general intelligence is achieved. Microsoft stock rose 3.7% on the news.

Takeaways:

Amazon to cut 14,000 jobs across multiple divisions in biggest layoffs since 2022

UPS to eliminate 34,000 positions as part of primary transformation strategy

PayPal surges on strong earnings and new ChatGPT payment integration

OpenAI finalizes recapitalization; Microsoft gains 27% stake valued at $135B

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US stocks open higher as hopes rise for a U.S.–China trade truce. Treasury Secretary Scott Bessant told NBC’s Meet the Press that the two countries have reached a “very successful framework” for a deal ahead of President Trump’s Thursday meeting with President Xi Jinping. Futures rallied on the comments, with all three major indexes set to open at record highs. Meanwhile, the Federal Reserve is expected to cut rates by 25 basis points on Wednesday — the second consecutive meeting with a cut — even as policymakers continue to operate without complete government data amid the ongoing shutdown. Big Tech takes center stage this week, with five of the Magnificent Seven — Meta (META), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Apple (AAPL) — all set to report earnings. Investors will closely watch AI spending, ad revenue, and capital expenditures trends as companies continue massive data center buildouts.

In trending tickers, Novartis (NVS) agreed to acquire Avidity Biosciences (RNA) for $12B, expanding its rare disease pipeline. Huntington Bancshares (HBAN) announced a $7.4B deal to acquire Cadence Bank (CADE), extending its footprint across the South. And Keurig Dr Pepper (KDP) raised its full-year forecast while revealing plans to spin off its coffee business after acquiring Peet’s Coffee from JAB Holdings.

Takeaways:

US–China trade truce talks lift markets; tariff hikes may be delayed

Fed expected to cut rates again as officials operate without complete data

Meta, Microsoft, Alphabet, Amazon, and Apple headline tech earnings week

Novartis buys Avidity for $12B; Huntington to buy Cadence Bank; Keurig to spin off coffee unit

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US stocks surged after September CPI came in cooler than expected, rising 3.0% yearly versus the 3.1% forecast by economists. The report, the first major economic release in 23 days due to the government shutdown, cements expectations for an October rate cut, with futures now pricing in a 99% probability. Investors cheered the data as the S&P 500 (^GSPC) and Nasdaq (^IXIC) hit new all-time highs. The bond market also rallied, with the 10-year yield dipping below 4% for the first time since April. Meanwhile, President Trump abruptly canceled trade talks with Canada after an anti-tariff ad featuring Ronald Reagan aired there, calling it “an insult to American workers.” Intel (INTC) jumped 6% after beating on both revenue and earnings, citing stronger PC demand and narrowing foundry losses. CEO Pat Gelsinger said Intel is “making steady progress to rebuild,” but cautioned there’s still a long road ahead. Target (TGT) announced an 8% corporate headcount cut, Deckers (DECK) sank on weak guidance, and Procter & Gamble (PG) rose after topping estimates while warning the consumer environment remains “stable but not great.”

Takeaways:

CPI rises 3.0% vs. 3.1% expected, cementing odds of an October Fed rate cut

Intel beats on earnings and revenue as PC and data center sales improve

Trump cancels trade talks with Canada over anti-tariff ad flap

Target cuts 8% of corporate staff; P&G beats, Deckers slumps on outlook

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US stocks open slightly lower as Tesla (TSLA) shares slide following mixed Q3 results. Revenue topped expectations at $28B, but operating profit plunged 40% year over year as price cuts weighed on margins. CEO Elon Musk urged shareholders to approve his proposed $1T pay package, calling proxy advisors “corporate terrorists” while reiterating his need for 20% voting control. Tesla also revealed plans to expand its robotaxi service to up to 10 metro areas by year-end, though Musk struck a cautious tone on progress. Oil prices spiked after the Trump administration imposed new sanctions on Russian energy giants Rosneft and Lukoil, barring many foreign entities from doing business with them. Meanwhile, the bond market remained in flux as traders awaited missing labor data due to the government shutdown, with the 10-year Treasury yield hovering below 4%. In corporate news, American Airlines (AAL) posted a surprise profit, Honeywell (HON) raised guidance, and Dow (DOW) narrowed losses. Southwest Airlines (LUV) also posted an unexpected profit and reaffirmed record holiday demand — CFO Tom Doxey told Yahoo Finance the carrier’s new bag fees, seat assignments, and premium upgrades are “on track and working.”

Takeaways:

Tesla profit drops 40% as price cuts squeeze margins; Musk defends $1T pay plan

Oil surges after new US sanctions on Russian energy majors

Bond market stabilizes below 4% yield amid ongoing data blackout

Southwest CFO says bag fees, seat changes driving profits and record holiday outlook

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US stocks open mixed as earnings season heats up and Netflix (NFLX) shares tumble 8% after the streaming giant missed expectations on both revenue and profit. The company blamed an unexpected tax hit in Brazil but reaffirmed its full-year guidance and projected stronger ad-tier growth heading into 2025. Netflix executives said the platform will more than double advertising revenue next year, helped by new deals with Amazon (AMZN) and Spotify (SPOT), while ruling out interest in acquiring legacy media networks like Warner Bros. Discovery (WBD). Gold prices extended declines after suffering their worst one-day drop in over a decade, falling nearly 8% from record highs. Analysts at UBS said the pullback is likely technical after a massive 60% year-to-date rally. Meanwhile, Tesla (TSLA) reports after the bell, with analysts watching margins, EV demand, and CEO Elon Musk’s proposed pay package. Investors expect Tesla to highlight growth opportunities in robotaxi and AI infrastructure after the expiration of key EV tax credits. In trending tickers, AT&T (T) gained on strong subscriber growth, Texas Instruments (TXN) slipped on weak chip guidance, and Beyond Meat (BYND) surged 1,300% in four days amid a new meme stock frenzy.

Takeaways:

Netflix plunges after Q3 miss but touts ad-tier and streaming growth

Gold drops 8% from record highs after decade-best rally

Tesla earnings ahead: investors eye margins, demand, and robotaxi updates

Meme stocks roar back as Beyond Meat skyrockets 1,300%

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US markets open mixed as earnings season heats up, with General Motors (GM) and Coca-Cola (KO) topping estimates while warning of tariffs and shifting consumer demand. GM stock jumped more than 10% after raising full-year guidance, driven by strong truck sales and tariff relief measures that offset $4.5B in costs. CEO Mary Barra struck an optimistic tone, calling new policies “a win for American manufacturers.” Coca-Cola beat expectations but noted slowing demand for soft drinks, while its zero-sugar and sports drink lines showed double-digit growth. Aerospace and defense stocks, including General Electric (GE), RTX (RTX), and Lockheed Martin (LMT), rose after strong commercial and defense demand prompted guidance hikes. Meanwhile, Warner Bros. Discovery (WBD) confirmed it’s reviewing strategic alternatives following takeover interest from multiple parties, including Paramount Global (PARA). The company said it remains committed to splitting into two divisions by mid-2025 but is open to offers for its studio business.

Takeaways:

GM raises full-year outlook; truck and SUV sales offset tariff costs

Coca-Cola beats expectations but warns of softening demand

Aerospace stocks rally on record orders; GE and RTX lift guidance

Warner Bros. Discovery explores potential breakup or sale amid takeover interest

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US markets open higher as stocks rebound from last week’s volatility despite a major Amazon Web Services (AMZN) outage that took down large portions of the internet overnight, including platforms like Coinbase (COIN), Robinhood (HOOD), and Disney+ (DIS). Amazon says the issue has been mitigated and services are returning to normal. Investors now turn their focus to a packed week of corporate earnings — with Tesla (TSLA), Netflix (NFLX), Coca-Cola (KO), and Intel (INTC) all set to report. The long-delayed September CPI report is also finally due Friday, giving the Fed its first real data point in weeks amid the government shutdown. On Wall Street, traders expect the reading to show inflation holding at 3.1% year over year, still well above the Fed’s 2% target. Meanwhile, luxury giant Kering (KER.PA) sold its beauty division to L’Oréal (OR.PA) for $4.7B, and Apple (AAPL) climbed after a Loop Capital upgrade on stronger-than-expected iPhone 17 sales.

Takeaways:

Massive AWS outage briefly takes down major sites like Coinbase, Robinhood, and Disney+

Tesla, Netflix, Coca-Cola, and Intel headline a busy week for earnings

September CPI finally set for release after shutdown delays; Fed in focus

Kering sells beauty arm to L’Oréal for $4.7B; Apple upgraded on strong iPhone demand

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US stocks open mixed after President Trump told Fox Business the 100% tariff on China “won’t stand,” calling high tariffs “not sustainable.” Futures turned higher on hopes of easing trade tensions ahead of a planned Trump–Xi meeting in two weeks. The optimism comes after a turbulent Thursday that saw credit fears hit regional lenders. Zions Bancorporation (⁠ZION⁠) and Western Alliance (⁠WAL⁠) disclosed fraud-related loan losses that sparked a sell-off in bank stock. The 10-year Treasury yield fell below 4% for the first time since April as investors fled to safety. Gold continued its record run, nearing $4,400 an ounce — its best week since 2020 — while bitcoin (BTC-USD) dropped 8% amid liquidations and shifting risk sentiment. The White House is also preparing to ease tariffs on automakers, extending duty relief on imported car parts for five years after heavy lobbying from Ford (F) and General Motors (GM). Meanwhile, American Express (AXP) beat earnings expectations as affluent spending remained strong, and EssilorLuxottica (EL.PA) hit record highs on robust eyewear sales and AI-powered smart glasses developed with Meta (META).

Takeaways:

Trump says 100% China tariff “won’t stand,” easing trade tensions

Regional banks slide after fraud losses at Zions and Western Alliance

Gold heads for best week since 2020; bitcoin sinks 8%

Automakers win tariff relief; AmEx and EssilorLuxottica report strong results

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