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postUS stocks returned to solid gains late Wednesday as markets remained alert over US-China trade tensions amid hopes for interest rate cuts and strong results from Wall Street banks.
The Dow Jones Industrial Average (^DJI) hovered around the flatline, while the S&P 500 (^GSPC) rose 0.4%. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) gained by 0.6%. All three indexes lost hold of bigger gains earlier in the session, continuing market choppiness after Tuesday’s rocky session.
The stronger start to the session followed a solid start to earnings season, which buoyed market spirits in the face of US-China trade friction and a US government shutdown with no end in sight.
On Wednesday morning, Bank of America (BAC) posted a 23% jump in profit, becoming the latest big US bank to benefit from this summer’s bonanza of big deals on Wall Street. Morgan Stanley (MS) saw its profits surge 45% in what its CEO hailed as an “outstanding” quarter.
Meanwhile, comments from Jerome Powell also lifted spirits. The Federal Reserve Chair said that “downside risks to employment appear to have risen,” implying more rate cuts are on the cards. Investors closely scrutinized Powell’s remarks, given the current lack of insight into the economy as the federal stoppage delays the release of key data.
Investors have cemented bets on a rate cut later this month, and odds of a rate cut in December have jumped in recent days to around 96%.
But the US-China trade tensions that have unsettled markets continued to bubble, after President Trump said he was considering an embargo on cooking oil from China in response to its cut in purchases of US soybeans. The threat follows China’s fresh sanctions on five US subsidiaries of South Korean shipbuilder Hanwha.
Treasury Secretary Scott Bessent on Wednesday raised hopes on that front, saying Trump was still planning to meet with Chinese leader Xi Jinping later this month.
At the same time, the Trump administration is preparing for the government shutdown to drag on. A list of federal programs earmarked for cuts is expected this week, and the White House budget office is scrambling to find ways to pay military members and law enforcement.
LIVE 19 updates
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Progressive stock tumbles 6% after missing earnings estimates
Progressive (PGR) stock tumbled over 6% on Wednesday after the company’s earnings missed analyst expectations. It was the second-worst-performing stock in the S&P 500 (^GSPC) for the day, behind Axon Enterprise (AXON).
The insurance giant reported profits of $4.44 per share, underperforming Wall Street estimates for earnings of $5.30 per share. Revenue also fell short, with $21.3 billion reported versus the estimated $21.6 billion. Net income dropped 48% year over year.
Progressive experienced a $950 million expense in September due to a 2023 policy change in Florida that limits profits made on auto insurance.
“Despite actions to lower rates in the last year, it is probable that our personal auto profit in Florida for the 2023 to 2025 period will exceed the statutory profit limit that a Florida statute imposes…,” the company said. “In such event, we would need to credit any profit above the limit to all Florida personal auto policyholders active at December 31, 2025.”
Read more live coverage of corporate earnings.
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Bitcoin disapoints as gold soars to new highs
Bitcoin (BTC-USD) has failed to maintain its ‘Uptober’ gains as investors move risk-off amid the US-China tariff turmoil.
The world’s largest cryptocurrency has typically experienced its strongest month of the year in October. While it started out the month soaring to new highs, it has since given up some of those, hovering below $112,000 for the past couple of sessions.
Meanwhile spot gold (GC=F) hovered near $4,200 per troy ounce on Wednesday after crossing the $4,000 mark earlier this month.
“Right now capital is clearly favoring gold due to its momentum and reduced volatility profile,” Sean Farrell, head of digital asset strategy at Fundstrat told Yahoo Finance
“There are also structural buyers in central banks which provides a quasi-backstop to the trade [for gold]. This makes it favored over BTC right now. I do think we eventually see a rotation,” he added.
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AMD stock jumps 6% amid bullish takes on Wall Street
AMD (AMD) stock extended a recent upswing on Wednesday, jumping 8% in midday trading.
The AI chipmaker and rival to Nvidia (NVDA) has garnered votes of confidence from Wall Street analysts since its recent multiyear, multibillion-dollar deal with OpenAI (OPAI.PVT). Investor optimism over the company was also boosted by a deal with Oracle (ORCL) to deploy 50,000 of its GPUs (graphics processing units, or AI chips) announced Tuesday.
HSBC analyst Frank Lee on Wednesday raised his price target on AMD shares to $310 from $185, while Wedbush analyst Matt Bryson raised his price target on shares to $270 from $190.
“AMD has clearly provided future certainty around GPU demand announcing new agreements that promise to substantially lift future GPU revenues,” Bryson wrote in his note to clients.
Those bullish targets followed a note from Wolfe Research analyst Chris Caso on Tuesday upgrading AMD stock to Outperform from his previous Peer Perform rating, citing the chipmaker’s OpenAI deal.
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Regional bank stocks fall after earnings
Several regional bank stocks fell on Wednesday afternoon after the companies reported third quarter earnings.
Shares of Citizens Financial Group (CFG) dropped 1%, while PNC (PNC) fell more than 2%, as its outlook was softer than expected and as it saw expensive commercial deposits weigh on net interest margins.
Memphis-based First Horizon (FHN) led the declines, with the stock dropping over 10%. First Horizon reported that deposits declined by $52 million year over year.
The stock reaction in regional banks juxtaposed the strength in the large Wall Street banks’ results and their stocks’ move higher. Bank of America (BAC) and Morgan Stanley (MS) shares were up 3% and 5%, respectively, on the back of a dealmaking boom and robust trading activity.
Additional regional banks, Fifth Third (FITB) and Comerica (CMA), will report earnings on Friday, providing investors with further clues about the state of household balance sheets. First Horizon CEO Bryan Jordan noted that the US economy, in the bank’s view, “continues to perform reasonably well.”
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Australian stocks benefit from US-China trade war
Some Australian stocks are benefiting from the US-China trade war.
Cooking oil producer Australian Oilseeds (COOT) saw its stock rise about 260% to $3.48 after President Trump threatened to cut off US business with Chinese producers.
“I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act,” he said in a Truth Social post on Wednesday. “We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution.”
Meanwhile, shares of Australian miners with critical minerals projects such as Nova Minerals (NVA) and Resolution Minerals Ltd. (RML.AX) ripped higher on Tuesday as the companies were set to play a role in talks between the Australian government and the Trump administration as the US looks to diversify its critical minerals and rare earths supply chain from China.
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United Airlines earnings preview: Premium, corporate spending in focus as rival Delta takes off
Yahoo Finance’s Pras Subramanian reports:
Read the full story here.
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Apple stock rises as tech giant unveils new M5 chip alongside upgraded 14-inch MacBook Pro and iPad Pro
Apple (AAPL) shares climbed 1.4% as the company unveiled new products and tech stocks led a broader advance in US equities.
Yahoo Finance’s Dan Howley reports:
Read the full story here.
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Gold continues to hit record highs
Gold (GC=F) continued to topple record highs, with futures climbing another 1% to trade at over $4,211 an ounce on Wednesday and spot prices trading around $4,163, according to S&P Global Market Intelligence. Silver (SI=F) also rose over 1% to $51 per ounce as investors continue to pile into hard assets.
The run-up in gold and silver has led some market watchers to suggest the precious metals may be overvalued. Though others on Wall Street still see room to run.
As Yahoo Finance’s Jake Conley reports, if just half a percent of US assets held by foreign investors were to be moved into gold, the yellow metal could hit $6,000 per ounce, JPMorgan analysts said.
Weighing in on the recent moves separately, JPMorgan CEO Jamie Dimon said on Tuesday that he understood why gold is attractive right now — though he refrained from commenting on whether the metal may be overbought.
“I’m not a gold buyer — it costs 4% to own it,” Dimon said at Fortune’s Most Powerful Women conference, per Bloomberg. “It could easily go to $5,000, $10,000 in environments like this. This is one of the few times in my life it’s semi-rational to have some in your portfolio.”
Read more here.
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Stocks jump at the open
US stocks climbed on Wednesday at the market open.
The Dow Jones Industrial Average (^DJI) moved up roughly 0.4%, while the S&P 500 (^GSPC) rose about 0.7%. The Nasdaq Composite (^IXIC) added 1%, reversing the prior day’s loss, when the tech-heavy index led stocks down during a rocky session.
The major US indexes are gaining as earnings season kicks off with strong results from Wall Street banks and as investor hopes grow for further interest rate-cuts from the Federal Reserve this year.
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Nvidia stock rises amid HSBC upgrade, latest AI deal
Nvidia (NVDA) shares rose 2% premarket on Wednesday as HSBC (HSBC) analyst Frank Lee upgraded the stock to Buy from Hold.
Lee said he expects the market for Nvidia’s AI chips to keep growing beyond its Big Tech customers — pointing to the Stargate AI projects in the US and abroad and OpenAI’s (OPAI.PVT) recent deal with Nvidia — “leading to continuous earnings growth” for the chipmaker. Lee raised his price target on shares to $320 from $200.
Also boosting Nvidia’s shares was the company’s participation in another multibillion-dollar deal in the AI space. An investor consortium called the Artificial Intelligence Infrastructure Partnership (AIP), which includes the AI chip giant, BlackRock (BLK), Microsoft (MSFT), and Elon Musk’s xAIm said it will acquire 100% of the equity in data center company Aligned Data Centers. The transaction would value Aligned Data Centers at roughly $40 billion.
AIP’s investment is the latest in a tangled web of AI deals involving vendors of AI infrastructure investing in their own customers, and vice versa — a circular dynamic that analysts warn is contributing to a stock market bubble.
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Bitcoin modestly rises as the crypto resets
Bitcoin (BTC-USD) rose 0.5% on Wednesday morning, trading at around $112,009 per token, following a steep 5% loss the day before as US-China tensions reescalated and Fed Chair Powell implied that more rate cuts were possible.
As my colleague Hamza Shaban wrote in today’s Morning Brief newsletter, after the crypto had been set up for a strong October, investors are now resetting their speculative bets.
Read more here.
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Dollar Tree gains after projecting earnings growth through 2028
Dollar Tree’s (DLTR) stock rose 8% before the bell on Wednesday after the retailer announced at its Investor Day that it expects earnings per share to gain as much as 10% annually over the next three years. The company said that despite higher traffic from consumers that can afford to spend more, tariffs still present a problem.
Bloomberg News reports:
Read more here.
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Wall Street boom boosts profits at Bank of America
Bank of America shares popped in premarket trading after the big bank reported a rise in profit, dealmaking and trading that outperformed analysts’ expectations.
Yahoo Finance’s David Hollerith reports:
Read more here.
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Good morning. Here’s what’s happening today.
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Premarket trending tickers: AMD, MP Materials and Tesla
Here’s a look at some of the top stocks trending in premarket trading:
AMD (AMD) stock rose more than 2% in premarket trading on Wednesday. It was announced on Tuesday that Oracle would deploy more than 50,000 of AMD AI chips.
MP Materials Corp. (MP) stock fell 3% before the bell on Wednesday following the prior days trading when it closed 3%. The rare earth company is in focus right now as China impose export restrictions on their rare earths and investors look to alternative firms.
Tesla (TSLA) stock rose 1% in premarket trading on Wednesday. A report this week from Kelly Brook stated that sticker prices for US cars have now reached $50k for the first time.
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‘Absolutely’ a market bubble: Wall Street sounds the alarm on AI-driven boom as investors go all in
Wall Street is growing louder with warnings that the artificial intelligence trade may be overheating, writes Yahoo Finance’s Allie Canal.
She reports:
After months of record gains in AI-linked stocks and corporate spending, concerns are mounting that the boom is starting to look like a bubble.
JPMorgan CEO Jamie Dimon underscored that tone of caution while speaking to reporters on Tuesday, calling elevated asset prices “a category of concern.”
“When asset prices are elevated, you have further to fall,” Dimon said, adding that while “consumers are still spending [and] companies are making money,” valuations and credit spreads remain stretched.
“You have a lot of assets out there which look like they’re entering bubble territory,” he said. “That doesn’t mean you don’t have 20% to go — it’s just one more cause of concern.”
That caution comes as new sentiment data shows investor exuberance reaching extremes.
Bank of America’s latest Global Fund Manager Survey, released Tuesday, cited an “AI equity bubble” as the top global tail risk for the first time in its history. …
Another early warning sign: Correlations across sectors have fallen to their lowest level since the current bull market began. Colas said these “unusually low” readings tend to appear when investor confidence runs “too high” and is a pattern that often precedes short-term pullbacks.
Read more here.
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LVMH stock jumps after surprise return to sales growth
LVMH (MC.PA, LVMUY) unexpectedly reported a return to sales growth in its third quarter earnings, a sign the decline in luxury demand is easing.
Paris-listed shares of the owner of Louis Vuitton and Christian Dior rose as much as 14% — the biggest intraday gain since 2001 — while its US-listed stock jumped around 9% in premarket.
Reuters reports:
Read more here.
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Global AI rush helps ASML post orders beat, but China outlook dims
ASML’s (ASML, ASML.AS) orders topped estimates in the third quarter amid an AI investment boom, and the Dutch maker of chipmaking equipment said it expects to keep benefiting.
Shares rose over 3% in premarket trading even after ASML also warned it expects Chinese demand to drop significantly next year,
Reuters reports:
Read more here.
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Gold notches new record
Gold (GC=F) hit a new record, bolstered by the ongoing US-China trade spat alongside comments from the Fed giving investors hope for a rate cut later in the year.
Bloomberg reports:
Read more here.
