Good morning. Alphabet had the worst day in its history on Thursday, and most stocks went up anyway. Then Amazon and Intel reported. Amazon is down 7.4% in premarket trading after a $77 billion spending quarter, and Intel is down 24.9% on a weak forecast (CNBC, ~4:05 AM ET). As of ~3:55 AM ET, Nasdaq-100 futures are down 2.1% and S&P 500 futures 1.0%, while Dow futures are about flat (CNBC). Today is the last trading day of October.
📊 THE OVERNIGHT SNAPSHOT
Stocks, VIX and yields are Thursday's close. Futures, oil and gold as of ~3:55 AM ET Friday, vs. Thursday's settle; dollar index ~4:05 AM ET. Crypto as of ~3:55 AM ET vs. its 24-hour open. Nikkei and Kospi are Friday's close; Hang Seng is late in Friday's session, ~3:50 AM ET. Stoxx 600 is Thursday's close.
One-line read: The biggest companies had a bad day and the average stock had a good one; after the close, Amazon and Intel handed the bad day to Friday's futures.
Market | Last | Change |
|---|---|---|
S&P 500 futures | 7,679.00 | ▼ 75.25 pts (−0.97%) |
Nasdaq-100 futures | 28,933.75 | ▼ 628.25 pts (−2.13%) |
Dow futures | 52,483 | ▼ 29 pts (−0.06%) |
S&P 500 | 7,720.39 | ▼ 0.30% (−23.59) |
Nasdaq Composite | 26,184.72 | ▼ 1.38% (−365.13) |
Dow | 52,342.56 | ▼ 0.25% (−132.54) |
Equal-weight S&P 500 | 8,912.96 | ▲ 1.21% (+106.59) |
Russell 2000 | 2,859.22 | ▲ 1.01% (+28.71) |
Chip index (SOX) | 11,518.20 | ▼ 1.42% (−165.80) |
VIX | 17.20 | ▲ 0.29 pts |
US 10Y yield | 4.98% | ▼ 7 bp |
US 2Y yield | 4.61% | ▼ 6 bp |
WTI oil (Dec) | $104.04 | ▲ 2.0% (vs. $102.00 Thu settle) |
Brent oil (Dec) | $117.49 | ▲ 2.3% (vs. $114.88 Thu settle) |
Gold (Dec) | $3,978.20 | ▼ 1.32% (vs. $4,031.40 Thu settle) |
Dollar index (DXY) | 101.71 | ▼ 0.32% |
Bitcoin | $77,945 | ▼ 2.2% |
Ether | $2,230 | ▼ 3.3% |
Nikkei 225 (Fri close) | 63,290.11 | ▼ 2.12% (−1,369.36) |
Kospi (Fri close) | 5,730.74 | ▼ 3.48% (−206.92) |
Hang Seng (Fri, live) | 23,315.39 | ▲ 1.55% (+356.74) |
Stoxx 600 (Thu close) | 649.11 | ▲ 0.77% (+4.97) |
🌙 WHAT HAPPENED WHILE YOU SLEPT
Amazon Spent $77 Billion. Investors Flinched.
Amazon shares fell 7.3% to $225.99 in after-hours trading Thursday after the company's spending on data centers outran the cash its business brings in (CNBC). The cloud unit did its part: AWS revenue rose 39% to $46.0 billion, its fastest growth in nearly five years (Amazon; Reuters). But Amazon spent $77.3 billion on property and equipment in the third quarter, more than double the $35.1 billion of a year earlier and above the $58.7 billion analysts expected (Amazon; FactSet via Reuters). Over the last 12 months, free cash flow was an outflow of $42.4 billion, compared with an inflow of $14.8 billion a year earlier (Amazon). "Operations generated plenty of cash but their capex just absolutely swallowed it," said Dave Wagner of Aptus Capital Advisors (Reuters). Intel had a different problem: it fell 23.0% after hours to $70.87 after forecasting fourth-quarter revenue of $15 billion to $16 billion, below the $17.1 billion analysts expected (Intel; LSEG via CNBC). "We see the PC slowdown continuing at least through the first half of next year," said finance chief David Zinsner (Intel).
The numbers: Amazon's revenue rose 12% to $201.94 billion, a touch below the $202.31 billion expected, and earnings were $1.89 a share against $1.96 (Amazon; LSEG via CNBC). Advertising revenue of $19.64 billion missed the $20.82 billion StreetAccount estimate (CNBC), Amazon's first ad miss in seven quarters (Reuters). Operating income rose to $28.1 billion from $17.4 billion (Amazon). CEO Andy Jassy said 2027 capital spending will be "meaningfully more" than this year's roughly $220 billion and that AWS growth will top 40% in 2027 and 2028 (CNBC). At Intel, third-quarter revenue rose 21% to $16.5 billion, in line with forecasts, and adjusted earnings of 52 cents a share beat the 40 cents expected (Intel; LSEG via CNBC). Data center and AI revenue jumped 78% to $7.3 billion, while the PC unit fell 5% to $8.1 billion (CNBC). Intel said an explosion at its factory in Israel earlier this month, which killed two workers, will cost about $600 million of revenue over two quarters (CNBC). Intel shares were up about 150% this year before the report (CNBC).
Why it matters: Amazon, Alphabet and Microsoft together spent about $168 billion on property and equipment last quarter (company reports; our math). This week, investors rewarded that spending only where cash flow kept up: Microsoft's covered it, while Alphabet's and Amazon's did not. Amazon was worth about $2.63 trillion at Thursday's close (CNBC); a 7.3% drop that lasts through Friday's session would erase about $192 billion of market value (our math). Intel's warning hit a different corner: PC makers HP and Dell fell 7.5% and 6.8% after hours alongside it (CNBC).
What to watch: As of ~3:55 AM ET, Nasdaq-100 futures are down 2.13%, S&P 500 futures 0.97% and Dow futures 0.06% (CNBC). In premarket trading as of ~4:05 AM ET, Amazon is at $225.84, down 7.4%, and Intel at $69.12, down 24.9% (CNBC). In Thursday's session, Alphabet fell 12.6% to $283.82, its worst one-day percentage drop ever (Reuters; CNBC), erasing about $487 billion of market value (CNBC; our math). Communication services fell 6.6%, the sector's biggest drop since February 2022 (Reuters). The S&P 500 fell 0.30% to 7,720.39, its first loss in four sessions, and the Nasdaq 1.38% to 26,184.72 (Reuters; CNBC). The S&P 500 is 1.26% below its Oct. 6 record (FRED; our math). Thursday took the shine off the largest companies; Friday's futures say the polishing isn't finished.
🔑 3 THINGS TO KNOW BEFORE THE OPEN
1. The economy ran hot, and yields fell anyway.
The economy grew at a 3.4% annual rate in the third quarter, up from 2.2% in the second and above the 3.1%–3.2% economists expected (BEA; Dow Jones via CNBC; WSJ survey). PCE inflation, the Fed's preferred gauge, was 3.6% in September from a year earlier, a bit below the 3.7% expected but up from 3.4% in August; core PCE, which leaves out food and energy, was 3.1%, as expected (BEA; WSJ survey). Shoppers ran out of room: spending after inflation was flat in September, income after taxes and inflation fell 0.3%, and the saving rate slipped to 3.8% (BEA). Weekly jobless claims were 194,000, below the 200,000 expected (Labor Department via FRED; WSJ survey). The 10-year Treasury yield fell 7 bp to 4.98%, its lowest close since Oct. 22, and the 2-year fell 6 bp to 4.61%, its lowest since Sep. 10 (US Treasury). Overnight the 10-year is at 4.94% (CNBC, ~4:04 AM ET). Freddie Mac's 30-year mortgage rate eased to 7.24% from 7.32% (Freddie Mac via FRED). Traders still see a more than 77% chance of a Fed rate hike in December (CME FedWatch via CNBC).
Why it matters: The Fed's post-meeting blackout on public comments has lifted, and San Francisco Fed President Mary Daly and St. Louis Fed President Alberto Musalem speak today (Reuters). A Thornburg strategist called Friday the first test of how officials read the data (CNBC).
2. Lagarde is leaving the ECB early.
European Central Bank President Christine Lagarde said she will resign, with her departure set for Feb. 7, 2027, months before her term was due to end in October 2027 (Reuters). "I don't think that I can remain neutral," she said, and she kept a December rate hike on the table (Reuters). The ECB held its deposit rate at 2.50% on Thursday (ECB). The Bank of Japan also held, at 1.25%, in an 8–1 vote, with board member Takata wanting 1.5%, and said inflation is "generally consistent" with its 2% goal for the first time since 2013 (CNBC). former Dutch central bank chief Klaas Knot and former Spanish central bank chief Pablo Hernández de Cos are seen as front-runners to succeed Lagarde (Reuters).
Why it matters: The ECB and the BOJ set rates for two of the largest pools of savings that flow into US bonds and stocks. The dollar index is down 0.32% overnight at 101.71 (CNBC, ~4:05 AM ET).
3. October ends today, with oil and wages on deck.
The Employment Cost Index, a quarterly measure of wages and benefits, arrives at 8:30 AM ET (BLS); economists expect a 0.8% rise, from 0.9% (WSJ survey; BLS). The Chicago PMI follows at 9:45 AM ET (WSJ calendar). Exxon Mobil and Chevron report before the open (Reuters). Apple reports Monday after the close (Apple), and the October jobs report is due Nov. 6 (BLS). Through Thursday, the Nasdaq was on track for a 2.5% October drop, while the S&P 500 was up 0.9% for the month and the Dow 2.8% (CNBC).
Why it matters: The ECI is one of the Fed's favorite wage gauges, and with inflation at 3.6%, a hot reading would add to the case for a December hike.
📈 CHART OF THE DAY
The average stock is having a much better October. The S&P 500 Equal Weight index, which gives each of the 500 companies the same slice, is up 5.7% since Sept. 30. The regular S&P 500, where the biggest companies count most, is up 0.9% (S&P Dow Jones Indices via Yahoo Finance; our math). Thursday showed why: Alphabet fell 12.6% and the S&P 500 slipped 0.3%, but the equal-weight index rose 1.2%, the Russell 2000 small-cap index 1.0%, and rising stocks outnumbered falling ones on the NYSE by 1.95 to 1 (CNBC; Reuters). Since November 2016, the equal-weight index has beaten the S&P 500 by 1.5 percentage points or more on only eight days, and two of them came in the last six sessions: Oct. 22 and Thursday (Yahoo Finance; our math). "A risk-off day like this, with small caps outperforming, is a good sign that thus far the market's interpretation of cracks in the AI story doesn't mean cracks in every corner of the market," said Ross Mayfield of Baird (Reuters).
Source: S&P 500 Equal Weight (^SPXEW) and S&P 500 (^GSPC) daily closes via Yahoo Finance, Sep 30–Oct 29, 2026; Oct 29 closes match CNBC. Price returns. Our math.
⚡ QUICK HITS
Earnings: Caterpillar fell 9.3%, its worst day since March 2020, even after beating forecasts and reporting a record $78.1 billion backlog, because it kept its 2026 growth outlook at the mid-to-high teens, below the roughly 18% investors expected (Reuters; CNBC). Eli Lilly rose 6.6% after third-quarter revenue of $24.40 billion beat the $22.61 billion expected and it raised its 2026 revenue forecast to $91 billion–$92 billion from $85 billion–$87 billion; Mounjaro sales grew 65% to $10.72 billion (CNBC). Merck gained 3.8% (CNBC).
Software: ServiceNow fell 27.0%, its worst day on record, and Fortinet 20.1%, a day after both reported (CNBC; Reuters). Marvell fell 13.2% on reports it is in talks to acquire Lumentum (Reuters).
Chips after hours: AMD fell 6.8%, Micron 3.4%, Broadcom 2.9% and Nvidia 1.6% after Intel's forecast (CNBC, quotes ~7:59 PM ET). In premarket trading as of ~4:05 AM ET, Dell is down 9.5%, AMD 7.0%, HP 6.8% and Nvidia 2.5% (CNBC). In the regular session, the chip index fell 1.42%, ending a four-day winning streak (Reuters; CNBC).
Oil: WTI is up 2.0% at $104.04 overnight (CNBC, ~3:55 AM ET) after Yemen's Houthis said they attacked several sites in Saudi Arabia, including its largest refinery at Ras Tanura (Reuters). Brent is on course for a nearly 14% October gain and WTI for 15%, which would be its first monthly close above $100 since April (Reuters).
Asia: Seoul's Kospi closed down 3.5% and Japan's Nikkei 2.1% on Friday, while Hong Kong's Hang Seng was up 1.6% late in its session (CNBC). Chip-related stocks took the hit: SK Hynix closed down 7.1%, SoftBank 6.0% and Advantest 5.9% (Yahoo Finance; CNBC).
Europe: The Stoxx 600 rose 0.77% Thursday to a seven-week high, and Germany's DAX gained 1.3% (Reuters; Yahoo Finance). Euro zone third-quarter GDP and German October inflation are due today (Reuters). BP's third-quarter profit nearly quadrupled to $8.5 billion, above the $6.19 billion analysts expected (LSEG via CNBC).
Crypto: Binance said about $6.3 billion of crypto was affected in a suspected hack, froze about $3 billion and said it will cover customer losses (CNBC). Bitcoin is near $77,945 as of ~3:55 AM ET, down 2.2% from its 24-hour open, and Ether near $2,230, down 3.3% (Coinbase). Coinbase shares fell 4.7% after hours and Strategy 5.8% (CNBC).
Wildcard: SanDisk beat forecasts and announced an 8-for-1 stock split, then fell 3.8% after hours (CNBC). Cutting a pizza into eight slices does not make more pizza.
🧠 EXPLAIN LIKE I'M BUSY
What is the Employment Cost Index, and why does the Fed watch it?
The Employment Cost Index, or ECI, is a quarterly government survey of what employers pay for an hour of work, including wages and benefits such as health insurance (BLS). It uses a fixed mix of jobs, so a hiring wave in high-paid or low-paid industries does not skew it the way a simple average paycheck can (BLS). In the second quarter, total compensation rose 0.9%, and 3.4% from a year earlier (BLS). Pay is the largest cost for many service businesses, and when it rises faster than workers' output, companies often pass it on in prices. That is why the Fed uses the ECI to gauge the labor market (BLS). Put Thursday's numbers next to it: prices rose 3.6% over the past year, while pay rose 3.4% through June (BEA; BLS). Today's report shows whether paychecks caught up over the summer.
🗓️ TODAY'S CATALYSTS (ALL TIMES ET)
Day | Event | Why it matters |
|---|---|---|
Fri Oct 30 | Employment Cost Index (Q3), 8:30 AM (BLS); Chicago PMI, 9:45 AM (WSJ calendar) | Wage growth, a key Fed input. |
Fri | Exxon Mobil and Chevron before the open (Reuters) | Oil above $100 meets the two largest US oil companies. |
Fri | Fed's Daly and Musalem speak (Reuters); euro zone Q3 GDP and German October inflation (Reuters) | First Fed comments since the decision. |
Fri | Last trading day of October | Nasdaq on track for a 2.5% monthly drop (CNBC). |
Mon Nov 2 | Apple after the close (Apple) | The last of the largest tech companies to report. |
Tue Nov 3 | US midterm elections (Reuters) | Policy backdrop for markets. |
Fri Nov 6 | October jobs report, 8:30 AM (BLS) | Next big read on the labor market. |
Wed Nov 11 | Veterans Day: bond market closed (SIFMA); stock market open (NYSE) | No Treasury trading that day. |
Thu Nov 26 | Thanksgiving: stock and bond markets closed (NYSE; SIFMA) | Stocks close early at 1 PM and bonds at 2 PM on Fri Nov 27. |
No market holidays today: NYSE and SIFMA are both on normal hours.
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That's the desk. See you Monday at 6 AM ET.
— The Overnight Desk Team
Note: The Overnight Desk Team may hold positions in assets discussed. Nothing here is investment advice. · Sponsor: No one paid for any mention in this issue.
