Stock Market Update

The stock market is on track for a modestly higher start this morning on the heels of yesterday's retreat that saw considerable weakness in mega-cap and tech names. 

Micron's (MU 165.60, -0.81, -0.3%) stellar beat and raise earnings report may have at least temporarily restored some confidence in the AI space, though the stock has given back the 5% jump that immediately followed the earnings release. 

All of the "magnificent seven" names are slightly higher in the pre-market, with investors having been quick to buy any dips in recent weeks. 

Headlines are quiet this morning, and the market has only a small slate of earnings reports and economic data to assess.

August New Home Sales data (Briefing.com consensus: 650k) releases at 10:00 a.m. ET, and the MBA Mortgage Applications Index for the week ended September 20 increased 0.6%, from a prior increase of 29.7%. 

With a lack of key macro catalysts in play this morning, the market will largely be left to its own momentum to reverse course back toward record territory. 

In corporate news:

• Alibaba (BABA 177.75, +14.67, +9.0%) trades higher as the company unveils strategic roadmaps for next generation AI innovations. 
• Amazon (AMZN 223.57, +2.86, +1.3%) was upgraded to Overweight from Equal Weight at Wells Fargo, with a target of $280. 
• Lithium Americas (LAC 5.28, _2.21, +72.6%) trades sharply higher as Reuters reports that the Trump administration is seeking an equity stake of up to 10%.
• Micron (MU 165.60, -0.81, -0.3%) beat EPS expectations by $0.17, reported revenues in-line, and guided Q1 EPS above consensus, with revenues above consensus.
• OpenAI is in discussions to lease chips from NVIDIA (NVDA 179.26, +0.83, +0.5%), according to The Information. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: +1.4%, China's Shanghai Composite: +0.8%, India's Sensex: -0.5%, South Korea's Kospi: -0.4%, Australia's ASX All Ordinaries: -0.9%.

In news:

• Alibaba jumped to a four-year high after the company's CEO said that investment in AI infrastructure will be increased and the company will cooperate with NVIDIA to develop physical AI capabilities.
• Japan's manufacturing sector is contracting at an accelerating rate, according to the flash September Manufacturing PMI.
• Australia's Prime Minister Albanese will visit the White House on October 20.
• South Korea's finance minister is expected to meet with Treasury Secretary Bessent in New York.

In economic data:

• Japan's flash September Manufacturing PMI 48.4 (expected 49.5; last 49.7) and flash Services PMI 53.0 (last 53.1). August BoJ Core CPI 2.0% yr/yr (expected 1.9%; last 2.0%)
• South Korea's September Consumer Confidence 110.1 (last 111.4)
• Australia's August Monthly CPI Indicator 3.0% (expected 2.9%; last 2.8%)

Major European indices trade near their flat lines while France's CAC (-0.7%) underperforms with luxury names contributing to the weakness. STOXX Europe 600: -0.3%, Germany's DAX: -0.2%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.7%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: -0.2%.

In news:

• German business sentiment weakened in September and Switzerland's KOF Institute lowered its domestic growth forecast for 2026 to 0.9% from 1.5%.
• Denmark's central bank lowered its 2025 domestic growth forecast to 2.0% from 3.6% while the outlook for 2026 was cut to 2.0% from 2.3%.
• Sweden bucked the trend, as the NIER think thank raised its domestic forecast for 2025 to 0.9% from 0.7% while the outlook for 2026 remained at 2.6%.

In economic data:

• Germany's September ifo Business Climate Index 87.7 (expected 89.3; last 88.9). September Current Assessment 85.7 (expected 86.7; last 86.4) and Business Expectations 89.7 (expected 92.0; last 91.4)
• Spain's August PPI -1.5% yr/yr (last 0.4%)
• Swiss September ZEW Expectations -46.4 (last -53.8)