Stock Market Update

The S&P 500 futures currently trade 21 points above fair value.

Asian markets were led sharply higher by Japan on Thursday, with Micron's upbeat outlook providing another catalyst for the region's AI and semiconductor shares. Japan's Nikkei 225 surged 3.4% to a six-week high, while the Topix gained 1.7%, with Lasertec (+11.1%), Advantest (+9.8%), Murata Manufacturing (+8.4%), Taiyo Yuden (+8.3%), and Kioxia (+5.6%) leading the advance. Nidec (-10.8%) bucked the rally after its auditor declined to issue an opinion on the company's long-awaited financial statements. Japanese manufacturing sentiment also improved in the third quarter to its highest level in more than eight years, while broader business conditions reached their strongest levels in decades. China's Shanghai Composite and Hong Kong's Hang Seng Index were closed for the National Day holiday.

• In economic data:
  • Japan's Q3 Tankan Large Manufacturer Index rose to 24 (expected 25; prior 22), while the Large Non-Manufacturers Index fell to 35 (expected 36; prior 37).
  • Japan's September S&P Global Manufacturing PMI fell to 54.1 (expected 54.1; prior 54.9).
  • Australia's September S&P Global Manufacturing PMI fell to 49.6 (expected 49.3; prior 52.0).
  • Australia's August imports increased 5.8% (prior -2.4%), while exports increased 3.7% (prior -3.6%).
  • South Korea's September imports increased 26.0% (expected 21.5%; prior 22.4%), while exports increased 83.5% (expected 61.7%; prior 68.7%).
  • South Korea's September S&P Global Manufacturing PMI rose to 53.9 (prior 52.3).
  • India's September HSBC Manufacturing PMI rose to 55.1 (expected 55.7; prior 52.8).

European markets trade lower, illustrating the broader pressure that remains outside the AI trade as elevated bond yields, rising oil prices, and persistent inflation concerns weigh on equities. Germany's DAX 40 fell earlier to its lowest level since July, with Deutsche Bank, Bayer, Zalando, SAP, Heidelberg Materials, Fresenius, and Deutsche Post each dropping more than 2%, while Infineon Technologies (+1.7%) bucks the weakness. France's CAC 40 hit its lowest level since late March amid concerns over public finances ahead of the government's 2027 budget proposal, with BNP Paribas (-2.6%), Crédit Agricole (-2.7%), and Société Générale (-2.6%) leading financial-sector losses. London's FTSE 100 tumbled to its lowest level since June, with higher bond yields and renewed oil-price strength overshadowing softer-than-expected US PCE inflation data. UK house prices fall 0.2% month-over-month in September, while annual growth slows to 0.8%, its weakest pace of the year. Improved Gulf energy flows offer some relief from supply concerns, but stalled US-Iran negotiations keep oil prices and the broader inflation threat firmly in focus.

• In economic data:
  • The eurozone's September HCOB Manufacturing PMI rose to 52.9 (expected 52.7; prior 52.7).
  • The eurozone's August unemployment rate was unchanged at 6.4% (expected 6.4%; prior 6.4%).
  • Germany's September HCOB Manufacturing PMI fell to 53.9 (expected 53.8; prior 54.3).
  • Spain's September HCOB Manufacturing PMI rose to 51.0 (expected 50.2; prior 49.5).
  • Italy's September HCOB Manufacturing PMI rose to 50.4 (expected 50.1; prior 49.6).
  • Italy's August unemployment rate rose to 6.2% (expected 5.8%; prior 6.0%).
  • France's September HCOB Manufacturing PMI fell to 50.6 (expected 50.3; prior 51.1).
  • The U.K.'s Nationwide HPI fell 0.2% month-over-month (expected 0.0%; prior 0.2%) and increased 0.8% year-over-year (expected 1.3%; prior 1.6%) in September.
  • The U.K.'s September S&P Global Manufacturing PMI rose to 51.9 (expected 52.0; prior 51.7).
  • Switzerland's September CPI was unchanged month-over-month (expected 0.0%; prior 0.4%) and increased 0.8% year-over-year (expected 1.3%; prior 1.6%).
  • Switzerland's August retail sales increased 3.2% year-over-year (expected 2.1%; prior 2.6%).