Pre-market market moves.

On Tuesday, October 13, U.S. stock index futures were mixed ahead of the opening bell. As of the latest reading, Dow futures were up 0.39%, S&P 500 futures were down 0.08%, and Nasdaq futures were down 0.70%.

As of the latest reading, Germany's DAX was up 0.23%, the UK's FTSE 100 was up 0.64%, France's CAC 40 was up 0.11%, and the Euro Stoxx 50 was down 0.14%.

As of the latest reading, WTI crude oil was down 1.95% at $91.91 per barrel. Brent crude was down 1.74% at $104.79 per barrel.

Market news

The chip stock selloff continues, while bank earnings season begins. A sharp drop in memory chip shares has pushed concerns about the sustainability of the AI narrative to the forefront. From Seoul to Taipei to Philadelphia, the semiconductor sector came under broad pressure, with the Kospi plunging more than 5% on Tuesday and the Philadelphia Semiconductor Index down more than 7% from its high this month. The core of this selloff is not on the demand side, but rather a sudden shift in the competitive landscape on the supply side and tightening capital chains. At the same time, as the latest Wall Street earnings reports roll in, large U.S. bank stocks are entering correction territory. The KBW Bank Index has fallen about 12% from its August high, exceeding the 10% technical correction threshold.

Fed's Waller: Surging Treasury yields help curb demand, AI investment becomes an inflation driver.

Federal Reserve Governor Christopher Waller said the sharp rise in long-term U.S. Treasury yields is helping restrain demand in rate-sensitive sectors such as housing and autos, thereby providing a degree of monetary tightening. Speaking Tuesday at an economic forum in New Delhi, Waller said: "Does the rise in yields have an impact on rate-sensitive sectors like housing and autos? Of course it does." He noted that while this was not the Fed's intention, the rise in yields has indeed "played a role." Waller also said AI is pushing prices higher, as the rapid buildout of AI infrastructure stimulates demand. Waller is among many Fed officials who hope AI will eventually boost productivity. If AI can raise productivity, the economy could achieve stronger growth without triggering excessive inflation. But he said those returns may still be years away, while AI-driven price pressures could persist for two to three years.

Buying opportunity after the yield surge? Goldman Sachs, Morgan Stanley and other Wall Street banks are bullish on a Treasury rebound.

After weeks of selling pushed U.S. Treasury yields to multi-year highs, Wall Street strategists are beginning to reassess the investment value of Treasuries. Institutions including Goldman Sachs, Morgan Stanley and Citigroup believe that as Treasury yields have climbed sharply, bond valuations are becoming more attractive. However, major institutions still differ notably on the Fed's future rate path and the timing of a Treasury rebound. Goldman Sachs believes that signs of stress emerging in credit markets, along with improved investor positioning and market technicals, could create conditions for a Treasury rebound. Citigroup favors shorter-dated Treasuries, with its strategists saying that as inflation cools and wage growth weakens, the Fed is unlikely to raise rates to 2023 highs. Morgan Stanley also believes Treasury yields are now attractive, but advises investors to wait until after the Fed's meeting this month and the U.S. midterm elections before considering entry.

Is the Fed's rate-cut signal hidden in Walmart's stock price? This indicator is once again flashing a recession warning.

Analysis by Jim Paulsen, former chief investment strategist at Leuthold Group, shows that Walmart's stock underperformed from May to August 2026, but since August, Walmart shares have outperformed the S&P Global Luxury Index by about 21%, and Walmart shares have risen about 8% from their late-August low. Paulsen believes this shift in relative performance suggests consumers may once again be tightening their budgets, meaning the U.S. economy is losing momentum, and future economic weakness could force the Fed to pivot back toward easing. But if rising energy prices continue to push overall inflation higher, or if corporate investment and consumer demand remain strong, policymakers may continue to maintain a hawkish stance. In addition, the historical performance of this indicator has also drawn market attention. According to Paulsen's analysis, the "Walmart recession signal" rose markedly before each of the past four recessions, and since 1990, similar changes have appeared before every Fed easing cycle began.

Goldman Sachs and JPMorgan hit the brakes on AI infrastructure financing: only willing to take $1.3 billion of a $5 billion AI loan, and unwilling to fully underwrite even at 11% high yield.

JPMorgan and Goldman Sachs took a rare step to limit their risk exposure on the sale of a $5 billion loan for AI startup Volta Infrastructure Holdings Ltd., because investors are demanding higher yields for risky debt tied to the AI boom. The two banks are leading the loan issuance for Volta, a newly established AI cloud company. According to people familiar with the matter, the two banks underwrote a $1.3 billion term loan for Volta, while a $3.7 billion chip loan was not underwritten by the two banks — a move aimed at protecting themselves from potential risks. Volta's debt is being marketed to investors at a yield of about 11%, one of the highest borrowing costs in the leveraged loan market, which has become a popular channel for AI financing.

ETF buying can't hold the market up! Bank of America analysts predict gold prices won't hold above $4,000 over the next three months?

A precious metals research report recently released by Wall Street financial giant Bank of America shows that the institution tends to put gold's $4,000 threshold over the next three months under multiple selloff pressure tests — namely weak physical spot gold demand, gold ETF buying struggling to support the market on its own, and even some global central banks potentially restarting gold sales. The institution's analysts expect gold will find it difficult to continue oscillating above the key $4,000 level over the next three months or so as it does now. Bank of America said that for gold to find a bottom and resume its long-term uptrend, the market needs clearer guidance from the Fed. Although a dovish shift in Fed monetary policy would become a more important driver for gold, if market concerns about currency dilution heat up again, gold could also regain upward momentum.

Individual stock news

JPMorgan (JPM.US) Q3 revenue and EPS missed expectations, with a decline in fixed-income trading dragging on results. The earnings report showed that JPMorgan's Q3 revenue was $50.907 billion, up 8% year over year but below market expectations; adjusted earnings per share were $5.75, also below market expectations. Net income was $15.305 billion, up 6% year over year. Net interest income was $27.1 billion, up 13% year over year. The earnings miss was mainly dragged down by lower fixed-income trading revenue and higher costs. Market business revenue for the quarter was $10.3 billion, up 15% year over year. Among that, equity trading revenue was $4.954 billion, up 49% year over year; fixed-income trading revenue was $5.366 billion, down 4% year over year and clearly below market expectations of about $6 billion. CEO Jamie Dimon said all business lines performed well, and that "huge fiscal deficits, sticky inflation, elevated asset prices, rising rates and geopolitical conditions" are still evolving. These forces are "perhaps manageable," but the company is "prepared for a wide range of outcomes." As of the latest reading, JPMorgan was up nearly 1% in Tuesday pre-market trading, after earlier falling more than 3%.

Regulatory relief fails to deliver strong revenue generation, Wells Fargo (WFC.US) Q3 revenue missed expectations. The earnings report showed that Wells Fargo's Q3 revenue rose 2% year over year to $21.87 billion, but was below market expectations of about $22.32 billion; GAAP earnings per share were $1.87, up 13% year over year and slightly above market expectations. Q3 net interest income rose 5% to $12.52 billion, helped by higher loan and investment securities balances, repricing of fixed-rate assets as rates fell, and expansion of the market business balance sheet, partly offset by lower yields on floating-rate assets and higher costs on interest-bearing commercial deposits. Credit loss provisions for the quarter were $1.029 billion, far above $681 million a year earlier, mainly reflecting higher reserves tied to increased commercial and industrial loans and auto loan balances, while commercial real estate reserves declined somewhat. After the Fed removed a years-long regulatory cap on the bank's assets, the bank has been able to deploy more of its balance sheet, giving it more room to compete for loans. Wells Fargo relies on credit cards and auto loans to expand its consumer lending business. As of the latest reading, Wells Fargo was down more than 1% in Tuesday pre-market trading.

UnitedHealth (UNH.US) Q3 results beat expectations: a lower medical loss ratio boosted profit, and the company again raised its full-year earnings guidance. The earnings report showed that UnitedHealth's Q3 revenue fell 0.4% year over year to $112.694 billion, still above market expectations of about $111 billion; adjusted earnings per share rose 61% year over year to $4.69, beating market expectations. Cost control was the main driver of results. The medical loss ratio for the quarter was 88.4%, better than analysts' estimate of 89.9% and 89.90% a year earlier, which the company attributed to insurance product design adjustments and new pricing. On guidance, the company raised its full-year 2026 adjusted earnings per share guidance to at least $20.50, from $19.50-$20.00, and raised its GAAP diluted earnings per share guidance to at least $19.50. This was the company's third upward revision to full-year guidance this year. According to LSEG data, analysts had previously expected full-year 2026 adjusted earnings per share of $19.86, meaning the low end of the new guidance is already above consensus. As of the latest reading, UnitedHealth was up more than 1% in Tuesday pre-market trading.

Johnson & Johnson (JNJ.US) Q3 profit beat expectations and the company raised full-year guidance! Innovative medicine business gained momentum, while the medtech business still needs improvement. The earnings report showed that Johnson & Johnson's Q3 sales rose 5.9% year over year to $25.4 billion, in line with the broader market consensus. GAAP net income plunged 95.9% year over year to $210 million, with diluted earnings per share of just $0.09, compared with $2.12 a year earlier, mainly due to a one-time pre-tax charge of $5.519 billion related to a proposed talc litigation settlement. Adjusted net income was $6.339 billion; adjusted earnings per share were $2.59, above the consensus estimate of about $2.53, but still down 7.5% year over year from $2.80 a year earlier. Innovative medicine revenue rose 7.7% year over year to $16.757 billion, with new drug sales a highlight; the medical devices business was notably weaker, with revenue up 2.5% year over year to $8.642 billion, while overseas performance was roughly flat. On guidance, Johnson & Johnson raised the midpoint of its full-year 2026 reported sales guidance to about $101.2 billion from about $101.1 billion, with a range of $101.0 billion to $101.4 billion, and raised the midpoint of adjusted earnings per share guidance to $11.10 from $11.04, with a range of $11.05 to $11.15, both above the broader market consensus. As of the latest reading, Johnson & Johnson was down more than 2% in Tuesday pre-market trading, with the weak medtech business performance likely the main reason for the cold market reaction.

Apple (AAPL.US) will hold a smart home new product launch on Tuesday. Apple will hold a "Welcome Home" event on local time October 13, focusing on its smart home product line. According to the latest report from well-known journalist Mark Gurman, in addition to the highly anticipated smart home hub HomeView, the new Apple TV 4K and new HomePod mini will also be unveiled at the event. The latter two products are expected to go on sale on October 30, while HomeView is expected to launch in mid-November. Although many industry participants expect that some upgrades to Apple TV and HomePod are just modest performance improvements, chip iterations will actually bring unprecedented new capabilities to Apple's smart home product line. These devices are expected to have stronger connectivity and further integrate Siri's artificial intelligence functions.

Important economic data and event preview

At 04:00 Beijing time the next day, 2028 FOMC voter and Boston Fed President Collins will speak.

Earnings preview

Wednesday pre-market: ASML (ASML.US), Bank of America (BAC.US), Morgan Stanley (MS.US), BlackRock (BLK.US)