Pre-market market movements. On Friday, October 16, US stock index futures were mixed ahead of the opening bell. As of the time of writing, Dow futures were up 0.08%, S&P 500 futures were up 0.14%, and Nasdaq futures were down 0.12%.
As of the time of writing, Germany's DAX was up 0.91%, the UK's FTSE 100 was down 0.04%, France's CAC 40 was up 0.26%, and the Euro Stoxx 50 was up 0.62%.
As of the time of writing, WTI crude oil was down 0.04% at $97.93 per barrel. Brent crude was up 0.39% at $106.33 per barrel.
Market News
Waller strikes a positive tone on AI's long-term prospects, and the market keeps its expectation that the Fed will hold steady in October. Federal Reserve Chair Kevin Waller did not dispel market expectations that the central bank will leave interest rates unchanged at its meeting at the end of the month. Waller reaffirmed on Friday that the Fed will achieve price stability and described the September rate hike as removing "a portion of accommodation." Regarding the October monetary policy meeting, he made clear he would not prejudge the Fed's monetary asset path and was unwilling to announce in advance possible actions at the remaining meetings this year, stressing that each Fed decision will be based on output, employment, and inflation rather than a preset policy path, and reiterating his personal preference that the Fed provide no forward guidance at all. At the same time, Waller described AI in his remarks as the most profound economic transformation of his lifetime, while emphasizing that AI's shock to the demand side will arrive before supply-side improvements. Waller's comments reinforced the judgment that frontier AI technology will change the economy over the long term, but offered no commitment to a October rate pause. For global semiconductor stocks, which have suffered sharp selling recently and fallen into correction territory, the positive takeaway is that he did not further strengthen near-term rate hike expectations. Whether US Treasury yields can continue to cool and whether recently battered AI computing-themed stocks and the broader semiconductor and technology-related sectors can launch a counterattack still depends on whether inflation, corporate financing conditions, and AI profit realization can improve simultaneously.
Wall Street braces as Bessent makes another move: the aftermath of August's "Treasury twist" lingers, and the November refunding announcement may be the next flashpoint. As the Treasury prepares to update its debt management plan in November, key clues may emerge on Friday. Traders are closely watching the quarterly financing survey the US Treasury sends to primary dealers on Friday, trying to determine whether Bessent is preparing to reduce long-term US Treasury supply or further expand buybacks in a new round of financing plans to be announced in November. The market's heightened sensitivity is tied to an unexpected Treasury action in August. At that time, Bessent suddenly expanded purchases of old bonds, increasing buybacks of 10-year to 30-year Treasuries beyond the normal quarterly financing arrangement. The move was dubbed by the market as a "Treasury twist operation" and widely interpreted as an attempt to ease pressure from rising long-term yields.
"Don't fight AI!" HSBC says the bond market storm cannot stop stocks from pushing higher, and the AI theme remains constructive. HSBC's global investment research team said in its latest view that investors should not "fight the AI trade." The bank believes that the AI sector has strong earnings momentum, an increasingly clear monetization path, and valuations that are no longer expensive after adjustment, leaving the overall risk-reward ratio still attractive. HSBC strategists pointed out that AI remains one of the hardest trends in the current market to oppose. Monetization signals continue to be positive. At the same time, accelerating demand for AI inference is driving stronger cloud revenue at major hyperscale cloud providers, while GPU rental prices remain firm. This means the AI supply chain is shifting from a "capex story" to a "revenue realization story," easing market concerns about returns on computing power investment. The recent bond selloff has pushed yields higher, which usually pressures high-valuation growth stocks. However, stock market performance shows that the earnings support behind the AI theme is offsetting the impact of rising rates. HSBC believes that as long as AI monetization continues to be validated, corporate IT spending tilts toward AI, and cloud and computing demand remain robust, AI-driven stock market gains still have further potential.
Is a "hidden bear market" in US stocks concealing a major opportunity? Goldman Sachs predicts "three streams of buying" are poised to return. A latest report from well-known Wall Street financial research firm The Kobeissi Letter shows that US benchmark stock indexes remain near highs, but valuations have already entered a "winter." In the firm's view, energy inflation, US Treasury yields, and rate hike expectations have depressed the valuations the market is willing to pay; if these pressures ease and earnings continue to be realized, technology stocks led by the "Magnificent Seven" could see a strong valuation recovery. Goldman Sachs' capital flows team offers another bullish clue: the reopening of corporate buyback windows, year-end retail inflows, and post-election foreign buying could bring incremental demand for stocks that have suffered valuation compression. Both point to the same conclusion: high-quality technology growth assets that can continue to deliver strong earnings are expected to benefit from both capital inflows and valuation repair.
Is a "mega bull market" brewing inside the S&P 500? A hedge fund veteran bets on the "other 493 stocks." AI concept stocks have been under pressure recently, but hedge fund veteran Thomas Hayes believes investors may be overlooking another change taking place in the US stock market: while the S&P 500 is still dominated by a handful of large technology stocks, a broader group of stocks within the index is brewing a strong rally. Hayes, founder and managing member of Great Hill Capital, expects that over the next six months, the "other 493 stocks" in the S&P 500 excluding a few large technology companies could become the main driver of market gains. Hayes' judgment is based on a shift in the AI investment logic: in the past, investors were eager to buy companies supplying chips and computing power for AI infrastructure construction; but as competition intensifies and supply increases, those companies' high margins may be difficult to sustain. By contrast, companies that can use AI to boost productivity and expand margins may be the more noteworthy investment direction for the next phase.
Individual Stock News
Memory chip stocks fell broadly in pre-market trading. On Friday ahead of the US market open, as of the time of writing, SK Hynix (SKHY.US) fell nearly 3%, Micron Technology (MU.US) and SanDisk (SNDK.US) dropped more than 2%, and Western Digital (WDC.US) and Seagate Technology (STX.US) fell more than 1%.
After nearly a decade of delay, Tesla (TSLA.US)'s new-generation Roadster finally debuts: 0 to 100 km/h in 0.81 seconds, capable of flying, with mass production only in 2028. After a delay of nearly ten years, Tesla's second-generation Roadster has finally been unveiled. The second-generation Roadster supercar appeared at a launch event, equipped with a cold gas propulsion system code-named "A71" developed jointly with SpaceX (SPCX.US). In the demonstration, the vehicle could drive up a nearly vertical wall and attach to it, land in the air like a rocket, and perform rollover and jumping maneuvers. From a financial perspective, analysts believe Roadster's direct contribution to Tesla's overall sales is expected to be limited. The car is positioned at the high end with low production volume and will compete with high-performance models from brands such as Porsche, Lamborghini, and Ferrari, but its high margins may make it a meaningful source of profit. As of the time of writing, Tesla rose more than 3% in Friday pre-market trading, while SpaceX rose more than 1%.
Ending a 40-year partnership with PepsiCo (PEP.US), KFC in the US will switch to Coca-Cola (KO.US)! KFC in the US announced a new partnership with Coca-Cola. Starting in January 2027, KFC will move its US beverage partnership to Coca-Cola, and Coca-Cola products are expected to be available in all KFC restaurants across the US by spring 2027. Since Pepsi acquired KFC in 1986, US locations have served Pepsi-owned beverages. KFC US President Catherine Tan-Gillespie said Pepsi remains an important partner for KFC's parent company and its international business. Pepsi said its partnership agreements with Taco Bell and KFC's international business were recently renewed.
Interactive Brokers (IBKR.US) third-quarter revenue rose 16% year over year and announced a quarterly dividend increase of more than 70%. Driven by growth in net interest income and commission income, Interactive Brokers' third-quarter net revenue was $1.914 billion, up 15.6% from $1.655 billion a year earlier; adjusted net revenue excluding special items was $1.872 billion, up 16.3% from $1.610 billion a year earlier. By revenue structure, net interest income remained Interactive Brokers' largest source of revenue. In the third quarter, the company's net interest income was $1.154 billion, up 19% from $967 million a year earlier, mainly driven by increases in customers' average margin loan balances and customer credit balances. On the commission side, Interactive Brokers' third-quarter commission revenue was $602 million, up 12% from $537 million a year earlier. The company said this was mainly due to an 18% year-over-year increase in daily average revenue trades (DARTs) and higher regulatory fees passed through to customers.
Alcoa (AA.US) third-quarter revenue was $3.7 billion, up nearly 24% year over year. Alcoa's third-quarter revenue was $3.704 billion, up 23.7% year over year but down 6.6% from the previous quarter; net income attributable to the company was $483 million, higher than $407 million in the previous quarter; earnings per share were $1.81, higher than $1.53 in the previous quarter. Excluding special items, Alcoa's third-quarter adjusted net income was $485 million, lower than $562 million in the previous quarter; adjusted earnings per share were $1.82, lower than $2.12 in the previous quarter. Adjusted EBITDA was $789 million, down 12.4% quarter over quarter.
Key economic data and event preview
Beijing time 21:15: US September industrial production month-over-month rate.
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