US markets head into another busy week of earnings but the ongoing government shutdown, if unresolved, will become the longest in history by Thursday.
Tech and AI remain central themes. Nasdaq outperformed gold in October, rising 4.15% versus a 3.7% gain for gold. Nvidia, Google, and Tesla led the pack of mega-cap tech stocks, while Microsoft, Meta, Apple, and Amazon trailed slightly. “October gave us valuable information about the tech sector, which has been driving the rally in US stocks since April,” said Kathleen Brooks, research director at XTB.
Brooks noted Nvidia’s market capitalization hit a record $5 trillion last week, “which almost guarantees strong revenues at the GPU maker for the foreseeable future.”
Investors are scrutinizing AI spending more closely. “Meta’s 12% price decline last week is a sign that investors are taking a more nuanced approach to the hyperscalers, and are scrutinizing spending plans more closely than they have in recent memory,” Brooks noted.
This week’s earnings spotlight includes Palantir Technologies Inc (NYSE:PLTR), Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD), Shopify Inc (TSX:SH., NYSE:SHOP), Uber Technologies Inc (NYSE:UBER, ETR:UT8), Amgen Inc (NASDAQ:AMGN, ETR:AMG), Pfizer Inc (NYSE:PFE, ETR:PFE), McDonald's Corp (NYSE:MCD, ETR:MDO)), Qualcomm Inc (NASDAQ:QCOM, ETR:QCI), and Airbnb Inc (NASDAQ:ABNB, ETR:6Z1).
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said, “In tech, Palantir and AMD, which recently announced deals with Nvidia, and Qualcomm, which plans to enter the AI-chip market, will head to the earnings confessionals. McDonald’s and Shopify will help investors gauge US consumer dynamics as concerns rise over consumer health amid perceived weakness in the jobs market and early cracks in housing.”
Economic data remains thin due to the shutdown, likely delaying October Nonfarm Payrolls for a second month. Analysts expect focus to shift to private-sector indicators and Fed commentary. Deutsche Bank noted that Fed Chair Jerome Powell’s press conference last week was “meaningfully more hawkish than we anticipated,” signaling that a December rate cut is “far from…a foregone conclusion.”
Analysts said investor attention will also be drawn to a series of Fed speakers this week. “We will be vigilant about any openness from this group to a skip in December,” Deutsche Bank said, highlighting potential market-moving comments from officials including Vice Chair Bowman and New York Fed President Williams.
Commodities are also in focus. Oil prices climbed after OPEC+ paused production hikes, while gold recovered above $4,000 per ounce.
Political developments could also influence markets. New York City voters head to the polls Tuesday in the mayoral race, while Washington remains gridlocked over the government shutdown. “Once the government is re-opened, market participants will be dealing with a tsunami of economic data,” Deutsche Bank said, warning that the recent low-volatility period in bonds may be ending.