Yesterday, investors initially clung to the strong figures posted by Nvidia, yet the momentum faltered. Equities markets remain immersed in uncertainty and risk assets have taken another sharp hit, particularly technology stocks tied to artificial intelligence and cryptocurrencies. 

For the first time in many months, the market spotlight felt almost uncomfortably bright for Nvidia. Investors had pinned high expectations on the company to keep powering the AI-driven enthusiasm running through the markets. To its credit, it delivered, posting blistering growth, hefty profits and confident guidance. Shares initially jumped 5% at the open, giving Wall Street a brief lift. Yet the mood soon faded. Something in New York's recent trading sessions suggests that even strong results are no longer enough to stir investors' spirits for long.

Part of today's anxiety stems from valuations that have floated far above the sturdy ground of cash flow. Some firms are thriving on real demand, others appear to be thriving mainly on each other's demand, a circular pattern of AI spending that looks suspiciously like an industry buying its own merchandise. It is not quite a bubble, but the shape is familiar enough that even the boldest traders have begun squinting at it.

However, I believe that today's skittishness is less a repudiation of AI than a reminder that investors prefer revolutions delivered at a manageable speed. The underlying technologies continue to advance: the challenge is ensuring the economics keep pace with the engineering. If anything, the current correction is a sign of maturation, not collapse. For all the breathless forecasts of trillion-dollar transformations, the real economy still responds to interest rates, productivity, and consumer behavior - which is healthy.

The broader backdrop is equally instructive. Inflation has cooled from its peak, yet many households feel little relief. Prices remain stubbornly high compared with the pre-pandemic era, making the middle class less forgiving of macroeconomic nuance. Policymakers may debate basis points and bond yields, shoppers care more about ground beef and car repairs.

Currency traders edged the dollar lower as they digested America’s delayed September payrolls report, which showed a rise in unemployment, driven more by supply than collapsing demand. This briefly softened the greenback by nudging markets toward the idea of imminent rate cuts. Treasury yields dipped in tandem. The odds of a rate cut by Federal Reserve at the December meeting have edged up slightly from 30% to 35%, but the position remains one of minority expectation.

Energy markets added another twist. Oil prices extended losses after Ukraine signalled willingness to engage on an American-drafted peace plan. With sanctions on Russian producers shifting and the risk premium fading, traders fretted about oversupply. Gold and industrial metals also drifted lower as investors struggled to read the Fed’s next move.

In corporate news, Paramount, Comcast and Netflix submitted nonbinding bids for Warner Bros. Discovery, with the seller aiming to conclude the process by year-end. CK Hutchison is preparing a dual listing of AS Watson Group in Hong Kong and the U.K., targeting up to $2 billion in the first half of next year.  Citigroup appointed Gonzalo Luchetti as its next CFO, effective March, as part of a wider restructuring of its personal-banking division. 

On the macro front today, we have a salvo of activity PMIs around the world. This statistic is highly regarded for its forward-looking character in each country. Its importance is heightened in the U.S., where official data are currently scarce. 

In the Asia-Pacific region this morning, red dominated late in the day: Tokyo was down more than 2.4%, Seoul about 3.8%, Taiwan 3.6%. In mainland China, Hong Kong and Australia, losses hovered around 1.5%. India once again stood out, limiting its decline to 0.4%. Leading European indicators are in the red, with the Stoxx Europe 600 down 0.3%. Futures on Wall Street are up by 0.3 to 0.4%.

Today's economic highlights:

On the agenda today: Japan's PMIs, followed by those of France, Germany, the Eurozone, and the United Kingdom; In the United States, the PMIs and the University of Michigan's consumer sentiment index will also be released. See the full calendar here.

  • Dollar index: 100,201
  • Gold: $4,035
  • Crude Oil (BRENT): $62.68 (WTI) $57.52
  • United States 10 years: 4.06%
  • BITCOIN: $82,690

In corporate news:

  • Amazon and data analytics firm NIQ partnered to measure the impact of cross-platform advertising in Italy, focusing on insights across traditional TV, digital, and streaming environments.
  • Microsoft-backed OpenAI will collaborate with Emirates Group to integrate AI tools like ChatGPT Enterprise across its operations.
  • OpenAI and Foxconn are teaming up to design and manufacture next-gen AI hardware, aiming to enhance the AI supply chain and build U.S.-based infrastructure.
  • Foxconn announced a $1.4 billion investment to build Taiwan's largest supercomputing center using Nvidia's latest AI chips, with completion expected in H1 2026.
  • Foxconn is working with Nvidia to deploy AI technologies in manufacturing lines and expand its capacity to produce 1,000 AI racks per week.
  • Alphabet's Google resolved a data privacy probe in Italy by agreeing to clearer user consent policies regarding cross-use of personal data.
  • Paramount, Comcast, and Netflix submitted bids to acquire Warner Bros. Discovery, with Paramount seeking full acquisition including cable networks.
  • Blackstone sold a majority stake in filtration firm Desotec to EQT, which plans to expand the company's footprint in North America.
  • Citigroup named Gonzalo Luchetti as CFO and folded its U.S. retail banking into the wealth management unit in a major reorganization.
  • GE HealthCare will acquire medical imaging firm Intelerad for $2.3 billion to strengthen its outpatient and ambulatory care offerings.
  • Intuit reported higher sales driven by AI demand among midsize businesses automating financial processes with QuickBooks.
  • Gap raised its fiscal-year outlook after posting a $236 million profit amid growing demand across income brackets.
  • Ross Stores lifted its annual forecast as same-store sales surged 7%, outperforming analyst expectations.
  • Elliott Management has taken a stake in Barrick Gold and is pressuring the company to consider splitting its operations.
  • Salesforce is investigating a data exposure incident linked to third-party apps, though it claims no platform vulnerabilities were involved.
  • Joby Aviation sued rival Archer Aviation for allegedly stealing trade secrets via a former employee.
  • U.S. DOJ charged four individuals for illegally exporting Nvidia chips to China, prompting renewed calls for chip tracking legislation.
  • Australia will include Amazon's Twitch in its upcoming teen social media ban, but excluded Pinterest from the list.

Analyst Recommendations:

  • Aecom: Baird downgrades to neutral from outperform with a target price of USD 143.
  • Bath & Body Works, Inc.: Morgan Stanley downgrades to market weight from overweight and reduces the target price from USD 43 to USD 18.
  • Block, Inc.: Compass Point Research & Trading upgrades to neutral from sell with a price target raised from USD 65 to USD 73.
  • Doximity, Inc.: Raymond James upgrades to strong buy from outperform and reduces the target price from USD 75 to USD 65.
  • Exact Sciences Corporation: Barclays downgrades to market weight from overweight and raises the target price from USD 77 to USD 105.
  • Hologic, Inc.: BNP Paribas downgrades to neutral from outperform with a price target raised from USD 75 to USD 79.
  • Jacobs Solutions Inc.: Baird downgrades to neutral from outperform and reduces the target price from USD 161 to USD 146.
  • Palo Alto Networks, Inc.: HSBC downgrades to reduce from hold with a target price of USD 157.
  • Willscot Holdings Corporation: Baird upgrades to outperform from neutral with a price target raised from USD 20 to USD 22.
  • Biogen Inc.: Piper Sandler & Co maintains its neutral recommendation and raises the target price from USD 118 to USD 157.
  • Dycom Industries, Inc.: KeyBanc Capital Markets maintains its overweight recommendation and raises the target price from USD 320 to USD 392.
  • Moderna, Inc.: Brookline Capital maintains its buy recommendation and reduces the target price from USD 178 to USD 135.
  • Netflix, Inc.: Bernstein maintains its outperform recommendation and reduces the target price from USD 1390 to USD 139.
  • Welltower Inc.: Baird maintains its neutral recommendation and raises the target price from USD 167 to USD 206.