Author: Fiona Craig

U.S. stock futures were subdued on Thursday as investors navigated a flood of global developments — from the Federal Reserve’s latest rate cut to a high-profile meeting between Donald Trump and Xi Jinping, and a series of major tech earnings that underscored the industry’s multibillion-dollar push into artificial intelligence.

Futures drift amid global news flow

By 03:43 ET, Dow futures slipped 26 points (0.1%), S&P 500 futures were flat, and Nasdaq 100 futures edged down 12 points (0.1%).
The mixed tone followed a choppy Wall Street session on Wednesday, where the Dow Jones Industrial Average closed 0.2% lower, the S&P 500 was unchanged, and the Nasdaq Composite rose 0.6%, supported by Nvidia’s (NASDAQ:NVDA) record-breaking rally that pushed its valuation to $5 trillion — the first company to reach that milestone.

Investors also parsed a fresh batch of corporate earnings, including a strong performance from Caterpillar (NYSE:CAT), whose shares jumped 11.6% after reporting results that beat expectations.

Fed cuts rates, signals caution ahead

As expected, the Federal Reserve lowered interest rates by 25 basis points to a range of 3.75%–4.00% on Wednesday, marking its third reduction this year. The move came amid limited economic data due to the ongoing federal government shutdown, leaving the policy outlook uncertain.

The decision revealed divisions among policymakers. Fed Governor Stephen Miran, appointed by President Trump, advocated a larger 50-basis-point cut, while Kansas City Fed President Jeffery Schmid voted to keep rates unchanged.

At his press conference, Fed Chair Jerome Powell warned that another rate cut was “far from” certain at the December meeting. Following his remarks, traders trimmed expectations for another cut to 71%, down from 90% earlier.

Powell also confirmed the end of quantitative tightening, saying the Fed would stop reducing its holdings of Treasuries and mortgage-backed securities due to signs of strain in short-term funding markets.

Elsewhere, the Bank of Japan kept its policy settings unchanged but maintained that it would continue raising rates if economic conditions align with its forecasts. The European Central Bank is also expected to hold rates steady, supported by easing inflation and steady growth, even as uncertainty over U.S. trade policy persists.

Trump and Xi hold rare in-person talks

Trade policy was back in focus as Donald Trump and Xi Jinping met in Busan, South Korea, for their first face-to-face meeting in six years. Trump called the conversation “amazing”, adding that the U.S. would lower tariffs on Chinese goods immediately.

In exchange, Beijing agreed to crack down on fentanyl chemical exports and to pause restrictions on rare earth minerals — a key sector for electric vehicles and semiconductors. Trump said China would also begin buying “tremendous amounts” of U.S. *soybeans and other agricultural products “starting immediately.”

The Chinese Commerce Ministry later confirmed that the pause on rare earth controls would last one year and that both sides had reached a consensus on fentanyl cooperation and agriculture trade.

Trump clarified that Nvidia’s Blackwell AI chip was not discussed, despite earlier speculation. He noted instead that the company’s future in China, a $50 billion market, would depend on its own business decisions.

Following the 90-minute meeting, markets were quiet. Analysts at Vital Knowledge commented that “the deliverables don’t really alter the status quo” in U.S.-China trade relations.

Big Tech results dominate investor focus

Earnings from Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOG), and Microsoft (NASDAQ:MSFT) were among the key market drivers overnight, with investors looking ahead to Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) results later in the day.

Meta shares plunged over 7% after-hours after the company said it would “aggressively” ramp up spending on artificial intelligence capable of surpassing human intelligence. The news raised concerns about the scale and returns of its massive AI investments. The company also reported a miss on net income due to a tax charge tied to Trump’s budget bill, even as revenue hit a new record.

Alphabet reported record-high revenue and a 33% surge in net profit to $35 billion, driven by strength in cloud computing and digital advertising. The company’s shares rose 7% after-hours.

Microsoft also benefited from strong demand for cloud and AI services, announcing plans to double its data center capacity within two years. However, it warned that AI spending this year would exceed previous expectations, pushing shares 2% lower after-hours.

The flood of AI-related investments has sparked renewed debate among analysts about a possible tech valuation bubble, reminiscent of the dot-com era.

OpenAI reportedly planning $1 trillion IPO

According to Reuters, OpenAI is preparing for a 2027 initial public offering that could value the company at up to $1 trillion, making it potentially the largest IPO in history.

The company aims to raise at least $60 billion from the listing, with an official filing expected in the second half of 2026. The offering would provide CEO Sam Altman with significant capital to advance his long-term AI ambitions.

Known for its ChatGPT platform, OpenAI is investing hundreds of billions of dollars in AI chips and infrastructure to pursue artificial general intelligence — systems comparable to human cognition. Earlier this week, the company also reached an agreement with Microsoft, its top investor, enabling it to transition to a for-profit structure.

European stocks moved in different directions on Thursday as investors assessed a fresh wave of corporate earnings, easing trade tensions between major economies, regional economic data, and an upcoming policy decision from the European Central Bank (ECB).

By 08:05 GMT, Germany’s DAX was up 0.1%, while France’s CAC 40 fell 0.5%, and the UK’s FTSE 100 also slipped 0.5%.

Trade optimism tempered by caution

Markets reacted to the outcome of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping earlier in South Korea. Trump hailed the discussion as “amazing”, announcing a one-year deal on rare earths and critical minerals and a cut in fentanyl-related tariffs to 10%.

However, the lack of concrete details and Trump’s inconsistent messaging on China led investors to remain cautious about how durable the progress might be.

Central banks in focus: Fed cuts, ECB expected to pause

The U.S. Federal Reserve on Wednesday lowered interest rates by 25 basis points to a range of 3.75%–4.00%, marking its third cut of 2025. Chair Jerome Powell signaled a pause ahead, saying another reduction was “far from a foregone conclusion.”

Attention now shifts to Europe, where the ECB is expected to hold rates steady at 2%, following comments from President Christine Lagarde that the bank was “in a good place.”

Investors are also awaiting German inflation data and eurozone GDP figures, which are likely to confirm sluggish third-quarter growth.

Corporate updates: energy, autos, and banks

Earnings remained in focus, with several major European companies reporting results:

• Shell (LSE:SHEL) posted a Q3 profit of $5.3 billion, up from $3.6 billion in the previous quarter, driven by stronger trading, higher volumes, and favorable tax effects.
• Volkswagen (TG:VOW3) reported a €1.3 billion operating loss, weighed down by U.S. tariffs and restructuring costs at Porsche.
• Société Générale (EU:GLE) beat earnings forecasts thanks to cost savings and steady revenue growth, though it held off announcing a new buyback.
• Stellantis (BIT:STLAM) saw revenues rise 13% year-on-year, ending a seven-quarter decline.
• Puma (TG:PUM) said it will cut 13% of its global workforce (900 jobs) by 2026 amid weak sales.
• Carlsberg (LSE:0AI3) reported slightly weaker Q3 sales but reaffirmed its full-year guidance, citing a challenging consumer environment.

Investors are also monitoring Big Tech earnings in the U.S., with Alphabet, Meta, and Microsoft reporting later in the day.

Oil prices remain under pressure

Crude prices slipped despite improved trade sentiment. Brent crude fell 0.9% to $63.76 per barrel, while WTI dropped 0.9% to $59.93. Both benchmarks are set for monthly losses of over 3%, extending their decline for a third consecutive month.

Attention now turns to the OPEC+ meeting on November 2, where the alliance is expected to confirm a 137,000-barrel-per-day supply increase for December.

Essentra Plc (LSE:ESNT) released a mixed third-quarter trading update on Thursday, reporting solid sales growth that was tempered by margin pressure due to regional performance differences.

The company achieved organic constant-currency sales growth of 5.9% year-over-year in Q3 2025 — a strong rebound from the 1.1% decline recorded in the first half. Order intake rose 5.6% versus the same period last year, with activity in September rebounding to second-quarter levels following seasonally weaker months in July and August.

However, gross margins were described as “slightly weaker” than anticipated, primarily reflecting stronger growth in lower-margin Turkish operations within the EMEA region. This shift in the regional mix is expected to weigh on full-year profitability.

Regional results varied significantly. EMEA returned to year-on-year growth following a soft prior-year comparison, with Turkey standing out due to robust end-market demand, pricing initiatives, and the impact of currency devaluation. By contrast, Western Europe and the UK saw weaker demand in higher-margin markets.

In the Americas, sales maintained low-to-mid-single-digit growth, supported by pricing discipline and stability across distributor channels. Meanwhile, APAC sales declined slightly year-over-year, affected by market softness in China and challenging prior-year comparatives.

Essentra said it remains focused on improving operational efficiency, highlighting progress in manufacturing footprint optimization, selective capital investments, and the continued rollout of its ERP system.

The company reported strong operating and free cash flow generation, reinforcing management’s expectation that full-year leverage will stay within the medium-term target range of 0.5x to 1.5x.

Looking ahead, Essentra expects its full-year 2025 EBITA margin to remain broadly in line with the first-half level of 10.8%, as the dilutive effect of Turkish growth is set to continue into the fourth quarter.

Rémy Cointreau (EU:RCO) SA has lowered its full-year 2026 guidance after reporting a steeper-than-expected decline in second-quarter sales, citing weak market conditions in both the United States and China.

The French premium spirits maker said organic sales fell 11% in the second quarter, missing the company-compiled consensus for a 9.5% decline. Analysts at Morgan Stanley noted that the “magnitude of today’s cuts is significantly larger than expectations” as Rémy Cointreau reduced both its revenue and profit forecasts.

The company now expects full-year organic sales growth to range from flat to low single digits, down from earlier guidance of mid-single-digit growth. It also projects organic EBIT to decline by low double-digit to mid-teen percentages, compared with previous expectations of a mid-single-digit drop. According to Morgan Stanley, the updated guidance “implies mid-teens% cuts to FY26 EBIT at the midpoint.”

Currency effects are expected to further pressure results, with management forecasting a €50–60 million hit to sales and a €25–30 million impact on EBIT, widening from the earlier outlook of €15–20 million. Tariff-related costs were revised down to €25 million from €30 million, including €5 million in China and €20 million in the U.S.

In the company’s core U.S. cognac segment, sales grew by a mid-teens percentage, while depletion volumes fell 3.5% over the past three months — an improvement from the 8.5% decline seen in the prior quarter. Overall inventories in the U.S. market remained stable at “close to 4M” months of supply.

In Mainland China, cognac sales dropped 25%, impacted by “stricter discipline and austerity measures impacting consumer confidence,” according to Morgan Stanley. In Europe, the Middle East, and Africa, sales fell by the mid-teens percentage, pressured by “strong competitive / promotional pressures in most markets and weak demand.”

The company’s liqueurs and spirits division recorded a 5.3% organic sales drop during the quarter, with both the U.S. and EMEA regions declining by mid-single digits — partly due to “adverse phasing after a stronger Q1.” U.S. value depletions for Cointreau and The Botanist were flat in the quarter, while EMEA value depletions showed slight growth in the first half.

For the first half of FY26, net sales totaled €490 million, down 8.3% year-on-year, while EBIT reached €117 million, representing an organic decline of 14.3%. The EBIT margin fell to 23.7%, down 390 basis points from last year. Adjusted net profit came in at €67 million, down 27.2% year-on-year.

Morgan Stanley said the lowered outlook reflects “deteriorating market conditions in China and the weaker-than-expected rebound in US sales,” adding that the foreign exchange outlook has also worsened.

Getlink (EU:GET) shares climbed 2% after the UK’s Office of Rail and Road (ORR) granted Virgin Trains Europe (VTE) access rights to the Temple Mills International Depot (TMI).

The ORR reviewed applications from four companies — Virgin, Evolyn, Gemini, and Trenitalia — alongside a submission from Eurostar, the current operator of the facility. The regulator rejected the other applications, citing insufficient capacity at TMI to accommodate additional operators beyond VTE.

Analysts at Jefferies described the decision as “a positive step towards increased passenger traffic through the tunnel,” noting that Virgin intends to carry around 6 million passengers annually once operations begin in 2030.

The approval represents a major milestone for Virgin Trains Europe as it advances its plans to expand in the European high-speed rail market.

TotalEnergies (EU:TTE) reported third-quarter earnings in line with market expectations, as higher production and stronger refining margins helped counterbalance the impact of softer oil prices. Despite the solid performance, shares slipped 1.2% in early Thursday trading following the announcement.

The French energy company posted adjusted net income of $4.0 billion, down slightly from $4.1 billion in the same quarter last year and broadly matching estimates compiled by LSEG. Cash flow rose 4% year-on-year to $7.1 billion, supported by steady upstream and downstream performance. Average upstream output reached 2.5 million barrels of oil equivalent per day.

Chief Executive Officer Patrick Pouyanné said: “The company’s strong financials are underpinned by accretive hydrocarbon production growth of more than 4% year-on-year and improved downstream results.”

Oil prices remained below 2024 levels as increased supply from OPEC+ and other producers reignited oversupply concerns. The weaker price environment, along with subdued European petrochemical demand, prompted TotalEnergies last month to trim spending and share buyback plans to preserve balance sheet strength.

The group’s gearing ratio — a measure of debt to equity — eased to 17.3% from 17.9% in the previous quarter, while net debt declined 5% sequentially to $24.6 billion.

Commenting on the results, Jefferies analyst Mark Wilson noted that the outcome was supported by “upstream growth and working capital,” adding that net debt improvement was “helped by $1.6bn working capital benefit.”

Drax Group plc (LSE:DRX) has agreed to acquire a 260MW battery energy storage portfolio from Apatura Limited for £157.2 million, marking a major step in expanding its flexible generation capacity in the UK. The projects, located across Scotland and England, each have a two-hour duration capacity and will be developed under staged payments between 2025 and 2028, linked to key construction milestones.

Completion of the first two acquisitions is expected in 2025, with the third project scheduled for early 2026. Construction on all three sites is planned to start later that year, and the first site is expected to become operational in 2027.

The agreement includes contractual safeguards against cost overruns and delays, with Apatura responsible for development management and assuming most of the construction risk. Drax has also secured a first-offer option on an additional eight projects totaling 289MW currently under development by Apatura.

Drax Group CEO Will Gardiner said: “This acquisition is our first investment in short duration storage as part of our FlexGen portfolio, supporting UK energy security and a clean power system.”

The company added that the transaction is expected to generate returns “significantly ahead” of its Weighted Average Cost of Capital (WACC) and will be financed through cash and existing credit facilities.

Once fully operational, the new battery assets will complement Drax’s existing pumped storage, hydro, and gas turbine capacity. The combined FlexGen portfolio will reach 1.8GW of storage and flexible generation across nine sites, and together with Drax Power Station’s 2.6GW, will provide a total of 4.4GW of dispatchable power for the UK grid.

Empire Metals Limited (LSE:EEE) has raised £7 million through a subscription of new ordinary shares with existing institutional investors. The capital will fund the next stage of development at the company’s Pitfield Titanium Project in Western Australia, focusing on resource expansion, metallurgical testwork, and pilot-scale production aimed at delivering high-purity TiO₂ product samples.

The company said the proceeds will also support team expansion and initial work toward a potential dual listing on the ASX, reflecting its strategy to broaden market access and investor engagement. The successful funding round highlights the strong strategic appeal of the Pitfield Project and positions Empire Metals to advance into its next phase of growth, strengthening its market presence and long-term value potential.

More about Empire Metals Ltd

Empire Metals Ltd is an exploration and resource development company focused on fast-tracking the commercialization of the Pitfield Titanium Project in Western Australia. The project hosts one of the world’s largest and highest-grade titanium resources, with a Mineral Resource Estimate of 2.2 billion tonnes at 5.1% TiO₂. Empire Metals aims to produce high-value titanium products — including metal and pigment-grade materials — supported by strong logistics and infrastructure for global distribution.

Shell (LSE:SHEL) reported higher-than-anticipated profits for the third quarter of 2025, supported by stronger sales volumes and improved trading margins. The oil and gas major also announced plans to return an additional $3.5 billion (£2.65 billion) to shareholders through share buybacks.

The FTSE 100 company posted adjusted earnings of $5.43 billion (£4.1 billion) for the period, topping analyst expectations. This marked a 27% increase compared with the previous quarter, though results were below the $6 billion (£4.6 billion) reported in the same quarter last year.

Shell said volumes rose from the prior quarter and noted a $161 million tax benefit from favorable write-offs. However, it added that these gains were partially offset by higher depreciation, depletion, and amortization costs.

Performance was underpinned by the group’s integrated gas division, where income rose 28% and earnings increased 23% quarter-on-quarter. Meanwhile, Shell’s renewables arm returned to profitability, with improved trading and marketing helping to offset earlier losses in parts of the business.

Chief Executive Wael Sawan said: “Shell delivered another strong set of results, with clear progress across our portfolio and excellent performance in our marketing business and deepwater assets in the Gulf of America and Brazil. Despite continued volatility, our strong delivery this quarter enables us to commence another 3.5 billion US dollars of buybacks for the next three months.”

The update followed weaker-than-expected results from Norwegian rival Equinor earlier in the week. Shell’s stock has outperformed many of its industry peers over the past year, gaining nearly 16% over the last twelve months.

Campari (BIT:CPR) shares jumped more than 9% on Thursday after the Italian beverage group reported stronger-than-expected third-quarter profits, as cost savings and margin improvements offset slower sales growth.

The maker of Aperol and Wild Turkey posted organic EBIT growth of 19.5%, nearly double the consensus estimate of 10%. Organic net sales rose 4.4%, missing expectations of 5.3%, with total quarterly sales reaching €753 million, slightly below analyst forecasts of €775 million.

According to Kepler Cheuvreux, the results reflected “a solid gross margin performance of 180bps organic improvement in Q3, and a 3.8% organic decline in SG&A costs in the quarter.”

All business regions delivered positive organic growth, led by Asia Pacific (+5.7%), the Americas (+4.7%), and EMEA (+3.8%). The company benefited from lower input costs—particularly agave—and a favorable sales mix driven by Espolòn tequila, though these gains were partially offset by higher logistics expenses. Campari said it expects additional margin tailwinds from lower input costs in the fourth quarter.

The group maintained its 2025 guidance, projecting moderate organic revenue growth and a stable EBIT margin, now adjusted to include the impact of tariffs. Kepler Cheuvreux called the revised outlook an upgrade, as the expected tariff hit was reduced to about €15 million.

Campari’s cost-efficiency plan remains on track, with management anticipating a 50-basis-point margin benefit in 2026 from reduced SG&A expenses.

In the aperitifs segment, which includes Aperol and Campari, sales were flat in the third quarter and up just 1.3% for the first nine months of the year. Aperol revenue fell 6%, weighed by weaker demand in Italy and Germany, as well as slower sales in the U.S. Meanwhile, the rest of the aperitifs portfolio—representing roughly 10% of total sales—grew by 21%.

Kepler Cheuvreux cut its 2025 organic net sales growth forecast to 1.4% from 3.0% but raised its EBIT estimate by 1.6%. Adjusted EBIT is now projected at €614 million for 2025, compared with €605 million previously, while adjusted net profit is expected to rise 1.9% to €375 million. Forecasts for 2026 and 2027 remain unchanged.

The brokerage reiterated a “buy” rating with a target price of €7.20, implying a potential 32.4% upside from Wednesday’s close at €5.44. At that level, Campari would trade at 13.5x estimated 2026 EV/EBITDA, below its 10-year average of 18x, and at 21x 2026 earnings, roughly 25% under its historical average.

Kepler Cheuvreux also noted that Campari’s net debt-to-EBITDA ratio improved to 2.9x by the end of September, highlighting ongoing balance sheet strengthening. The firm expects additional margin gains from further cost reductions and lower agave prices in the coming quarters.