Author: Fiona Craig

U.S. stock index futures pointed to a positive start on Monday, signaling that Wall Street may extend the momentum built in Friday’s rally.

Early buying interest is being supported by a The Wall Street Journal report suggesting that the Trump administration has been quietly easing some tariff measures that underpin the president’s signature trade policy.

According to the report, President Donald Trump has “exempted dozens of products from his ‘reciprocal tariffs’ in recent weeks and offered to carve out hundreds more goods when countries strike trade deals with the U.S.”

Even so, investors are expected to remain somewhat cautious ahead of Friday’s release of the consumer price index, a key inflation indicator that could influence expectations for future Federal Reserve policy.

Despite the ongoing government shutdown, the Bureau of Labor Statistics confirmed the data would still be released to allow the Social Security Administration to meet legally mandated payment deadlines.

Earnings season is also set to ramp up this week, with results expected from heavyweights including The Coca-Cola Company (NYSE:KO), General Motors (NYSE:GM), Netflix (NASDAQ:NFLX), AT&T (NYSE:T), IBM (NYSE:IBM), Tesla (NASDAQ:TSLA) and Intel (NASDAQ:INTC).

On Friday, the major U.S. averages closed higher after shaking off early uncertainty. The Dow Jones Industrial Average climbed 238.37 points, or 0.5%, to 46,190.61. The Nasdaq Composite added 117.44 points, or 0.5%, to 22,679.97, while the S&P 500 gained 34.94 points, or 0.5%, to 6,664.01.

The rally helped the indexes notch solid weekly gains: the Nasdaq advanced 2.1%, while the S&P 500 and Dow rose 1.7% and 1.6%, respectively.

The rebound was driven in part by fading worries over bad loans that had weighed on the market a day earlier. Jefferies Financial Group (NYSE:JEF) and Zions Bancorporation (NASDAQ:ZION) both bounced back strongly, while Truist Financial (NYSE:TFC), Fifth Third Bancorp (NASDAQ:FITB) and Huntington Bancshares (NASDAQ:HBAN) climbed after posting better-than-expected earnings.

Trade optimism also contributed to Friday’s gains. In an interview with Fox Business, Trump said the steep tariffs he had threatened on Chinese imports are “probably not [sustainable]” but argued “they forced me to do that.”

He also confirmed plans to meet with Chinese President Xi Jinping later this month in South Korea, dispelling doubts he had previously raised about the usefulness of the summit.

Sector-wise, most areas posted modest moves, with gold stocks underperforming sharply. The NYSE Arca Gold Bugs Index tumbled 7.4% after hitting a record high the previous day, as gold prices pulled back from recent peaks.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

European equities advanced on Monday, with defense stocks at the forefront of the rally as investors digested escalating geopolitical tensions. Fighting persists in Ukraine with no signs of peace, while Israel and Hamas continue to trade accusations of violating the Gaza ceasefire.

Sentiment was also buoyed by easing fears over the U.S. banking sector and growing expectations of a thaw in trade relations between the United States and China. U.S. President Donald Trump helped calm markets by signaling that the steep tariffs he had threatened on Chinese imports would be “not sustainable.” A new round of trade talks between the two countries is scheduled to take place this week.

Major indices across the region were in positive territory: Germany’s DAX Index climbed 1.2%, the U.K.’s FTSE 100 added 0.4%, while France’s CAC 40 hovered around the flat line.

Defense and Industrial Stocks Lead in London

In the U.K., Babcock International (LSE:BAB) was the top gainer, rising 3%. Other notable climbers included Prudential (LSE:PRU), Airtel Africa (LSE:AAF), St. James’s Place (LSE:STJ) and Rolls-Royce Holdings (LSE:RR.), all up between 2% and 2.5%. Gains of 1.5% to 1.8% were also seen in Melrose Industries (LSE:MRO), Weir Group (LSE:WEIR), Endeavour Mining (LSE:EDV), BAE Systems (LSE:BA.) and Smiths Group (LSE:SMIN).

On the downside, Pearson (LSE:PSON) dropped 2.7%, while WPP (LSE:WPP), Persimmon (LSE:PSN), Barratt Redrow (LSE:BTRW), EasyJet (LSE:EZJ), Metlen Energy & Metals (LSE:MTLN), Mondi (LSE:MNDI), Berkeley Group Holdings (LSE:BKG) and Marks & Spencer (LSE:MKS) declined between 1% and 2%.

Rheinmetall Rallies in Germany, BNP Paribas Slumps in France

In Germany, defense group Rheinmetall (TG:RHM) jumped 5.7%. Gains of 1.3% to 2.5% were also recorded by Infineon Technologies, Heidelberg Materials, Siemens Energy, SAP, Siemens, Daimler Truck Holding and Deutsche Bank. Meanwhile, Merck Group, Volkswagen Group, Zalando, Symrise, Vonovia and Mercedes-Benz Group lagged.

In France, Kering (EU:KER) surged 3.75% after agreeing to sell its beauty division to L’Oréal (EU:OR) for €4 billion, with L’Oréal shares ticking slightly higher. Thales Group climbed 3.6%, Safran added nearly 3%, and Airbus rose more than 1% after securing an order for 30 aircraft from IndiGo.

In stark contrast, BNP Paribas plunged 9% after a U.S. jury found the bank liable for supporting Sudan’s former regime, awarding three plaintiffs over $20 million in damages. Teleperformance lost 2.5%, while Credit Agricole and Societe Generale fell 1.4% and 1.3%, respectively.

Economic Data

On the macroeconomic front, data from Destatis showed German producer prices dropped 1.7% year-on-year in September, following a 2.2% decline in August. On a monthly basis, prices slipped 0.1%, compared to expectations of a 0.1% increase. This marked the seventh straight monthly decline in producer prices.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

French banking stocks fell sharply on Monday as investors reacted to a surprise sovereign credit downgrade by S&P Global and a costly legal defeat for BNP Paribas (EU:BNP).

Market pressure mounted after a jury awarded approximately $20 million to three plaintiffs in a class action lawsuit accusing BNP Paribas—Europe’s largest bank by assets—of helping finance genocide in Sudan. According to Bloomberg, the verdict could push the lender to settle with other plaintiffs in the ongoing case.

As of 09:49 GMT, shares of BNP Paribas were down more than 10%, while Crédit Agricole (EU:ACA) and Société Générale (EU:GLE) slid 3.5% and 2.5%, respectively.

On Friday, in an unscheduled update, S&P Global cut France’s credit rating to “A+/A-1” from “AA-/A-1+,” citing deep political uncertainty. The downgrade followed a volatile week in which Prime Minister Sébastien Lecornu suspended a controversial pension reform plan and survived two parliamentary no-confidence votes.

“Despite this week’s submission of the 2026 draft budget to the parliament, uncertainty on France’s government finances remains elevated,” S&P Global wrote in its statement.

The agency added, “While, in our view, the 2025 general government budget deficit target of 5.4% of GDP will be met, we believe that, in the absence of significant additional budget deficit-reducing measures, the budgetary consolidation over our forecast horizon will be slower than previously expected.”

S&P warned that the fiscal turmoil is likely to weigh on both investment activity and private consumption. The agency also noted that passing a 2026 budget could help clarify France’s plans to manage its rising debt burden, projected to reach 121% of GDP by 2028, up from 112% at the end of last year.

“The survival of the Lecornu government removed near term risk of political instability, but it does not address fiscal concerns,” analysts at Jefferies Group LLC said. They also pointed to a “high risk” of a similar downgrade by Moody’s Investors Service, which could prompt institutional investors to scale back exposure to French assets.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

The major U.S. stock benchmarks closed higher Friday, as optimism over U.S.–China trade talks helped offset the sharp sell-off in regional bank shares earlier in the week.

The Dow Jones Industrial Average climbed 238.37 points, or 0.52%, to finish at 46,190.61. The S&P 500 rose 0.53% to 6,664.01, while the Nasdaq Composite gained 0.52% to end at 22,679.98.

Markets picked up momentum late in the session after Treasury Secretary Scott Bessent signaled he would hold talks with his Chinese counterpart later that day. President Trump also reassured reporters at the White House that his planned meeting with Chinese President Xi Jinping would still take place at the end of the month, easing fears over the potential introduction of a 100% tariff on Chinese goods starting Nov. 1.

Despite some midweek turbulence, all three major averages ended the week with solid gains. The S&P 500 advanced 1.7% for the week, helped by stronger-than-expected early Q3 earnings results. The Dow climbed 1.6%, while the Nasdaq led with a 2.1% gain.

CPI and earnings take the spotlight

With official U.S. data releases delayed by the ongoing government shutdown, corporate earnings and management commentary will provide key insight into the state of the economy.

“Reports and what companies say is really our best chance at assessing what the broader economic health is,” said Kevin Gordon, senior investment strategist at Charles Schwab, according to Reuters.

The U.S. Bureau of Labor Statistics confirmed the delayed consumer price index (CPI) for September will be released on Friday. The inflation print, a critical gauge for policymakers, lands just days before the Federal Reserve System’s next policy meeting on October 28–29. Markets currently anticipate another 25-basis-point rate cut, following the Fed’s first cut of the year in response to soft labor data.

Tesla, Netflix among key earnings this week

About 14% of S&P 500 companies are scheduled to report results in the coming days. Beyond profit numbers, investors will closely watch how firms plan to allocate cash amid an uncertain macro backdrop.

Goldman Sachs expects S&P 500 cash spending to rise 11% in 2026 to around $4 trillion, supported by “above-consensus AI capex growth” and a stronger economy. Roughly half is projected to go toward capital expenditures and R&D, 43% to dividends and buybacks, and the remainder to M&A.

“The AI hyperscalers now account for 27% of S&P 500 capex, and we expect their capex spending will exceed the consensus forecast of 20% growth next year,” Goldman strategists led by David Kostin said. “These companies have recently been growing capex at a run rate of 75% and they continue to message that supply cannot keep pace with AI demand,” they added.

The so-called Magnificent 7 are expected to post 15% earnings growth in Q3, while the other 493 S&P companies are tracking 4%. Last quarter, the Mag-7 delivered a 27% surge, nearly double initial forecasts. “We could see something similar again,” strategists at JPMorgan Chase & Co. led by Mislav Matejka said.

Earnings to watch this week include Tesla, Inc. (NASDAQ:TSLA), Netflix, Inc. (NASDAQ:NFLX), The Coca-Cola Company (NYSE:KO), General Electric Aerospace (NYSE:GE), General Motors (NYSE:GM), IBM (NYSE:IBM), Ford Motor Company (NYSE:F), and Intel Corporation (NASDAQ:INTC), among others.

What analysts are saying about U.S. stocks

Morgan Stanley: “Our rolling recovery/early cycle thesis remains intact over the next 6-12 months. That said, we think it’s important to see clearer trade de-escalation from both sides, stability in EPS revisions, and more ample liquidity before declaring the all-clear on the risk of a further near-term correction.”

Evercore ISI: “Volatility in October 2025 will ultimately prove to be an acceleration of the AI Bull market – through earnings strength, an easing Fed, OBBB stimulus and revived capital markets cycle – not the end.”

RBC Capital Markets: “The deterioration in earnings sentiment, which surged from typical non-crisis lows in late April to typical non-crisis recovery peaks in mid-August has been one thing that has kept us on guard for a tier 1 / 5-10% pullback in US equities this fall, along with stretched valuations, weak seasonals, choppy bitcoin trends, weaker US equity flows, recent declines in our sentiment indicator, and jittery investors in our meetings that we’ve worried would be inclined to take profits soon.”

Goldman Sachs: “The backdrop of healthy earnings growth, loose financial conditions, and falling policy uncertainty should support strong cash spending growth next year. The recent outperformance of companies with weak balance sheets is one reflection of the equity market moving to price this friendly backdrop.”

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

The U.S. dollar inched higher on Monday, recovering part of last week’s slide as traders turned cautious ahead of the upcoming inflation report and kept a close eye on the health of regional banks.

At 04:15 ET, the Dollar Index, which measures the greenback against a basket of six major peers, was up 0.1% at 98.270, after suffering its steepest five-day drop since late July.

Dollar steadies ahead of CPI

The currency has found some support thanks to a rebound on Wall Street, even as renewed stress around U.S. regional banks has unsettled markets. Concerns were reignited after two lenders — Zions Bancorporation (NASDAQ:ZION) and Western Alliance Bancorporation (NYSE:WAL) — flagged loan issues linked to fraud.

“Concerns about the health of regional banks and the broader quality of credit in the U.S. remain very central for FX markets,” said analysts at ING in a note.

“Indications that lending issues don’t extend beyond Zions Bancorp and Western Alliance could offer some further relief to the dollar, but it might not be enough to fully price out concerns about the underlying health of the credit market and have the greenback reclaim all losses.”

Attention is also turning to Friday’s release of the delayed September consumer price index, expected despite the ongoing government shutdown.

“We are aligned with consensus in expecting a 0.3% MoM core read – which should further endorse a 25bp cut by the Fed next week,” said ING. “Barring major deviations from consensus, the inflation release should not have major FX implications, with jobs markets playing a more important role for rate expectations.”

Euro holds steady on political calm in France

EUR/USD edged up 0.1% to 1.1659, as the euro stabilized following a temporary easing of political tensions in France. Prime Minister Sébastien Lecornu survived two no-confidence votes last week after agreeing to postpone a controversial pension reform.

“The calm on the French political side allowed the euro to recover a bit, but it’s hard to get too comfortable with France. S&P downgraded the country from AA- to A+ in an unscheduled move on Friday,” said ING.

Meanwhile, fresh data showed German producer prices fell 0.1% in September from the previous month, dropping 1.7% year-on-year — a sign of weak underlying price pressures in Europe’s largest economy.

Sterling softens slightly ahead of budget

GBP/USD slipped 0.1% to 1.3421 as investors await further details ahead of the U.K.’s November budget.

“Expect a steady flow of information about the content of the November budget in the coming weeks. That appears like a double-edged sword for sterling. Any concerns about fiscal sustainability will hit back-end gilts and spill over into the pound, while higher taxation should dampen growth and raise chances of earlier BoE easing,” said ING.

Yen weakens on rising Takaichi expectations

USD/JPY climbed 0.1% to 150.81, with the yen under mild pressure amid growing speculation that Liberal Democratic Party leader Sanae Takaichi will become Japan’s next prime minister.

Takaichi is viewed as a fiscal dove, signaling increased government spending and looser financial conditions in the months ahead. She is also expected to oppose further interest rate hikes by the Bank of Japan, which meets next week.

Yuan slips slightly after GDP data

USD/CNY eased marginally to 7.1242 after GDP data showed the Chinese economy grew slightly more than expected in the third quarter.

GDP rose 4.8% year-on-year, above forecasts of 4.7% but down from 5.2% in Q2 — marking the slowest pace since the third quarter of 2024.

Even so, year-to-date growth remains above Beijing’s 5% target, supported by exports, though weak consumer spending and private investment continue to weigh on momentum.

Aussie dollar inches up

AUD/USD added 0.1% to 0.6501, with the risk-sensitive currency advancing slightly as broader sentiment in Asian markets improved.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

U.S. stock futures ticked up early Monday as investors welcomed signs of a possible easing in trade frictions between Washington and Beijing. Meanwhile, fresh data shows the iPhone 17 from Apple (NASDAQ:AAPL) is selling faster than last year’s model in the U.S. and China, and Kering (EU:KER) has struck a €4 billion deal to hand over its beauty unit to L’Oréal (EU:OR).

U.S. futures move higher

Wall Street looks set to open in the green as traders monitor early signs of a thaw in U.S.-China relations and prepare for a big week of earnings reports.

By 03:28 ET, Dow futures were up 176 points (+0.4%), S&P 500 futures climbed 30 points (+0.5%), and Nasdaq 100 futures gained 139 points (+0.6%).

All three major indexes closed the previous week higher. President Donald Trump said his plan for triple-digit tariffs on Chinese imports is “not sustainable,” even as he criticized Beijing for tightening restrictions on rare earth exports.

Trump confirmed he will meet Chinese President Xi Jinping in South Korea later this month, saying in a TV interview that the U.S. is “going to be fine with China.”

Treasury Secretary Scott Bessent also said he will meet Chinese Vice Premier He Lifeng this week in an effort to cool tensions. Chinese state media reported that He and Bessent held “constructive discussions” and agreed to resume trade talks “as soon as possible.”

Despite the softer tone, tariffs remain a core policy weapon for the White House. Trump pledged to keep “massive” tariffs on India in place until it halts purchases of Russian oil and hinted at increased tariffs on Colombia.

Investors will also be keeping an eye on results from Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX), as well as an inflation report delayed by the U.S. government shutdown.

iPhone 17 outpaces iPhone 16

Sales of Apple’s iPhone 17 series have outstripped those of the iPhone 16 by 14% during the first 10 days of availability in the U.S. and China, according to Counterpoint Research.

The base model has been the standout, with sales jumping nearly one-third compared to last year’s entry-level iPhone. Chinese consumers have shown particularly strong demand, with unit sales almost doubling from a year ago.

“The base model iPhone 17 is very compelling to consumers, offering great value for money,” said Mengmeng Zhang, Senior Analyst at Counterpoint. She added that the model delivers “a better chip, improved display, higher base storage, selfie camera upgrade — all for the same price as last year’s iPhone 16.”

In the U.S., the iPhone 17 Pro Max has been the top seller, helped by carriers raising maximum subsidies by 10%, a move interpreted as a push toward high-spending customers.

Kering to sell beauty business to L’Oréal in €4B deal

Kering announced plans to sell its fragrance house Creed to L’Oréal in a €4 billion all-cash transaction.

The deal also includes licensing rights for brands such as Gucci, Balenciaga and Bottega Veneta. Once approved by regulators, L’Oréal will gain exclusive rights to produce and distribute beauty products for these labels for 50 years, starting in the first half of 2026.

The companies also announced a 50/50 joint venture aimed at exploring “new business opportunities at the intersection of luxury, wellness, and longevity.”

“This partnership allows us to focus on what defines us best: the creative power and desirability of our Houses,” said Kering CEO Luca de Meo.

Kering shares climbed more than 4% in early European trading, while L’Oréal gained nearly 1%.

China’s growth slows but beats forecasts

China’s economy expanded slightly more than expected in the third quarter of 2025, though growth slowed to its weakest pace in a year as disinflation and trade tensions weighed.

GDP rose 4.8% year-on-year, just above expectations of 4.7% but down from 5.2% in the previous quarter. On a quarterly basis, growth came in at 1.1%, above the 0.8% forecast.

Year-to-date GDP stood at 5.2%, a touch lower than the 5.3% recorded last quarter but still above Beijing’s 5% annual target.

Gold steadies near record highs

Gold prices edged higher Monday, clawing back some losses from last week while remaining close to all-time highs as investors digested a softer U.S. tone on China trade.

Spot gold rose 0.2% to $4,257.09 an ounce, while December futures gained 1.4% to $4,270.69/oz by 03:54 ET.

The metal retreated from record levels last week after Trump questioned the durability of the trade war with Beijing but confirmed talks are still on track. The shift in tone reduced some of the safe-haven demand that had recently fueled bullion’s rally.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

Gold prices moved up in Asian trading on Monday, trimming part of last week’s steep losses as investors responded to a more conciliatory tone from U.S. officials on trade relations with China. The precious metal also remained close to recent record levels.

Spot gold rose 0.4% to $4,267.70 an ounce, while December gold futures climbed 1.6% to $4,280.65 per ounce as of 00:49 ET (05:49 GMT). Spot prices had touched a record $4,379.44 last week before retreating.

Gold slips from record highs after U.S.-China tensions ease

The metal saw heavy selling last week after U.S. President Donald Trump downplayed the likelihood of a prolonged trade conflict with China and confirmed that negotiations were still moving forward. Trump said he viewed high tariffs on China as “not sustainable” and announced plans to meet Chinese President Xi Jinping in South Korea in two weeks.

Additionally, U.S. Treasury Secretary Scott Bessent confirmed that further discussions with Chinese officials were scheduled for this week. These comments boosted sentiment across financial markets, prompting investors to rotate out of safe-haven assets such as gold and into risk-sensitive instruments.

The retreat in gold was also amplified by profit-taking following a powerful two-month rally. The metal had been supported by mounting concerns over the U.S. economy amid a government shutdown and growing expectations of additional interest rate cuts by Federal Reserve System.

Safe-haven demand continues amid geopolitical risks

Gold’s gains on Monday were further underpinned by heightened geopolitical uncertainty. Tensions flared in the Israel-Hamas ceasefire over the weekend, though Israel signaled the truce remained intact and humanitarian aid to Gaza would resume.

Meanwhile, global attention turned to U.S. efforts to broker a ceasefire in the Russia-Ukraine conflict. Trump reportedly met with Ukrainian President Volodymyr Zelensky and urged Kyiv to cede territory to Moscow, while also declining additional military support.

These developments, coupled with economic worries in the U.S., helped sustain demand for safe-haven assets, including gold and other precious metals.

Spot silver gained 0.6% to $52.2520 an ounce, hovering near its own all-time high, while spot platinum fell 1% to $1,597.02.

In the industrial metals segment, copper prices advanced after positive economic data from China, the world’s largest importer. The country’s GDP grew slightly faster than expected in the third quarter, though it was still the slowest expansion in a year.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

Oil prices moved lower on Monday as renewed U.S.-China trade frictions amplified concerns about a potential global oversupply, slowing growth, and weakening energy demand.

At 00:32 GMT, Brent crude futures slipped 24 cents, or 0.4%, to $61.05 a barrel, while U.S. West Texas Intermediate futures were down 21 cents, or 0.4%, at $57.33, giving up Friday’s modest gains.

Both benchmarks posted declines of more than 2% last week, their third consecutive weekly drop, weighed down in part by International Energy Agency forecasts pointing to a growing surplus in 2026.

“Concerns about oversupply from increased production by oil-producing nations, coupled with fears of an economic slowdown stemming from escalating U.S.-China trade tensions, are fuelling selling pressure,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.

“While the U.S. is stepping up pressure on buyers of Russian crude, the upcoming summit between U.S. President Donald Trump and Russian President Vladimir Putin adds uncertainty to the outlook, making it difficult for some investors to adjust their positions,” he said.

Last week, the head of the World Trade Organization urged Washington and Beijing to ease trade tensions, warning that decoupling between the two largest economies could shrink global output by 7% over time.

The world’s two biggest oil consumers have recently reignited their trade dispute, imposing reciprocal port fees on cargo shipments, a move that could disrupt global shipping flows.

Meanwhile, Trump and Putin agreed on Thursday to hold another summit on the war in Ukraine, even as Washington ramped up pressure on India and China to curb Russian oil purchases.

After meeting with Ukrainian President Volodymyr Zelenskiy at the White House on Friday, Trump called on both Ukraine and Russia to “stop the war immediately,” even if that requires Ukraine to give up territory.

Analysts and trade sources noted that U.S. and European pressure on Asian buyers of Russian energy could reduce India’s imports from December, potentially opening the door to cheaper supplies for China.

On the production side, Baker Hughes Company reported on Friday that U.S. energy companies added oil and natural gas rigs for the first time in three weeks, signaling a possible uptick in domestic output.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

JPMorgan Chase & Co. strategists expect the third-quarter earnings season to once again emphasize the divergence between U.S. and eurozone corporate results, with consensus forecasts calling for a 6% year-on-year increase in S&P 500 earnings compared to a 1% decline for the STOXX Europe 600.

Analyst projections have remained stable leading up to earnings releases, unlike the usual trend of downward revisions. Strategists noted that “activity momentum improved during the quarter,” supported by firmer PMI data. The team, led by Mislav Matejka, also pointed out that this unusual stability in forecasts over the past two months “raises the potential for positive surprises.”

Roughly 60% of the S&P 500’s market capitalization is set to report over the next two weeks, compared with around 50% for European stocks. Mega-cap technology names remain the engine of U.S. earnings growth, with the so-called Magnificent 7 expected to deliver 15% earnings growth after a 27% surge last quarter—nearly double initial forecasts.

For the rest of the S&P 500, earnings are projected to grow around 4%. JPMorgan noted that non-Mag 7 companies achieved their strongest earnings expansion in three years last quarter at 9%, and strategists see room for similar upside this season.

Eurozone corporates, by contrast, saw a 1% earnings contraction in the previous quarter, reinforcing the bank’s cautious outlook for the region since March. Even so, strategists anticipate the gap with the U.S. may narrow “by a smaller magnitude” this quarter, thanks to exporter earnings that have already been heavily rebased, opening the door for a potential “inflection.”

Median earnings growth paints a more even picture, with both regions expected to post about 4% year-on-year gains, leaving room for upside surprises if revenue trends hold.

Revenue momentum remains a risk factor, however, with weaker Brent crude prices and softer U.S. labor and retail indicators hinting at potential top-line pressure. Lower bond yields—down more than 60 basis points from their peak—have boosted defensive sectors like Utilities and Healthcare over the past one to three months in both the U.S. and Europe.

Strategists say this supports their long-duration positioning, but they also stress that “cyclicals sector earnings could start to look better” heading into 2026 as economic activity improves. They cite rising PMI readings, stronger credit impulses in Europe, and better consumer sentiment and liquidity conditions.

Looking further ahead, JPMorgan sees cyclical sectors benefiting from improving macroeconomic trends, including a potential rebound in Chinese consumer demand, which could lift luxury and industrial companies. While eurozone earnings forecasts for 2025 are still being revised downward, 2026 estimates suggest a rebound of nearly 15%, driven by favorable base effects and stronger domestic and external demand.

“We are now bullish Eurozone, post the sideways trading and amid a range of pushbacks,” the strategists wrote.

“If the latest tariff standoff and credit concerns result in some more equity weakness, we do not think Eurozone needs to be a beta on the way down, given more favourable positioning and valuations, and given an already weak recent relative performance,” they added.

They also reiterated their view that the recent political turbulence in France should be treated as a buying opportunity.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Some portions of this content may have been generated or assisted by artificial intelligence (AI) tools and been reviewed for accuracy and quality by our editorial team.

European markets started the week on a strong footing Monday, buoyed by sharp gains across Asia and ahead of a heavy schedule of corporate earnings.

By 07:10 GMT, Germany’s DAX was up 1%, France’s CAC 40 rose 0.5%, and the U.K.’s FTSE 100 climbed 0.4%. This followed a weak close on Friday, when worries surrounding the U.S. banking sector dragged European indices lower. A late rebound in U.S. regional banks helped ease those concerns going into the new week.

Nikkei Jumps on Political Developments

European sentiment was bolstered by a surge in Japanese stocks overnight. The Nikkei 225 soared more than 3% to surpass 49,000 points, hitting a record high after reports that Japan’s ruling Liberal Democratic Party secured enough parliamentary support to form a coalition government led by Sanae Takaichi.

Takaichi, widely seen as fiscally accommodative, is expected to support increased government spending and resist additional rate hikes from the Bank of Japan. Parliament is set to vote on her premiership on Tuesday, paving the way for Japan’s first female prime minister.

China’s Growth Slows but Beats Forecasts

In China, third-quarter GDP expanded by 4.8% year-on-year, slightly above market forecasts of 4.7% but slower than the 5.2% growth seen in the second quarter, according to official data released Monday. It marked the country’s slowest annual growth since Q3 2024, reflecting ongoing pressure from persistent disinflation and trade frictions with the U.S.

Meanwhile, in Europe, German producer prices slipped 0.1% in September, down 1.7% year-on-year, underscoring limited inflationary pressures in the eurozone’s largest economy.

Luxury Sector in Focus as Kering Sells Beauty Arm

The luxury sector is drawing attention after Kering (EU:KER) announced over the weekend that it would sell its beauty division to L’Oréal (EU:OR) for €4 billion. The deal reflects new CEO Luca de Meo’s strategy to reduce debt and refocus on the group’s fashion brands.

This week starts relatively quietly on the earnings front but will pick up pace in the coming days. L’Oréal reports Tuesday, while SAP (TG:SAP), Barclays (LSE:BARC) and Heineken (TG:HNK1) are scheduled for Wednesday. On Thursday, results from Kering, Roche (TG:RHO), Unilever (LSE:ULVR) and Lloyds Banking Group (LSE:LLOY) will be in focus.

In the U.S., major earnings this week include(NASDAQ:TSLA), Ford (NYSE:F), General Motors (NYSE:GM), Netflix (NASDAQ:NFLX), Procter & Gamble (NYSE:PG) and Coca-Cola (NYSE:KO), along with aerospace and defence giant RTX (NYSE:RTX) and tech stalwarts IBM (NYSE:IBM) and Intel (NASDAQ:INTC).

Oil Prices Slip as Supply Concerns Mount

Crude oil prices extended their decline Monday amid persistent concerns over weak demand and an expected supply surplus. Brent crude futures fell 0.8% to $60.83 a barrel, while U.S. West Texas Intermediate futures dropped 0.8% to $56.72.

Both benchmarks lost more than 2% last week, marking their third consecutive weekly decline, weighed down by the International Energy Agency’s warning of a looming supply glut in 2026.

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