Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq climbs to record highs on strong earnings and cool CPI

ASX 200 futures are up 26pts (+0.28%) as of 8:30 am AEDT.

In a nutshell:

• S&P 500, Dow, Nasdaq and Russell 2000 all closed at fresh all-time highs

• US September CPI was slightly cooler-than-expected

• 29% of S&P 500 companies have so far reported Q3 earnings, with EPS growth of 9.2% outpacing 7.9% consensus

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gapped up and closed near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher and closed near best levels, with the S&P 500, Nasdaq, Dow and Russell 2000 all closing at fresh all-time highs

• Broad risk-on move underpinned by cooler-than-expected US CPI and PMIs, above consensus Q3 earnings growth (so far) and confirmation of Trump-Xi meeting next week

• US weekly recap: Russell 2000 (+2.50%), Nasdaq (+2.31%), Dow (+2.20%), S&P 500 (+1.92%)

• US earnings so far so good, with Q3 S&P 500 EPS at 9.2% vs. 7.9% consensus, of the 29% of companies that have reported, 87% have beaten consensus EPS expectations vs. 78% five-year average

• Big tech earnings on Wed-Fri likely to drive direction of markets for the rest of 2025 (BBG)

• Investors revisiting dotcom-era strategies to navigate AI bubble risks, shifting from hyped stocks to emerging winners (RT)

• Hedge funds' exposure to AI-related hardware reaches highest level this month (RT)

• Long-end JGB yields decline as PM Takaichi sets restrained tone over fiscal spending (NK)

STOCKS

• Intel gives upbeat revenue guidance, sees demand outstripping supply into 2026 (BBG)

• Ford cuts guidance and flags up to $2bn hit from September fire, expects to recoup losses next year (Bloomberg)

• Google and Anthropic confirm deal for Google to supply to supply over 1 GW of AI compute capacity (FT)

• Apple loses UK antitrust lawsuit over App Store charges, with potential damages upwards of £1.5bn (FT)

• GM and Stellantis will face tariffs on US-made vehicles imported to Canada after reducing Ontario assembly-line work (BBG)

• Target to cut ~8% of corporate workforce amid sales slump (CNBC)

• Applied Materials to cut 4% of workforce amid challenges from US export controls (BBG)

TARIFFS

• 'Positive framework' agreed on for Trump-Xi summit, says Bessent (FT)

• Trump says he is confident in reaching deal with Xi at next week's meeting after success in preliminary talks (CNBC)

• Bessent says US and China are likely to avoid new 100% tariff (NBC)

• Trump unveils slew of trade and minerals deals amid visit to Southeast Asia, agreements include exemptions from tariffs with key exports from countries like Thailand, Cambodia, Vietnam and Malaysia (BBG)

• Trump calls off trade talks with Canada, claims Ottawa interfering in US court decisions on tariffs (BBG)

• South Korea and US still far apart on key issues in trade talks (YH)

• US and Brazil launch trade talks after Trump and Lula repair ties (BBG)

CENTRAL BANKS

• JP Morgan and BofA expect Fed to end QE this month after previously forecasting runoff ending December or early 2026 (BBG)

• PBoC adviser urges China to roll out bold spending package to strengthen household and company finances (BBG)

• Economists expect ECB to hold for next two years (BBG)

SHUTDOWN

• US shutdown enters 22nd day, now the second-longest in history amid stalemate over expiring healthcare subsidies (BBG) 

• White House warns of impact of flight delays due to air traffic control staffing issues amid shutdown (RT)

• Democrats blocked Republican bill to pay essential federal workers, while GOP rejected two Democratic proposals (NYT)

ECONOMY

• US September core CPI up 0.2% month-on-month, cooler than 0.3% consensus, both annualised core and headline at 3.0%, both cooler than 3.1% consensus (BBG)

• Japan core inflation accelerates for first time in four months (RT)

• Eurozone PMIs unexpectedly higher, reaching a 17-month high at 52.2, with strong growth in new orders (BBG)

ASX TODAY

• Lindian Resources confirms Kangankunde Project unaffected by Malawi raw mineral export order, country leadership recently indicated that it may not allow the export of raw materials out of the country, though excludes processed/refined minerals (LIN)

• Pantoro reports Q1 gold production of 19.6koz at AISC of A$3,139/oz, reaffirms FY26 guidance (PNR)

• Perseus Mining reports Q1 gold production of 100koz vs. 103.5koz ests, AISC of $1,463/oz vs. $1,518/oz ests, FY26 guidance unchanged (PRU)

• Viva Energy reports Q3 sales volumes up 1.0% to 4,203Ml (VEA)

WHAT TO WATCH TODAY

• Risk on: Very strong US lead, with a mix of growth/value leading the upside. Though S&P 500 sectors like Energy, Materials, Staples and Discretionary finished red. Lots of growth-y names starting to bounce (e.g. Life360 +3.8% after ~20% pullback) or move towards the top of recent trading ranges (e.g. Block +1.2%, been sideways since July). Overnight resource-related ETFs like lithium (+4.5%) and copper (+1.0%) continued to trend higher, while uranium (+3.1%) bounced from a near 20% pullback from its 15 Oct high. Overall, a strong lead as the market enters a seasonally strong period.

BROKER MOVES

• Fortescue upgraded to hold from Sell; target up to $19.30 from $17.05 (BP)

• Pilbara Minerals downgraded to Neutral from Outperform but target up to $3.00 from $2.75 (MQG)

• Qantas upgraded to Outperform from Neutral; target up to $12.29 from $12.00 (MQG)

Stocks trading ex-dividend: 

• Mon 27 Oct: None

• Tue 28 Oct: None

• Wed 29 Oct: Bank of Queensland (BOQ) – $0.20, Waterco (WAT) – $0.08

• Thu 30 Oct: Acrow (ACF) – $0.03, Autosports (ASG) – $0.045

• Fri 31 Oct: None

Other ASX corporate actions today:       

• Dividends paid: FOS Capital (FOS)

• Earnings: None

• IPOs: Temas Resources (TIO) at 11:30 am

• AGMs: Bega Cheese (BGA) 

Economic calendar (AEDT):

No major economic announcements.