Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq hit new highs, AI trade and M&A heat up

ASX 200 futures are up 11pts (+0.12%) as of 8:30 am AEDT.

In a nutshell:

• S&P 500, Dow and Nasdaq closed at yet another fresh all-time high

• Breadth was negative, with defensive sectors sharply lower and the Equal-weight S&P 500 (-0.86%) underperforming the official benchmark by over 100 bps

• Tech-heavy US market encouraged by Nvidia's GTC conference updates and pickup in M&A (over US$80 billion of deals announced on Tuesday)

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gapped up but closed off best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly higher but off best levels, though the S&P 500, Nasdaq and Dow all logged fresh all-time highs

• Breadth was very weak, with the Equal-weight S&P 500 (-0.86%) underperforming the official benchmark by 109 bps

• Nvidia (+4.9%) and Broadcom (+3.0%) the standouts after Jensen Huang dropped three major updates at the GTC conference (partnership with Nokia, introduced revolutionary high-speed interconnect system NVQLink and partnership with the US Department of Energy to construct supercomputers)

• Lots of moving parts, including easing US-China trade tensions, over US$80bn of M&A deals announced overnight, pickup in corporate layoffs and more earnings activity

• Worries over tariffs and bank loan losses dissipate as trade agreements, M&A and earnings push stocks to record highs (WSJ)

• US companies strike deals worth more than $80bn on Monday, continuing string of M&A activity (FT)

• Equity bulls bet on S&P 500 cruising past 7,000 after reaching 6,875, driven by positive trade and earnings (BBG)

• Goldman's Soloman dismisses systemic credit market risks, citing regional bank losses as "idiosyncratic events." (BBG)

• Gold briefly dips back below US$4,000/oz with some traders expecting a deeper slump ahead (FT)

• Shanghai Composite tops 4,000 level for first time in more than a decade as trade tensions de-escalate (BBG)

STOCKS

• Amazon to cut 14,000 corporate roles amid soaring AI investments (BBG)

• Nvidia to invest $1bn in Nokia, Nvidia chips to accelerate Nokia's 5G/6G networks, to Nokia's data center tech (BBG)

• Nvidia announces partnership with Uber, to expand fleet of 100,000 autonomous vehicles starting in 2027 (BBG)

• Quantum computing shares dip after Nvidia announced system to connect quantum computers to its AI chips (BBG)

• OpenAI completes recapitalisation as a nonprofit, Microsoft now owns ~27% of converted company (CNBC)

• UPS reveals in Tuesday's earnings report it has cut 48,000 jobs so far in 2025 (RT)

• Apple's services revenue poised to exceed $100bn, despite regulatory pressures, marking significant growth this year (FT )

• Paramount to cut 1,000 jobs on Wednesday in first round of layoffs (BBG)

TARIFFS

• US-China framework agreement leaves questions unanswered, fundamental issues unresolved (BBG)

• Trump to reportedly consider lowering tariffs on China if Beijing cracks down on fentanyl (RT)

• Trump praises Japan's first female leader, signs deals on trade and rare earth metals (RT)

• US and South Korea to sign partnership on AI and quantum computing (BBG)

• China-based analysts expect US will ease export controls in return for China relaxing rare earths export curbs (BBG)

CENTRAL BANKS

• Fed expected to announce end to QE at this week's meeting with liquidity having shifted from 'abundant' to 'ample' (FT)

• RBA to decide whether November rate cut needed, Bullock downplays September's weak jobs data (BBG)

SHUTDOWN

• Senate Republicans push for full government reopening, sensing pressure on Democrats amid federal workers union demands (AX)

• Largest US federal workers union calls for a "clean continuing resolution" to end lengthy government shutdown (AX)

ECONOMY

• German consumer sentiment slumps as income expectations weigh (RT)

• South Korea GDP expands at fastest pace since early 2024, aided by exports and private consumption (Yonhap)

ASX TODAY

• Arafura launched $475m institutional placement priced at 28 cents per share (26% discount to last close), largest shareholder Hancock to subscribe $125m (ARU)

• Cedar Woods issues trading update, guides to FY26 NPAT growth of ~15% vs. prior 10% (CWP)

• Domino’s denies takeover speculation, Chair Jack Cowin says focus is on turnaround, “the share price is undervalued and people get that” (AFR)

• Lynas to establish heavy rare earth separation facility in Malaysia, estimated cost of $180m (LYC)

• Medibank outlines FY30 targets in investor presentation, including Medibank Health segment earnings to at least $200m, Resident PHI market to at least 26.8% (MPL)

WHAT TO WATCH TODAY

• Uranium: Big jump for uranium equities overnight after the US government announced a partnership with Brookfield and Cameco on an $80bn nuclear expansion to power the grid and AI data centres.

• Aussie inflation: RBA Bullock provided some hawkish remarks at a speech in London on Tuesday, described the labour market as "a little tight" despite recent unemployment spike, said 0.9% QoQ increase in trimmed mean inflation would be a "material" miss. Pretty much hosed down November rate cut expectations (now just 37% vs. >70% two weeks ago). Will be interesting to see how inflation data goes today.

• IPOs, CSL and Wisetech: Two explorers set to debut around noon. Lots of recent IPOs have all opened around 30 cents (vs. 20 cent IPO offer price). Also keen to see how CSL and Wisetech perform today, both down around 15% on Tuesday.

BROKER MOVES

• Bluescope Steel upgraded to Overweight from Neutral; target up to $24.50 from $24.00 (JPM)

• Sims upgraded to Neutral from Underweight; target up to $15.70 from $14.40 (JPM)

Stocks trading ex-dividend: 

• 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: FFI Holdings (FFI), Perenti (PRN), Shriro (SHM), Turners Automotive Group (TRA)

• Earnings: None

• IPOs: Golden Dragon Mining (DGR) at 11:30 am, Right Resources (RRE) at 12:00 pm

• AGMs: Ansell (ANN), Data#3 (DTL), Dexus (DXS), Ebos (EBO), Nick Scali (NCK)

Economic calendar (AEDT):

• 11:30 am: Australia September Inflation (Ests: 3.1% vs. 3.0% prior)

• 12:45 am: Canada Rate Decision (Ests: 25 bp cut to 2.25%)

• 5:00 am: Fed Rate Decision (Ests: 25 bp cut to 4.0%)