Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq slip as OpenAI revenue report sinks chip stocks

In a nutshell:

• Major US benchmarks closed mostly lower as big chipmakers like Nvidia (-2.9%), Micron (-4.8%) and Broadcom (-4.3%) led the losses, while the Dow made a small gain

• OpenAI sparked a chipmaker selloff when it was reported the company told investors its annualised revenue is nearing $50bn, about $20bn below figures reported last month, reviving doubts over returns on the AI buildout: the Philadelphia Semiconductor Index (SOX) lost 3.4%

• Trump ruled out attacking Iran before the 3 November midterms, trimming an oil rally fuelled by record Hormuz tanker attacks and Gulf of Mexico storm shut-ins

Let's dive in.

• Major US benchmarks mixed but off their worst levels after a midday chip selloff, sparked by the FT’s report on OpenAI’s revenue

  The Philadelphia Semiconductor Index (SOX), which tracks 30 of the largest US-listed chip designers, manufacturers and equipment makers, fell 3.4% after the news, with big names like Nvidia (-2.9%), Micron (-4.8%) and Broadcom (-4.3%) among the decliners

• S&P 500 Equal Weight index finished 0.6% higher, showing the losses in the cap-weighted S&P 500 were concentrated in its largest names

• The US 2-year bond yield continued its three day pull back, falling 1 bp to 4.75%, now down 3.5% since 28 September, the 30-year yield also pulled back from its 24 highs by 6bps to 5.6%

• The FT reported OpenAI told investors its annualised revenue is nearing $50bn, about $20bn below the $70bn widely reported last month (FT)

• Brent rose 2.5% to $103 a barrel, adding to a near 9% rise since 29 September, as Iran stepped up tanker attacks in the Strait of Hormuz and Hurricane Isaias shut about 500,000 barrels a day of Gulf of Mexico output, though Trump’s remarks on Iran trimmed the gains (CNBC)

• Macquarie strategists warned nearly every major financial blowup of the past 50 years has followed rapid moves in long-term bond yields (YF)

• Chipotle jumped 6% and Starbucks fell as much as 6.7%, its biggest intraday drop in over a year, after the FT reported Starbucks has worked with advisers on a takeover proposal for the burrito chain previously led by CEO Brian Niccol (BBG)

• PepsiCo Q3: revenue up 5.6% to $25.27bn, beat ests by ~1%, core EPS $2.34 beat by ~2%, cut FY26 core EPS growth outlook to 2.5-3% from the low end of 5-7%, with CEO Ramon Laguarta flagging urgency to lift North America performance (YF)

• Amazon job cuts hit nearly 1,000, citing the company has "adjusted parts of its store business...to better enable us to deliver on our priorities." (YF)

• Palantir jumped in early trade after Goldman Sachs upgraded the stock to Buy from Neutral with a $230 target, citing a shift to sovereign AI that could expand its addressable market (YF)

• Trump said on Truth Social the US will not attack Iran before the 3 November midterms and is holding productive talks with Tehran, after saying late Wednesday renewed strikes were under consideration (CNBC)

• Energy prices eased after Trump’s Iran comments, cooling a rally in long-dated Treasury yields from multi-decade highs, while consumer defensive and payments stocks including Walmart, Visa and Mastercard rebounded (TE)

• Oil traders are increasingly tuning out Trump’s Iran rhetoric and reacting to evidence of physical supply and cargo-flow changes, with Again Capital’s John Kilduff likening the market to geopolitical roulette (BBG)

• UKMTO said a tanker was struck by multiple projectiles north of Qatar with casualties, as weekly attacks on Hormuz shipping hit their highest level since the US-Iran conflict began (YF)

• New York Fed researchers found tariffs added 2.9 percentage points to inflation across 67 goods categories by February, and prices for those items would have fallen without the levies (CNBC)

• St Louis Fed President said more monetary policy firming will be required to return inflation to 2% in a timely manner, but he has not prejudged the late-October meeting (RT)

• ECB accounts of the September meeting showed all policymakers saw inflation risks skewed higher, though Slovenia’s Primoz Dolenc said stable core inflation shows broader price pressures remain contained (RT)

• BoE Chief Economist said central banks must stay focused on fighting inflation as global bond yields rise, after he was among three MPC members who voted for a September hike (RT)

• BoE policymaker Megan Greene said UK employers look on course to raise pay by around 3.5% next year, more than would help return inflation to the 2% target (RT)

• US initial jobless claims fell 2,000 to 197,000 in the week to 3 October, continuing claims up 17,000 to 1.71m (YF)

• German exports fell 0.8% month-on-month in August versus a forecast 0.6% rise, with shipments to the US down 6.3% (RT)

• CSL to move all current US plasma centres onto Haemonetics' NexSys platform by end-2027, sending Haemonetics shares up 12% (YF)

• Guzman y Gomez reports Q1 FY27 network sales of $387.5m, up 18.8% on the pcp, with comp sales up 7.1% against 4.0% a year ago and three new Australian openings taking the network to 286. Reaffirms FY27 guidance of mid-single digit comp growth and underlying EBITDA of 6.7-6.9% of network sales from 6.2%, and extends the buyback by up to a further $100m beyond its 23 October end date (GYG)

Kerry here! Energy, Staples and Banks caught a bid on Wall Street. Though local miners are in for another challenging session.

• Energy back in the spotlight: Oil is turning higher again, with Brent up ~8.5% since 29-Sep. The ASX 200 Energy index has climbed 3.3% from its 1-Oct low and reclaimed its 50-day moving average on Thursday. The S&P 500 Energy sector rallied 2.9% overnight and now sits within 1% of its 15-Sep record. US diesel futures surged 5.6% after a relatively shallow 10% pullback in recent weeks and are back within 3% of their own 15-Sep record. That puts classic energy names like Woodside and Santos, refiners Viva and Ampol, and possibly coal names back in focus

• Miners not so much: Miners kept struggling overnight despite a softer US dollar and mostly lower yields. Gold miners were the exception, up 1.5% after a 3% dip in the prior session. Copper staged a sharp reversal, rallying as much as 1.9% intraday to US$6.80/lb before finishing 1.2% lower at US$6.59/lb. The early pop may have been driven by China's return from its week-long National Day holiday and a strike at Antofagasta's Centinela project in Chile. Chinese lithium carbonate futures followed a similar path, rallying as much as ~4.5% on Thursday before closing 1.2% lower at 117,300 yuan a tonne. The Global X Copper Miners ETF fell 1.6% overnight and the VanEck Rare Earths/Strategic Metals ETF lost 2.1%

Stocks trading ex-dividend: 

• Fri 9 Oct: EQT Holdings (EQT) – $0.20

• Mon 12 Oct: Civmec (CVL) – $0.035, Washington H. Soul Pattinson (SOL) – $0.63

• Tue 13 Oct: Perenti (PRN) – $0.045, Star Combo Pharma (S66) – $0.003

• Wed 14 Oct: United Overseas Australia (UOS) – $0.02

• Thu 15 Oct: Acorn Capital Investment Fund (ACQ) – $0.035, Australian Foundation Investment Company (AFI) – $0.092, Cobram Estate Olives (CBO) – $0.045, Fat Prophets Global Contrarian Fund (FPC) – $0.03, Horizon Oil (HZN) – $0.01, K&S Corporation (KSC) – $0.06, Rivco Australia (RIV) – $0.018, WAM Research (WAX) – $0.05

Other ASX corporate actions today:       

• Dividends paid: AUB Group (AUB), Bisalloy Steel Group (BIS), Capricorn Metals (CMM), Fleetwood (FWD), Genesis Energy (GNE), Lindsay Australia (LAU), SGH (SGH), WiseTech Global (WTC), Wiseway Group (WWG)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 10:30 pm: Canadian unemployment rate