Overnight US stocks | AI earnings concerns resurface, Nasdaq falls over 1%, Micron Technology, Inc. (MU.US) drops over 4%

Thursday saw the three major indices close mixed, with the Nasdaq falling over 1%. Reports said OpenAI's annualized revenue was $20 billion lower than previously reported, pressuring tech stocks. St. Louis Fed President Musalem said the Fed needs to raise rates again to bring inflation back to its 2% target. [US Stocks] At the close, the Dow Jones Industrial Average rose 52.61 points, or 0.10%, to 51,232.48; the S&P 500 fell 36.35 points, or 0.47%, to 7,765.42; the Nasdaq Composite fell 345.35 points, or 1.25%, to 27,193.34. NVIDIA Corporation (NVDA.US) fell nearly 3%, while SpaceX (SPCX.US), Micron Technology, Inc. (MU.US), and SK Hynix (SKHY.US) dropped over 4%, and Oracle Corporation (ORCL.US) and Intel Corporation (INTC.US) fell over 5%. The Nasdaq Golden Dragon China Index declined 0.62%. [European Stocks] Germany's DAX30 fell 303.00 points, or 1.21%, to 24,801.36; the UK's FTSE 100 fell 23.16 points, or 0.22%, to 10,435.34; France's CAC40 fell 39.52 points, or 0.51%, to 7,729.69; the Euro Stoxx 50 fell 55.94 points, or 0.91%, to 6,124.35; Spain's IBEX35 fell 194.89 points, or 1.02%, to 18,923.11; Italy's FTSE MIB fell 693.75 points, or 1.39%, to 49,278.50. [Asia-Pacific Stocks] Japan's Nikkei 225 fell 1.42%, South Korea's KOSPI fell 2.62%, and Indonesia's Composite Index fell 1.88%. [Forex] The US Dollar Index, which measures the greenback against six major currencies, fell 0.1% on the day to close at 102.138 in late New York trading. As of late New York trading, 1 euro traded at $1.1209, up from $1.1199 the previous session; 1 pound traded at $1.3225, up from $1.3219 the previous session. 1 dollar traded at 157.86 yen, down from 157.96 yen the previous session; 1 dollar traded at 0.8316 Swiss francs, down from 0.8330 Swiss francs the previous session; 1 dollar traded at 1.4224 Canadian dollars, down from 1.4256 Canadian dollars the previous session; 1 dollar traded at 9.9757 Swedish kronor, down from 9.9992 Swedish kronor the previous session. [Cryptocurrencies] Bitcoin briefly fell below the $81,000 mark and was at $80,311.94 as of publication; Ethereum fell 3.5% to $2,479. [Precious Metals] Spot gold was at $4,133.67/oz; spot silver was at $59.187/oz. [Crude Oil] Light crude futures for November delivery on the New York Mercantile Exchange rose $3.21 to settle at $91.49 per barrel, a gain of 3.64%; London Brent crude futures for December delivery rose $4.08 to settle at $104.28 per barrel, a gain of 4.07%. [Macro News] Fed's Musalem: Further rate hikes may be needed within the next 6 to 9 months. St. Louis Fed President Musalem said the Fed needs to raise rates again to bring inflation back to its 2% target. He said monetary policy needs to be tightened further to achieve the inflation target in a "timely" manner. Musalem said that if "timely" means about 18 months, then rates may need to be raised further at an appropriate time within the next 6 to 9 months. He said inflation remains the main problem facing the US economy, but with strong growth and a stable job market, the Fed may be able to lower inflation without significantly harming employment. Asked whether the Fed should raise rates at its October 27-28 meeting, Musalem said he remains open-minded and has not prejudged the outcome, but the inflation situation requires policymakers to continue considering further tightening. Musalem said that despite the notable rise in US Treasury yields, financial conditions remain loose and supportive of economic growth. He said the rise in yields does not mean investors have lost confidence in the Fed, but rather reflects market expectations of higher real rates and increased competition for capital in a strong economic environment. US estimated FY2026 federal budget deficit at $2 trillion. On October 8 local time, according to Congressional Budget Office estimates, the US federal government's total budget deficit for fiscal year 2026 is $2 trillion, $218 billion higher than the FY2025 deficit. Estimates show that during FY2026, revenues will increase by $169 billion (a 3% increase), while spending will increase by about $386 billion (a 6% increase). The spending growth mainly comes from net debt interest, major benefit programs, defense, and education; revenue growth is mainly driven by increases in individual income taxes and payroll taxes. OpenAI's annualized revenue $20 billion lower than previously reported. According to reports, OpenAI recently disclosed to investors that its annualized revenue was close to $50 billion as of the end of September, notably lower than the $70 billion reported by this newspaper and other media at the end of last month. People familiar with the matter said the discrepancy stems from investors trying to directly compare OpenAI's annualized revenue with that of competitor Anthropic, but the two companies use different accounting methods: Anthropic includes sales revenue generated through cloud partners such as AWS and Alphabet Inc. Class C cloud in its revenue, while OpenAI does not use this approach. Previously, investors adjusted OpenAI's revenue methodology to arrive at a figure of $40 billion in annualized revenue for August, and then combined that with information disclosed by the company to investors that revenue growth exceeded 70% to calculate $70 billion. OpenAI declined to comment. US 30-year mortgage rate rises to 7.4%, a near three-year high. According to Freddie Mac data, the average rate on the US 30-year fixed mortgage rose to 7.4% from 7.28% last week, the seventh consecutive weekly increase, the first time in three years that such a long streak has occurred, with the rate level hitting a new high since November 2023, compared with 6.3% a year earlier. High home prices combined with rising borrowing costs are further intensifying US housing affordability pressure. Assuming a 20% down payment, buying a $500,000 home at the current rate would add about $172 to the monthly principal and interest payment compared with four weeks ago, while buying a $1 million home would add about $345. As fixed rates continue to climb, more borrowers are turning to adjustable-rate loans with lower initial rates, and the share of adjustable-rate mortgages rose to 12.2% in early October, a four-year high. ING: ECB's September rate hike had broad support, but another hike in October is unlikely. ING Groep NV Sponsored ADR (ING) economist Carsten Brzeski said in a report that the minutes of the ECB's September monetary policy meeting showed that the rate hike decision that month had broad support. However, Brzeski noted that the internal discussion was actually more balanced than ECB President Lagarde suggested in her post-meeting remarks, meaning another ECB rate hike in October is unlikely. Some officials believed the energy shock may last less long than previously assumed, while others questioned the claim that the European economy has shown resilience to the energy shock. At the same time, persistently rising bond yields further reinforced the view of some officials that there is no need to keep raising rates. Brzeski added: "With the bond market doing the ECB's work of tightening financial conditions, some officials may be less inclined to keep raising rates than they were at the September meeting." [Company News] SpaceX acquires low-band spectrum, targeting US wireless carriers. SpaceX (SPCX.US) announced Thursday that it has reached an agreement to acquire a nationwide portfolio of low-band spectrum licenses, which will allow it to compete directly with traditional wireless communications giants across the United States. While Starlink Mobile's existing global 2 GHz mid-band spectrum will provide high-bandwidth capacity, this new spectrum will allow its signal to penetrate obstacles. The move accelerates Musk's ambition to bypass traditional wireless infrastructure and deliver cellular connectivity directly to smartphones from Earth orbit. The transaction involves acquiring 100% of the nationwide 800 MHz spectrum portfolio held by private equity firm Grain Management and still requires regulatory approval from the US Federal Communications Commission (FCC). In addition, the FCC this week approved Starlink Mobile's second-generation satellite constellation application, authorizing SpaceX to launch 15,000 satellites optimized for the 2 GHz band worldwide. After the news was announced, US telecom company shares fell in after-hours trading, while SpaceX (SPCX.O) shares rose more than 1.7%. Apple Inc. officially announces October 13 smart home product launch event. Apple Inc. (AAPL.US) announced it will hold a product launch event themed "Welcome home" in New York on October 13 local time, unveiling multiple smart home devices, including a smart home hub with an approximately 6-inch square screen, an upgraded Apple TV 4K set-top box, and a new HomePod mini speaker. All new products will support Apple Inc.'s latest Siri artificial intelligence features. Among them, the smart home hub can recognize different family members through a built-in camera and voice recognition, provide personalized content, and also integrate Calendar, Messages, Photos, FaceTime, and other apps. In addition, Apple Inc. is working with LG Electronics to develop accessories such as smart doorbells, thermostats, and indoor security cameras to further expand its smart home ecosystem. [Major Bank Ratings] UBS Group AG: Raises Chevron Corporation (CVX.US) price target from $220 to $235