Overnight US stocks | The three major indices fell, while Apple Inc. (AAPL.US) rose against the trend. The Philadelphia Semiconductor Index fell more than 11% this week.

Friday saw the three major indices fall while oil prices rose. Federal Reserve Chair Warsh expressed optimism about the strong performance of the US economy. He also said that despite ongoing political shocks related to GEO Group Inc and tightening monetary policy in various countries to curb inflation, the resilience shown by the global economy still surprised him. Warsh stressed that the Fed is clearly committed to achieving price stability, does not favor pre-judging the outcome of policy meetings, and does not advocate pre-disclosing possible policy actions for the remaining meetings in 2026. This week, the Nasdaq fell more than 4% cumulatively, its worst weekly performance since the tariff turmoil in April 2025. The Philadelphia Semiconductor Index fell 11.4% this week, the longest losing streak since the 2008 financial crisis. This was also the fifth time this year that the index has seen a pullback of at least 10%, wiping out about $2 trillion in market value. [US Stocks] As of the close, the Dow Jones Industrial Average fell 175.99 points, or 0.34%, to 52,001.70; the S&P 500 fell 84.64 points, or 1.09%, to 7,659.42; the Nasdaq Composite fell 572.99 points, or 2.14%, to 26,140.03. Apple Inc. (AAPL.US) rose 0.43% against the trend, Coreweave (CRWV.US) fell 11.91%, SK Hynix (SKHY.US) fell 6.58%, Arm (ARM.US) fell 6.94%, SanDisk (SNDK.US) fell 6.85%, Oracle Corporation (ORCL.US) fell 4.64%, and Tesla, Inc. (TSLA.US) fell 2.13%. The Nasdaq Golden Dragon China Index fell 1.3%, Baidu Inc Sponsored ADR Class A (BIDU.US) fell 2.93%, and Alibaba Group Holding Limited Sponsored ADR (BABA.US) fell 1.83%. [European Stocks] Germany's DAX30 rose 241.93 points, or 0.95%, to 25,624.55; the UK's FTSE 100 rose 37.62 points, or 0.35%, to 10,877.97; France's CAC40 rose 22.00 points, or 0.28%, to 7,956.70; the Euro Stoxx 50 rose 35.29 points, or 0.57%, to 6,203.55; Spain's IBEX35 rose 137.29 points, or 0.72%, to 19,314.99; Italy's FTSE MIB rose 453.95 points, or 0.92%, to 49,851.50. [Forex] The US dollar index, which measures the greenback against six major currencies, fell 0.21% on the day and closed at 101.837 in late foreign exchange trading. As of late New York trading, 1 euro traded at 1.1233 dollars, up from 1.1212 dollars the previous trading day; 1 pound traded at 1.3319 dollars, up from 1.3272 dollars the previous trading day. 1 dollar traded at 158.05 yen, down from 158.14 yen the previous trading day; 1 dollar traded at 0.8242 Swiss francs, down from 0.8271 Swiss francs the previous trading day; 1 dollar traded at 1.4153 Canadian dollars, down from 1.4190 Canadian dollars the previous trading day; 1 dollar traded at 9.9192 Swedish kronor, down from 9.9597 Swedish kronor the previous trading day. [Cryptocurrencies] Bitcoin rose 0.82% to $81,681 as of publication. Ethereum fell 1.3% to $2,421. [Precious Metals] Spot gold fell 0.1% to $4,165.94 per ounce; spot silver fell 0.77% to $56.986 per ounce. [Crude Oil] Light crude futures for November delivery on the New York Mercantile Exchange rose $3.44 to settle at $101.41 per barrel, a gain of 3.51%; London Brent crude futures for December delivery rose $3.94 to settle at $109.86 per barrel, a gain of 3.72%. [Macro News] US fiscal deficit for fiscal year 2026 reached $1.99 trillion, a five-year high. Data released by the US Treasury on October 16 showed that in fiscal year 2026, which ended September 30, the US fiscal deficit widened by $217 billion year over year to $1.99 trillion, the highest level since fiscal year 2021 and the third-largest annual fiscal deficit in history. In fiscal year 2026, US federal revenue reached a record $5.40 trillion, up 3% year over year; federal spending reached a record $7.40 trillion, up 6% year over year. Among that, debt service costs rose 12% year over year to a record $1.36 trillion. In addition, the US Supreme Court previously ruled against most tariffs implemented by the Trump administration, resulting in $145 billion in tariff refunds in fiscal year 2026, with net tariff revenue falling 11% year over year to about $173 billion. The US Treasury estimated that the fiscal deficit for fiscal year 2026 was 6.2% of GDP, up from 5.8% in the previous fiscal year. The fiscal deficit for September alone was $27 billion, compared with a surplus of $198 billion in the same period last year. Trump: Oil prices will fall soon; hopes the Russia-Ukraine conflict ends. US President Trump made the latest remarks on Russia-Ukraine and the Middle East: "I know some details about the Russia-Ukraine conflict. At some point I will release them. I hope it ends. The Biden administration did a lot of bad things on the Ukraine issue." When asked about inflation, Trump again claimed: "Oil prices will fall soon. Israel has helped Saudi Arabia a great deal, and the Abraham Accords are once again an issue for Saudi Arabia." US Treasury does not signal a reduction in long-term Treasury issuance; US Treasury yields rise. According to reports, the US Treasury did not clearly hint that it would cut the size of long-term Treasury auctions, pushing long-term US Treasury yields slightly higher. Ahead of the quarterly refunding announcement on November 4, the US Treasury sought opinions from Treasury dealers on how auction sizes should be adjusted given future borrowing needs and investor demand. However, the Treasury did not further release a clear signal that it may reduce long-term Treasury issuance in the near term. Previously, some investors expected that, given the Trump administration's desire to push down US Treasury yields, the Treasury might consider reducing the supply of long-term Treasuries. Jensen Huang: AI will bring transformation, and the current market turmoil will eventually pass. NVIDIA Corporation (NVDA.US) CEO Jensen Huang said at an event in Berlin that the current AI market turmoil will eventually pass for a simple reason: AI will bring transformation and have a very positive impact on every industry and every country. There is no doubt that AI development will continue to advance, and we are still in the early stages of this process. Huang said that recent market news has been changing repeatedly, but this will not change the industry's fundamentals. Large-scale hardware investment will ultimately pay off and ease market unease. Regarding the recent selloff in AI chip and infrastructure stocks, as investors worry that AI investment spending may not be sustainable amid rising borrowing costs, Huang remains optimistic about the AI market and its impact on the broader economy. Huang said investors should focus on first principles and fundamentals and maintain attention to long-term value. [Company News] AWS CFO: AI spending is sustainable; server investment payback period is less than three years. According to reports, John Felton, chief financial officer of Amazon.com, Inc.'s (AMZN.US) cloud unit (AWS), said AI infrastructure and service spending is sustainable because related investment is driving substantive innovation. Felton said AWS's AI capital expenditure is generating returns, and companies should view AI as a tool to improve productivity, not just as a means to cut costs. Felton also said that as of the second quarter, AWS's order backlog was close to $500 billion, with customers ranging from large enterprises and AI labs to small and medium-sized businesses, so he is "comfortable" with the company's capital expenditure arrangements and stressed: "Demand is real." He also said that AWS's AI server investment payback period is less than three years. On whether AI investment can continue to generate returns, Felton said AWS internal data shows an "approximately linear relationship" between token usage and productivity gains. AWS is currently achieving "significant return on investment and productivity gains" and plans to further expand related investment. Bank of America Corp plans to issue up to four tranches of investment-grade bonds, with the longest maturity at 11 years. Bank of America Corp (BAC.US) has launched an investment-grade bond offering, becoming the third major Wall Street bank this week to enter the turbulent bond market for financing after reporting third-quarter results. According to a person directly familiar with the matter, Bank of America Corp is marketing up to four bond tranches with maturities ranging from 3 to 11 years. Among them, the longest-dated tranche was initially priced at about 1.2 percentage points above US Treasuries. The rare Friday debt sale comes as several companies have postponed high-grade bond issuance in recent days. Volatility in US Treasury yields, driven by stronger-than-expected inflation data and market concerns about AI trades, prompted companies to pause financing plans. Bank of America Corp is the only one of the six major Wall Street banks that did not enter the bond market for financing in the third quarter, raising only $17 billion so far this year, the least among the six major banks. Its most recent bond sale was in April this year, when it raised $10 billion. Apple Inc. iPhone Duo quickly sold out after pre-orders opened; some orders are expected to be delivered in December or even later. Just minutes after pre-orders opened on Friday for Apple Inc.'s (AAPL.US) first foldable phone, the iPhone Duo, estimated shipping times were already pushed to December or even later. The rapid extension of shipping times indicates that strong demand and severely constrained supply may make the $1,999 device difficult to buy on the official launch day of October 23 and for some time afterward. Apple Inc.'s online store showed that estimated shipping times had been delayed for both color options and all storage capacity versions of the iPhone Duo, covering all configurations from 256GB to 2TB. Some pre-order users said that even after preselecting color and storage capacity in advance as Apple Inc. recommended to speed up the purchase process, they still encountered delivery date delays. In-store inventory for the iPhone Duo on launch day at Apple Inc. retail stores also sold out almost instantly after pre-orders opened at 8 a.m. New York time. This is Apple Inc.'s first foldable device. By contrast, when Apple Inc. launched the iPhone 18 Pro and Pro Max in September, consumers who ordered in time were generally able to buy them smoothly, while securing the iPhone Duo this time was noticeably more difficult. Market research firm Counterpoint Research estimated last month that Apple Inc. will sell about 6 million iPhone Duo units this year. [Major Bank Ratings] Wedbush: Cut Netflix (NFLX.US) price target from $105 to $90 Wells Fargo & Company: Cut Western Digital Corporation (WDC.US) price target from $730 to $450 STONEX: Raised Microsoft Corporation (MSFT.US) price target from $525 to $600