Preview of US Stock Market | The three major stock index futures are mixed, Wall Street debates whether AI stocks are oversold, Qualcomm and Arm both fall after earnings

Pre-market Market Moves 1. On Thursday, November 5, ahead of the U.S. stock market open, the three major U.S. stock index futures were mixed. As of press time, Dow futures were up 0.64%, S&P 500 futures were up 0.20%, and Nasdaq futures were down 0.50%. 2. As of press time, Germany's DAX index was up 0.57%, the UK's FTSE 100 was up 0.76%, France's CAC 40 was up 0.72%, and the Euro Stoxx 50 was up 0.57%. 3. As of press time, WTI crude oil was up 1.03% at $89.03 per barrel; Brent crude oil was up 1.88% at $96.40 per barrel. Market News U.S. layoffs in October fell 71% year over year, the lowest for the same period since 2023. Data from outplacement firm Challenger, Gray & Christmas Inc. showed that U.S. companies announced 43,994 job cuts last month, down 71% from a year earlier. In the same period last year, announced layoffs in October were the highest in more than 20 years. Challenger data showed that U.S. employers also said last month they planned to hire nearly 445,000 people, up 57% year over year and the highest for any October since at least 2009. The increase in hiring plans was driven entirely by staffing demand for the holiday shopping season. U.S. Republicans may launch a vote as early as next week to impeach Defense Secretary Hegseth. According to reports, many U.S. Republican lawmakers and allies blame Defense Secretary Hegseth for election losses. They believe Hegseth played a major role in persuading Trump to attack Iran but had no exit strategy and no plan to manage the inevitable political consequences. At present, Republican leaders and many colleagues are still unwilling to directly blame Trump for their predicament. House Republicans are expected to vote within days on directly impeaching Hegseth. Houthis demand $51 billion, leaving Saudi Arabia facing a difficult choice as it seeks a truce. According to reports, after the Houthis attacked Saudi oil tankers in the Red Sea and seized the throat of the strategic Bab el-Mandeb Strait, Saudi Arabia proactively contacted the Houthis to try to learn what price would be needed to end hostilities through negotiations. The response given was: $51 billion. Strong AI server demand drives Foxconn's October revenue up 46% year over year. Foxconn reported that October revenue rose 46% year over year to NT$1.31 trillion (about $39.7 billion), reflecting continued global AI infrastructure buildout and still-strong market demand for NVIDIA Corporation servers. Analysts said Foxconn is expected to extend its strong growth momentum into the fourth quarter. September revenue rose 38% year over year to a record NT$1.16 trillion, driving third-quarter revenue up 47% to NT$3.03 trillion, beating market expectations by 7%. With Vera Rubin shipments gradually ramping up and favorable IT industry seasonality, Foxconn's growth momentum is expected to continue into the fourth quarter. Wall Street debates whether AI stocks are oversold; Goldman Sachs Group, Inc. says a Democratic victory could actually spur capex. Institutional views diverged on the sharp selloff in AI concept stocks. Goldman Sachs Group, Inc. believes AI stocks have recently been "sold out," valuations have fallen noticeably, and positioning structure has improved after election uncertainty fades, which may instead prompt tech giants to accelerate data center investment earlier to avoid future regulatory changes; JPMorgan warned that doubts about AI financing and commercialization could limit a short-term rebound. At the market level, with the election over, the high volatility reflected by the VIX may be difficult to sustain; if volatility falls quickly, major indices with AI weighting of nearly half could benefit. Market digests midterm election results as U.S. Treasury yields fall to eight-week lows. On Thursday, long-term U.S. Treasury yields fell to eight-week lows as investors believed that a sweeping Democratic victory in the U.S. midterm elections could tighten fiscal constraints, which would benefit the bond market. According to Tradeweb data, U.S. Treasury yields fell across maturities. Among them, 10-year and 30-year Treasury yields touched eight-week lows of 4.837% and 5.229% intraday, respectively, then rebounded slightly but remained lower on the day. The two-year Treasury yield, after falling to a two-month low on Wednesday, was last trading slightly above that low. Individual Stock News Arm (ARM.US) beat expectations on both revenue and net profit, but flat guidance for next quarter sent shares down nearly 4% pre-market. Arm reported results for the latest quarter ended September, with revenue of $1.443 billion, up 27% year over year, and adjusted net profit of $566 million, up 36% year over year, both beating Bloomberg consensus; operating margin was 44.2%, licensing and other revenue was $773 million, up 50% year over year and a record high for the same period, and data center royalties doubled again year over year, becoming a core highlight. However, the company's revenue guidance for next quarter of about $1.47 billion, although above the analyst average estimate of $1.4 billion, fell short of some top estimates of $1.5 billion, and licensing revenue was also slightly below expectations. Guidance that "only slightly beat expectations" disappointed investors, and combined with weak business outlook from customer Qualcomm, Arm fell nearly 4% pre-market. Qualcomm (QCOM.US) Q4 revenue beat expectations but handset chip revenue plunged 26%, sending shares down nearly 9% pre-market. Qualcomm reported after the close on November 4 its fiscal 2026 fourth-quarter results (ended September 27): non-GAAP revenue of $10.442 billion, down 7% year over year, and non-GAAP earnings per share of $2.17, down 28% year over year, both slightly beating Wall Street expectations. By business, handset chip revenue plunged 26% year over year to $5.137 billion, below market expectations and the biggest drag; automotive chip revenue surged 89% year over year to $1.990 billion, a quarterly record, while IoT revenue rose 4%, partly offsetting the handset contraction. What really unsettled the market was guidance: the company expects next-quarter EPS of $2.15-$2.35 (midpoint $2.25 below the expected $2.32) and warned that supply chain costs including wafers, packaging and testing, and memory were "rising across the board," sending the stock down nearly 9% at one point pre-market. AppLovin (APP.US) Q3 revenue and net profit both hit record highs, sending shares up more than 19% pre-market. AppLovin delivered after the close on November 4 a report that beat expectations across the board: third-quarter revenue of $2.185 billion, up 55% year over year; net profit of $1.439 billion, up 72% year over year; adjusted EBITDA of $1.842 billion, up 59% year over year with a margin as high as 84%; revenue, net profit, and adjusted EBITDA all hit quarterly record highs. Strong AI advertising monetization continued to deliver, and the board simultaneously approved an additional $3.2 billion buyback authorization, bringing total buyback authorization to $3.6 billion as of the end of October. With both performance and shareholder returns positive, the stock surged more than 19% pre-market, becoming one of the few bright spots on the AI application side that day. Toyota (TM.US) Q3 operating profit rose 34%, beating expectations; shares rose more than 8% pre-market as guidance was raised. Toyota reported second-quarter (July-September) results, with operating profit surging 34% year over year to JPY1.127 trillion, far exceeding the market expectation of JPY992 billion, marking the first profit increase in six quarters; net profit attributable to shareholders was JPY449.6 billion, up 24% year over year. Growth was mainly driven by strong demand for hybrid vehicles (especially in North America) and favorable foreign exchange effects from a weaker yen; despite a decline in global sales and weakness in China, stable sales in Japan and North America were enough to support profit improvement. The company sharply raised its full-year operating profit forecast to JPY3.9 trillion (from JPY3.4 trillion), expanded its buyback ceiling to JPY1.3 trillion, and resolved to cancel 1.2 billion shares; the stock rose more than 8% pre-market. Sony (SONY.US) Q2 operating profit rose 45%, beating expectations; shares rose nearly 5% pre-market as guidance was raised. Sony reported fiscal 2026 second-quarter results, with operating profit up 45% year over year to JPY622.3 billion (about $39.5 billion), significantly beating market expectations; revenue was JPY3.43 trillion, up 10.3% year over year, and net profit attributable to shareholders was JPY449.6 billion, up 24% year over year. Strong box office for the "Spider-Man" film and a robust gaming business were the main DRIVE. The company also raised its full-year guidance, lifting its operating profit forecast from JPY1.72 trillion to JPY1.87 trillion, raising its net profit forecast to JPY1.33 trillion, and increasing its full-year dividend per share forecast from JPY25 to JPY35 (up 40% year over year). With both performance and returns strong, the stock rose nearly 5% pre-market. Lumentum (LITE.US) reports after the close tonight; the continued boom in optical communications remains to be verified. Lumentum will release third-quarter results after the close on November 5. The market consensus expects revenue of $1.248 billion (up about 138% year over year) and adjusted earnings per share of $4.19 (up about 307% year over year), extending the strong boom. The company's prior-quarter revenue had already risen 109% year over year, with a gross margin of 49.3%; improving order visibility for high-speed optical components and optical circuit switching is the core DRIVE. However, against the backdrop of an overall pre-market pullback in the optical communications sector (Lumentum, Marvell, and others all fell more than 3%), the market will scrutinize its delivery pace and margin resilience, wary of how downstream timing fluctuations could disrupt growth off a high base. IREN (IREN.US) reports after the close tonight, with AI computing power and mining as its two main storylines. IREN will release third-quarter results after the close on November 5. The market expects revenue of $220 million (up about 48% year over year) and earnings per share of -$0.24 (a swing from profit to loss year over year), under US-GAAP accounting. As a representative company transforming from Bitcoin mining to AI computing infrastructure, the company is facing the direct impact of tighter data center regulation after the Democratic victoryits shares already fell more than 10% in the previous trading session. Investors will focus on its AI computing capacity deployment progress, power resource acquisition, and financing capability to judge the certainty of its transformation path amid policy headwinds. Meta (META.US) euro bonds rose above par immediately after listing; EUR62 billion order book set a record. Compiled data showed that all six maturities in Meta's bond sale traded higher on Thursday, with even bid quotes above par. Banks involved in underwriting completed on Wednesday the sale of EUR9 billion (about $10.1 billion) of six-part bonds, with each tranche priced slightly below 100 euros per 100 euros of face value. The price gains followed Meta's record bond sale. The order book for the deal reached EUR62 billion, far exceeding the EUR31 billion record set ten years ago by Anheuser-Busch InBev SA/NV Sponsored ADR. Microsoft Corporation (MSFT.US) rejected a multi-billion-dollar expansion deal with UK AI unicorn Nscale. According to reports, Nscale, the UK's highest-valued AI startup, failed to reach a potential multi-billion-dollar new agreement with Microsoft Corporation, putting new pressure on its plan to achieve a $35 billion listing target. According to three people familiar with the matter, Microsoft Corporation declined to more than double the size of an existing data center computing lease contract for facilities in Texas. That means Nscale must find new customers for the data center or risk losing billions of dollars in future revenue. Apple Inc. (AAPL.US) reportedly cuts internal AI budget. According to reports, Apple Inc. is cutting its budget for employee use of artificial intelligence (AI) as part of cost-reduction measures, even as the company still seeks to place AI at the core of its operations. According to people familiar with the matter, last month Apple Inc. quietly lowered the daily spending cap for some engineers using AI models from $300 to $200. These people said Apple Inc. is now planning further cuts to some engineering teams' budgets, with daily limits potentially as low as $100. Goldman Sachs Group, Inc. and Apollo in talks to sell $40 billion SpaceX (SPCX.US) AI chip financing. People familiar with the matter said the two companies have begun approaching potential buyers for the multi-tranche financing. SpaceX has said the deal structure is designed to keep the debt off SpaceX's balance sheet and is the largest GPU financing arrangement on record. People familiar with the matter said that in some cases investors were asked to buy tranches of up to $500 million before the formal syndication process began in order to complete the deal as quickly as possible. Syndication distribution is planned to launch soon. Key Economic Data and Event Preview 21:30 Beijing time: U.S. initial jobless claims for the week ended October 31 21:50 Beijing time: 2026 FOMC voter and Cleveland Fed President Hammack speaks on stablecoins and safe-haven currency exchange rates 22:10 Beijing time: 2027 FOMC voter and Richmond Fed President Barkin speaks 00:30 Beijing time the next day: 2027 FOMC voter and Chicago Fed President Goolsbee speaks 02:00 Beijing time the next day: ECB President Lagarde and Governing Council member Dolenc speak 05:00 Beijing time the next day: Canadian Finance Minister Champagne releases the federal budget 08:00 Beijing time the next day: 2026 FOMC voter and Dallas Fed President Logan speaks Earnings Preview Friday morning: IREN, Cloudflare (NET.US), Airbnb, Inc. Class A (ABNB.US) Friday pre-market: Moderna (MRNA.US)