AI relief lifts Nasdaq futures as Europe builds gains on a data-light morning

• US (Tuesday's close): The Dow finished 1.02% higher at 52,495.88 and the S&P 500 rose 0.28% to 7,712.57. The Nasdaq Composite ended flat (-0.02%), so the rally went round big tech. Futures are the only live read on today: S&P 500 contracts are up 0.27% and Nasdaq 100 futures 0.57%, which puts tech back in front.
• Europe (mid-session): Gains have built through the day. The DAX is up 1.01%, the Euro Stoxx 50 1.06% and the CAC 40 0.76%. The FTSE 100 lags at +0.15%.
• Asia (closed): The Kospi ended 3.29% higher, Taiwan 1.28% and the Nikkei 0.85%. China went the other way: the Hang Seng fell 0.90% and the Shanghai Composite 0.60%.

With no US data to trade, the setup belongs to earnings and the AI trade. Super Micro's better-than-expected results and SpaceX's quarter, in which its AI business brought in $7.6bn of $14.6bn revenue, have eased the fear of overspending on AI infrastructure. That fear knocked the Kospi down nearly 4% on Tuesday. Today Samsung Electronics and SK hynix each rose more than 5%, foreign buyers returned, and SpaceX traded up as much as 8% before the bell. This is why Nasdaq futures are leading after the composite stalled yesterday. Netflix is the drag on tech, down as much as 7% pre-market after it guided fourth-quarter revenue below estimates and cut its advertising outlook.

China's weakness has a specific cause. CATL closed 12.03% lower after third-quarter profit grew 14.5% while revenue rose 58.6%. Three things squeezed margins: a shift towards lower-margin energy-storage batteries, a new 2% consumption tax on lithium batteries and smaller export VAT rebates. JPMorgan also downgraded the Hong Kong shares.

Europe's move is harder to pin down. Morning reports had the region close to flat, and no domestic catalyst explains the afternoon gains. It looks like Europe is following the firmer US futures and the better AI tone rather than news of its own. Brent crude is barely changed at $108.66 after US–Iran talk headlines whipsawed it this week. It is still up nearly 79% this year, which keeps inflation risk and long-dated yields high.

Equity nerves are contained: the VIX is at 17.15, down 0.16 points. The strain is in rates. The MOVE index of Treasury volatility ended Tuesday at 101.7, up 25% over the past month. PrimerIQ's US breadth was strong yesterday, with 4,019 advancers against 1,952 decliners, a 2.06 ratio. But the sector spread showed a rotation, not a melt-up: health care (XLV) gained 2.37% while technology (XLK) slipped 0.28%. Havens are quiet. Gold is flat at $4,145 and 25.8% below its 52-week high, and the dollar index is off 0.05%. The 10-year Treasury yield is down 2.1bp at 5.10%. That still matters for growth stocks, because a higher yield shrinks today's value of profits expected years out.

Nothing of consequence printed at 08:30 ET today. The morning's main release was the UK's September CPI at 07:00 BST. Headline inflation came in hotter than expected at 3.5%, and core services inflation reached 3.7%, which strengthened expectations of a Bank of England rate rise in November. Sterling is up 0.70% at $1.3401 and EUR/GBP is down 0.51%. That helps explain why the FTSE 100 lags: a stronger pound reduces the sterling value of its constituents' overseas earnings. Some of the pound's strength also reflects a softer dollar.

Still to come: EIA crude inventories at 10:30 ET, then a 20-year Treasury auction at 13:00 ET (the last one priced at 5.42%). Fed Governor Christopher Waller has said he is open to further tightening if the data warrants it, ahead of the FOMC meeting on 27–28 October. Weekly jobless claims follow on Thursday at 08:30 ET.

Elevance Health produced the standout pre-market result: adjusted EPS of $6.99 against roughly $4.70 expected, and full-year guidance raised to at least $29 from at least $27. The shares were about 1.8% higher before the open. Philip Morris beat on earnings and revenue but fell about 2.5%, after warning that energy-related costs would push operating income growth towards the middle or lower half of its 7–9% range. Moody's was the main miss, with EPS of $4.14 against $4.25 expected.