Key insights
- S&P 500 futures edged higher as investors awaited U.S. CPI data and bank earnings. JPMorgan Chase and Goldman Sachs saw shares dip following reports of lower fixed-income trading revenue. Citigroup was the worst performer in the KBW Banks Index. Lingering questions around AI labs like OpenAI and Anthropic also weighed on sentiment, though major AI hyperscalers outperformed due to their reliance on operating cash flow.
Investing.com - S&P 500 futures inched higher on Wednesday, while Nasdaq futures hovered below the flatline, as investors geared up for the release of key U.S. inflation data and a fresh batch of large bank earnings.
By 05:37 ET (09:37 GMT), S&P 500 futures had ticked up by 14 points, or 0.2%, while Nasdaq futures had edged down by 22 points, or 0.1%. Dow futures, meanwhile, gained 217 points, or 0.4%.
The main averages on Wall Street finished lower in the prior session, weighed down in part by lingering questions around the financial status of frontier artificial intelligence labs like OpenAI and Anthropic. However, major AI hyperscalers outperformed, with analysts at Vital Knowledge highlighting that these massive technology companies are more likely to fund their ambitions through operating cash flow, a potentially soothing notion as jitters surround a glut of debt-fueled financing deals across the AI industry.
"Our main issue with AI isn’t the technology’s utility or the outlook for token growth but instead OpenAI and Anthropic specifically and whether they can come public on the timelines and at the valuations anticipated by bulls," the Vital Knowledge analysts wrote in a note.
According to media reports, Anthropic, the company behind the popular Claude chatbot, is planning to disclose its third-quarter financial results for the first time later today.
Meanwhile, traders were parsing through an initial batch of bank returns. Shares of JPMorgan Chase, the largest U.S. bank, edged down following an unexpected drop in fixed-income trading revenue, while peer Goldman Sachs also ticked lower after its fixed-income revenue missed relative to estimates. Citigroup was the worst performer on the sector-tracking KBW Banks Index, falling by 5.6%.
The marquee event on the economic calendar today will be the unveiling of the monthly U.S. consumer price index, a closely-watched inflation metric.
Overall consumer price growth is expected to have accelerated last month, underlining the inflationary impact of a surge in energy prices and potentially factoring into the trajectory of Federal Reserve monetary policy over the rest of the year.
In the twelve months to September, consumer price growth is tipped to have accelerated to 3.6% from 3.4% previously. Month-on-month, the figure is speeding up to 0.6% from 0.4%.
"This report is likely to be a strong one given the run-up in energy prices over September," analysts at Deutsche Bank said in a note, adding that their economists expect that motor fuel prices soared by 0.6% over the month.
So-called "core" CPI, which strips out volatile items like food and fuel, is projected to stand at 2.5%, up slightly from 2.4% in August. On a monthly basis, the number is expected to slow to 0.2% from 0.3%.
Alternative data compiler Truflation predicted that the "gap between headline and core is widening," as stubbornly elevated energy prices due to an expanding Middle East conflict and aggressive U.S. trade policies threaten renewed goods inflation.
Elsewhere, another host of Wall Street lenders are due to report their quarterly results.
Bank of America posted a fall in third-quarter profit, weighed down by a decision to set aside $1.2 billion in provisions in response to U.S. fines over failures to detect possible illicit activity. Shares slipped in premarket trading.
BlackRock, on the other hand, notched an increase in profit for the period, buoyed by an uptick in fees for managing client funds. The stock rose before the opening bell.
The Vital Knowledge analysts said that third-quarter returns from big banks have not necessarily been "bad," with the numbers appearing to satisfy most expectations, aside from softness in fixed-income trading. However, they flagged a "fear that conditions now are as good as they will get for the industry."
Beyond banks, ASML once again lifted its annual outlook, as the Dutch semiconductor equipment provider gave a rosy picture of soaring AI demand. The company even suggested that clients, which include makers of high-end AI chips, are locking in orders for as far away as 2030. Shares of ASML climbed by more than 1% in European trading.
(Ayushman Ojha contributed reporting)
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