Microsoft, however, gained almost 4% after it posted strong cash flow and encouraging cloud growth. Microsoft's earnings have joined the growing list of announcements rekindling investors' appetite for artificial intelligence. Other entries on that list this week include Anthropic's plans to go public, SK Hynix's results and Oracle's pledge not to increase spending beyond the figures already announced. The contrast weighed on Nasdaq futures, which were down 1% this morning, with software and semiconductor stocks also under pressure, especially Fortinet and ServiceNow.

As expected, the Fed kept its benchmark interest rate at 3.75% to 4%, although the decision was less unanimous than anticipated. Two policymakers, Lisa Cook and Beth Hammack, favored another 25-basis-point hike. The central bank also painted a relatively upbeat picture of the US economy, highlighting resilient consumer spending, strong business investment and stable unemployment. Inflation, however, remains too high for the Fed's comfort, leaving the door open to further monetary tightening. Investors initially welcomed Kevin Warsh's comments before tempering their enthusiasm as he reiterated his determination to bring inflation back to 2%.

Kevin Warsh defended a rather paradoxical decision on Wednesday: the US economy is picking up speed and inflation remains stubbornly above 2%, yet the Federal Reserve has chosen to keep interest rates unchanged at 3.75% to 4%. Speaking to reporters, the Fed chair justified the pause by arguing that policymakers needed time to assess the impact of September's rate hike. He said incoming economic data would help determine whether another increase was necessary.

Yet the economic picture he painted was hardly that of an economy running out of steam. Consumer spending remains robust, business investment is now expanding beyond the technology sector, and the labour market continues to show resilience. On inflation, Warsh pointed out that it had been above the Fed's target for nearly six years and that the recent rise in energy prices could make the central bank's job even more difficult.

The Fed chair nevertheless stressed that monetary tightening was beginning to have an impact, with financial conditions becoming tighter and investors growing more selective about where they put their money. He acknowledged, however, that it was still too early to describe financial conditions as genuinely restrictive. That distinction suggests the central bank still has room to act, although Warsh was careful not to signal whether another rate hike might come in December.

Today's PCE data confirmed the persistence of inflation, although the figures were in line with expectations. The September PCE price index rose 0.5% month over month, while core PCE increased 0.3%, both matching forecasts. Meanwhile, US GDP grew at an annualized rate of 3.4% in the third quarter, beating expectations of 3.2% and highlighting the resilience of the US economy despite persistent price pressures.

He also announced that, starting in 2027, one of the Fed's eight annual meetings would be devoted entirely to monetary policy strategy, with no vote on interest rates. The Fed therefore intends to give itself more time to think, but certainly not to shy away from taking action if inflation persists.

In Asia, Samsung was down 5% this morning after reporting spectacular results that nevertheless fell short of expectations, alongside plans to increase investment. The shares suffered particularly by comparison with the more dazzling figures released the previous day by domestic rival SK Hynix.

The ECB has just released its decision and left rates unchanged, as expected. Here, I'll borrow the crystal-clear explanation offered by the excellent Bruno Cavalier, chief economist at Oddo BHF, who notes that "at the ECB, the sharp rise in long-term interest rates has changed the monetary policy debate in two respects. First, it has resulted in a significant tightening of financial conditions. In that sense, the increase can be seen as a substitute for the monetary tightening the ECB had intended to pursue. Second, the bond market correction in France has had some undesirable spillover effects on its neighbors. The ECB has no reason to intervene to 'save' France, particularly ahead of the elections, but at the same time it must prevent fragmentation within the euro area."

To round things off, today's session will feature plenty of earnings , including  Eli Lilly, Mastercard, Merck & Co, Caterpillar, Amazon and Intel.

Today's economic highlights:

On today's agenda: consumer confidence in Japan; unemployment rate in Italy; in the United Kingdom, BoE consumer credit, mortgage approvals, and mortgage lending; in Spain, consumer confidence and business confidence; in the Euro Area, economic sentiment, ECB interest rate decision, deposit facility rate, and ECB press conference; in the United States, initial jobless claims, core PCE price index MoM, GDP price index QoQ Adv, PCE price index YoY, GDP growth rate QoQ Adv, personal income MoM, and personal spending MoM. See the full calendar here.

  • Dollar index: 102.278
  • Gold: $4,025
  • Crude Oil (BRENT): $110.05 (WTI) $100.90
  • United States 10 years: 5%
  • BITCOIN: $80,055

In corporate news:

  • Alphabet's Q3 results miss estimates as capital spending more than doubles.
  • Eli Lilly's third-quarter revenue climbs on demand for Mounjaro and Zepbound.
  • Mastercard's Q3 2026 profit rises on growth in its payment network and services.
  • Merck's Q3 revenue rises, driven by Keytruda, Winrevair and Gardasil outperformance.
  • Caterpillar beats quarterly profit estimates and maintains its annual growth forecast, posting Q3 revenue of USD 20.68 billion, slightly below the
  • FactSet consensus of USD 20.76 billion.
  • Linde's adjusted earnings and revenue rise in Q3 as the group updates its adjusted EPS outlook for Q4 and 2026.
  • GE Vernova posts strong third-quarter results and raises its guidance, driven by demand for power infrastructure.
  • Restaurant Brands International's Q3 profit and revenue rise as Burger King promotions draw diners.
  • Bristol-Myers Squibb's Q3 adjusted earnings decline while revenue rises, and the group updates its 2026 outlook.
  • Altria raises its earnings outlook as Q3 profit and revenue rise.
  • Trane Technologies grows Q3 adjusted earnings and revenue and maintains its 2026 EPS outlook.
  • DoorDash strikes a USD 17 billion deal to acquire US rival Instacart and posts Q3 revenue of USD 4.62 billion, above the FactSet consensus of USD 4.56 billion.
  • Cheniere reports a rise in third-quarter net income.
  • L3Harris Technologies posts higher Q3 earnings and revenue, sets a record backlog of USD 53.2 billion and raises its 2026 guidance.
  • D.R. Horton reports lower fiscal Q4 earnings and revenue and issues its fiscal 2027 outlook.
  • Cognizant's Q3 adjusted earnings and revenue rise as the group narrows its 2026 guidance.
  • Entegris reports Q3 net sales of USD 1,006 million and adjusted diluted EPS of USD 1.23, well above the FactSet consensus of USD 1.03.
  • Textron raises its 2026 adjusted EPS guidance as Q3 adjusted earnings and revenue increase.
  • Baxter International posts Q3 adjusted EPS of USD 0.58, above the FactSet estimate of USD 0.52, and raises its 2026 outlook after a 5% rise in Q3 sales to USD 2.98 billion.

Major companies reporting today

Analyst Recommendations:

  • Boston Scientific Corporation: Jefferies downgrades to hold from buy and reduces the target price from USD 60 to USD 46.
  • Hilton Worldwide Holdings: Mizuho Securities upgrades to outperform from neutral and raises the target price from USD 329 to USD 421.
  • Kla Corporation: CTBC Securities Investment Service Co LTD upgrades to buy from add and raises the target price from USD 210 to USD 226.
  • V.f. Corporation: BNP Paribas upgrades to neutral from underperform and raises the target price from USD 13 to USD 16.
  • Wintrust Financial Corporation: UBS upgrades to buy from neutral and raises the target price from USD 160 to USD 180.
  • Xylem Inc.: Barclays downgrades to Equal Weight from Overweight and reduces the target price from USD 139 to USD 104.
  • Aurora Innovation, Inc.: Needham maintains its buy recommendation and reduces the target price from USD 13 to USD 10.
  • Ebay Inc.: Evercore ISI maintains its in-line rating and raises the target price from USD 96 to USD 120.
  • Fortinet, Inc.: BMO Capital Markets maintains its market perform rating and reduces the target price from USD 185 to USD 145.
  • Glaukos Corporation: Needham maintains its buy recommendation and raises the target price from USD 201 to USD 251.
  • Icon Public Limited Company: Deutsche Bank maintains its buy recommendation and raises the target price from USD 200 to USD 250.
  • Microsoft Corporation: Huatai Research maintains its buy recommendation and raises the target price from USD 506.88 to USD 653.40.
  • Servicenow, Inc.: Baird maintains its outperform rating and raises the target price from USD 125 to USD 185.
  • Sprouts Farmers Market, Inc.: Barclays maintains its overweight rating and reduces the target price from USD 100 to USD 65.
  • Veeva Systems Inc.: Mizuho Securities maintains its outperform rating and raises the target price from USD 280 to USD 345.