US stock outlook | Futures of the three major stock indexes plummeted, and oil prices surged by more than 4% SpaceX, Broadcom, and Oracle simultaneously promote chip financing

Pre-market market trends

1. On October 8 (Thursday), the futures of the three major US stock indexes fell sharply before the US stock market. As of press release, Dow futures were down 0.80%, S&P 500 futures were down 0.46%, and NASDAQ futures were down 0.68%.

2. As of press release, the German DAX index fell 1.00%, the UK FTSE 100 index fell 0.21%, the French CAC40 index fell 0.61%, and the European Stoxx 50 index fell 1.04%.

3. As of press release, WTI crude oil rose 4.53% to $92.28 per barrel. Brent crude rose 4.49% to $104.70 per barrel.

Market news

Federal Reserve Governor Waller: There is no need to raise interest rates at consecutive meetings. The bitmap shows that interest rates will be cut after raising interest rates in early 2027. Federal Reserve Governor Waller said that in order to push inflation back to the 2% target, further interest rate hikes are still needed, but there is no need to implement them at consecutive meetings. Waller predicts that the 2027 bitmap may reflect the path of interest rate hikes at the beginning of the year and subsequent interest rate cuts, adding that AI infrastructure investment and energy shocks make inflationary pressure more durable, while the US economy is strengthening in the second half of the year.

Federal Reserve Meeting Minutes: Most officials expect another rate hike before the end of the year. The path to raising interest rates is a prudent move. The minutes of the latest meeting show that Federal Reserve officials are expected to raise interest rates again before the end of this year to curb inflation, which has been higher than the target level for more than five consecutive years. However, the minutes of the meeting did not show when the policymakers expected to raise interest rates; they only showed that continued high prices and a stable labor market may prompt the Federal Reserve to raise interest rates for the second time this year. Discussions at the September meeting showed that officials believed there was a risk that inflation would continue to show stickiness, while the labor market was “close to full employment,” and overall economic growth had also accelerated.

Oil prices rebounded again, and the Houthis attacked Saudi Arabia and the US stopped production in the Gulf of Mexico. Oil prices rose about 4% on Thursday. The reason is that attacks on Saudi Arabia continued to escalate by the Houthis, another attack on an oil tanker in the Persian Gulf, and hurricane “Isaias” (Isaias) approaching the northern coast of the US Gulf of Mexico, leading to an increase in the scale of the shutdown of US offshore oil production.

The risk of French debt is already 38% higher than French corporate debt. France currently has about 215 billion euros (241 billion US dollars) of corporate bonds, and its trading performance has shown a lower risk premium than French government bonds. After a massive sell-off of sovereign debt, this scale has increased almost 18 times since the beginning of 2026. According to the data, as of Wednesday, the yield on about 38% of all high-rated French corporate debt was lower than that of government bonds of the same period. By comparison, the scale at the beginning of the year was only 12 billion euros.

Saudi Arabia plans to allow shipping outside the Strait of Hormuz and consider changing the crude oil pricing benchmark. According to reports, Saudi Arabia is in discussions with customers and plans to provide shipping options other than the Strait of Hormuz in next year's long-term crude oil supply contract, and formally incorporate the temporary transportation arrangements used during Iran's war into the contract mechanism. According to people familiar with the matter, the relevant negotiations are still ongoing and must be completed before the end of this year. People familiar with the matter said that Saudi state-owned oil company Saudi Aramco is still discussing other adjustment measures, including allowing customers to choose different crude oil pricing standards, and even making Saudi Aramco responsible for directly shipping crude oil to Asian customers.

World Meteorological Organization: The El Niño phenomenon is expected to intensify and continue until February 2027. The World Meteorological Organization (WMO) said in its monthly climate bulletin on Thursday that this year's El Niño phenomenon will further intensify before reaching its peak in December, and the probability of continuing until February 2027 is close to 100%, and its intensity may reach at least one of the strongest levels since 1950. Meanwhile, sea surface temperatures are expected to set historic records; the core area of the El Niño phenomenon — the central and eastern waters of the tropical Pacific — sea surface temperatures from October to December are expected to be 3.7 degrees Celsius (6.7 degrees Fahrenheit) above normal.

Trump says he is not interested in reaching an agreement with Iran. US President Trump said he is no longer seeking an agreement with Iran. Earlier, there were reports that the US military is preparing a potential attack on Iran, and the timing may be before the midterm elections. “I don't think this agreement is something I really want to do, but they are willing to offer any conditions in exchange for a truce,” Trump said. He also added that the US Special Envoy for the Middle East, Witkoff, has been working to facilitate this agreement and that “it is progressing very well.”

Individual stock news

Samsung's (SSNLF.US) Q3 operating profit soared 783%. Samsung Electronics announced preliminary results for the third quarter on Thursday. The company's third-quarter operating profit soared 783% from the same period last year, up 20.01% month-on-month, slightly exceeding analysts' expectations. This was mainly due to the strong growth in memory business profits driven by a surge in demand for artificial intelligence chips. According to regulatory documents, the world's largest memory chip manufacturer expects operating profit of 107.4 trillion won (approximately US$80.17 billion) for the July-September quarter, with a market forecast of 106.1 trillion won. This is the fourth consecutive quarter in which Samsung achieved record operating profit; its third-quarter revenue was 195 trillion won, up 127% year on year, and the market expected value was 199 trillion won. Samsung Electronics will release a full performance report later this month.

TSM.US's third-quarter revenue increased 50%. TSMC announced on Thursday that, driven by strong growth in demand for AI applications, third-quarter revenue reached NT$1.49 trillion (US$46.71 billion), a year-on-year increase of 50% and a record high, exceeding market expectations of NT$1.46 trillion. TSMC's strong sales growth solidified market expectations for AI demand. The focus of TSMC's third quarter earnings briefing will focus on the outlook for 2027 and beyond; pricing is also another major focus. There are reports that TSMC's wafer prices may rise 3% to 6% in 2027.

Pepsi (PEP.US) lowered profit expectations, and the recovery of the North American business was slower than expected. Pepsi reported quarterly earnings and revenue on Thursday that both exceeded analysts' expectations, thanks to growth in international business, but its North American business continued to be sluggish. Net profit attributable to the company in the third quarter was US$3.05 billion, down from US$2.6 billion in the same period last year. Excluding special items, the company earned $2.34 per share. Net sales increased 5.6% to $25.27 billion. Organic revenue increased 3.1% this quarter. The company also lowered its full-year profit forecast as difficulties in its local market dragged down profits. PepsiCo currently expects core earnings per share to grow by 2.5% to 3.5%, below the lower limit of the 5% to 7% range previously anticipated. The company now expects net revenue growth of around 6%, at the high end of the previous 4% to 6% forecast range.

SpaceX (SPCX.US), Broadcom (AVGO.US), and Oracle (ORCL.US) are all reaching out to “ask for money.” According to people familiar with the matter, in recent weeks, Broadcom has been arranging more than $50 billion in financing for its project to develop custom artificial intelligence chips in collaboration with OpenAI. People familiar with the matter said that Apollo Global Management (APO.US) and Kuroishi (BX.US) are among the lenders that are negotiating to participate in this financing. Negotiations are currently in the early stages, and the scale of the deal may change. Furthermore, according to people familiar with the matter, Oracle is also in discussions with Apollo and Goldman Sachs (GS.US) to arrange funding for a large-scale chip purchase. Also, according to media reports, SpaceX is also recently seeking to raise 40 billion US dollars to purchase Nvidia (NVDA.US) chips through a financing plan led by Apollo. According to people familiar with the matter, the company plans to raise around $10 billion through bank loans and $30 billion through investment-grade debt to support its large-scale chip orders.

Bezos: Blue Origins or an IPO in the next few years. Jeff Bezos, founder of space company Blue Origin, said the company is likely to conduct an initial public offering (IPO) within the next few years after completing the first round of external financing and raising billions of dollars. Bezos said, “I now have a clearer understanding of Blue Origin's financial prospects. After completing this financing, Blue Origin probably has a reason to become a listed company at some point in the future.” He added that this process could wait “a few years from now.” Bezos said the company recently raised $10 billion from outside investors — and may raise more in the future. He also mentioned that the company plans to test fly its “New Glen” rocket again in December, which is designed to compete with SpaceX's main rocket, Falcon 9.

Solidigm, a subsidiary of SKHY.US (SKHY.US), has reportedly selected Goldman Sachs and Morgan Stanley (MS.US) to take charge of the US IPO. According to sources, Solidigm, a flash memory business subsidiary of SK Hynix, has selected Goldman Sachs and Morgan Stanley to be responsible for next year's US IPO. J.P. Morgan Chase (JPM.US), Citibank (C.US), and UBS (UBS.US) have also been invited to participate in this listing. Solidigm may be listed as early as 2027, with a valuation of up to $100 billion. Relevant discussions are still ongoing, and specific arrangements may be adjusted, and more banks may join.

The US Department of Defense plans to exchange a $1.5 billion loan for Wolfspeed (WOLF.US) up to 7.5% equity warrants. The US Department of Defense provided chipmaker Wolfspeed with a 30-year conditional advanced loan commitment of up to $1.5 billion to support the production of silicon carbide materials and wide bandgap power devices in the US. Under the terms of the deal, which are still being negotiated, Wolfspeed will provide warrants to the US Department of Defense to purchase up to 7.5% of the company's shares in instalments. Wolfspeed filed for bankruptcy in July last year due to key silicon carbide wafer factory production issues. The company said it would use the funds to expand the production of silicon carbide materials and power devices for the telecommunications, aerospace and defense sectors, and upgrade the supply capacity of related materials for military communication systems. As of press time, Wolfspeed's pre-market share price rose more than 11%.

Key economic data and event forecasts

20:15 Beijing time: Bank of England Governor Bailey delivered a speech.

20:30 Beijing time: Number of jobless claims in the US at the beginning of the week ending October 3.

22:00 Beijing time: The final value of the monthly wholesale inventory rate in the US in August.

The next day at 01:00 Beijing time: US 30-year treasury bond auction on October 8.

At 01:40 Beijing time the next day: 2028 FOMC voting committee and St. Louis Federal Reserve Chairman Mussalem delivered a speech.

Performance Forecast

Friday Morning: Delta Air Lines (DAL.US)