Stocks stabilize as Apple earnings approach, oil declines

By Wayne Cole

SYDNEY, Nov 2 (Reuters) – Asian stock markets steadied on Monday as investors hoped Apple’s results later in the day would provide some relief to concerns over AI’s cash burn, while oil prices fell after negotiations continued between Iranian and Qatari mediators.

Apple has been an oasis of “relative calm given that it isn’t spending billions on data centers, and its shares have soared for four straight months to help it unseat Nvidia” as the world’s most valuable publicly traded company.

Analysts expect quarterly earnings per share (EPS) of $2 on revenue of $113 billion, compared to $1.85 in the same period last year. The company could also provide some insight into early sales of the iPhone 18, with pre-orders beginning in mid-October.

This optimism helped S&P 500 futures advance 0.4%, while Nasdaq futures rebounded 0.8%. The tech-heavy Nasdaq lost nearly 7% in October, its worst month since the “Liberation Day” tariff rout of April 2025.

Upbeat news is badly needed after concerns about negative cash flow and the scale of AI investments caused the cost of corporate default insurance to skyrocket last week.

Intel’s nearly 29% fall on Friday also raised the stakes for other chip groups, including ‌AMD.

An additional issue is the U.S. midterm elections, where a Democratic victory in one or both chambers could lead to more political hurdles for data centers.

Analysts at Goldman Sachs expect investments by hyperscalers to nearly double to $800 billion this year, and rise further to $1.2 trillion in 2027. At the same time, they forecast that the S&P 500’s EPS growth of nearly 30% in 2026 will slow to 18% next year.

“The results underscored the fundamental challenge facing equity investors: Earnings growth is strong, but it is no longer accelerating,” Ben Snider, chief U.S. equity strategist at Goldman, wrote in a note.

“Similarly, the third quarter results support our view that AI capital spending will continue to grow, but that the growth rate of AI investments is peaking.”

The Binance withdrawals added to the unease as the world’s largest cryptocurrency exchange was brought back online on Sunday after hackers stole billions of dollars from the platform last week.

Japan’s Nikkei fell 0.1%, but off its early lows, while South Korea added 0.8%, after losing 16% last month. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2%.

In Europe, EUROSTOXX 50 and DAX futures both firmed 0.1%, while FTSE futures were flat.

MORE RATE INCREASES TO COME

The decline in stocks last month provided some respite for safe-haven bonds as investors wondered whether a sustained stock market selloff could deter the Federal Reserve from raising interest rates in December.

Futures still imply a 72% chance of a quarter-point rate hike, but now only factor in 55 basis points of total tightening, down from more than 70 basis points a month ago.

Yields on the 10-year Treasury note climbed as high as 4.941%, but remained well below their October high of 5.3645%, while 2-year yields stood at 4.612%.

Among the central banks meeting this week, markets are banking on rate hikes from the Reserve Bank of Australia, the Bank of England and the Riksbank, while the Bank of Norway appears on hold.

Economic data due this week includes the influential US ISM manufacturing survey for October later on Monday, while the all-important payrolls report will be released on Friday.

Median forecasts call for an increase of 65,000 jobs, following September’s disappointing gain of 29,000, with the unemployment rate remaining at 4.2%.

In the foreign exchange markets, major currencies were largely sidelined while all the action was focused on stocks. The euro firmed slightly to $1.1169, while the dollar was barely changed at 157.75 yen.

For commodities, oil prices fell as negotiations continued toward a deal to end the U.S.-Israeli war with Iran, even though oil tankers were “still under attack in the Gulf.”

Brent crude futures fell 2.0% to $111.15 a barrel, although that followed a 13.6% jump in October, while U.S. crude futures fell 2.3% to $101.73 a barrel. (OR)

Unearned gold rebounded 0.9% to $3,911 an ounce, after falling 6.8% last month as some investors had to sell to cover margin calls on stocks. (GOL/)

(Reporting by Wayne Cole; Editing by Shri Navaratnam and Muralikumar Anantharaman)