NQ Rebounds After Worst Session Since June, ISM and Apple in Focus

Key Takeaways

• NQ rebounds after its worst session since June. The Nasdaq-100 lost 3.46% on Friday, closing at 28,384.85. Intraday, it fell to 28,093.24 and was therefore briefly in correction territory. The semiconductor index (SOX) plunged 7.2%. At midday, Nasdaq-100 futures are up between 0.6% and 0.8% (December NQ is around 28,720). This rebound remains small compared with Friday's decline.
• Oil retreats on hopes of a deal with Iran. Brent is down 3.3% at $109.66, after topping $114 on Friday. WTI is down 3.3% at $100.64. Qatar-mediated negotiations are underway to end the US-Israeli war against Iran. Less imported inflation is direct support for growth stocks.
• ISM Manufacturing at 4:00 p.m. Paris time: forecast 54.5, previous 54.5. The number to watch is the prices paid index (77.5 expected after 77.9). The market is pricing about a 71% chance of a Fed rate hike on December 9 (CME FedWatch).
• Apple (AAPL) reports tonight. The forecast calls for EPS of $2.00 and revenue of $113.46B. It is the world's largest market cap, ahead of Nvidia (NVDA), and this is the first call with John Ternus as CEO. Palantir (PLTR) and Vertex (VRTX) also report tonight.
• Midterm elections tomorrow. Polls show Democrats favored for the House of Representatives, while the Senate remains too close to call. The market fears a Democratic win in both chambers (higher corporate taxes, stricter AI regulation), which is holding back risk appetite.

Overnight and Europe

On Wall Street Friday, the massive selloff in AI-related stocks worsened:

• S&P 500: -1.82% at 7,580.07;
• Nasdaq Composite: -2.86% at 25,437;
• Dow Jones: -1.09%.

Intel (INTC) lost 28.6%, its worst session in more than 45 years. For the month, the Nasdaq Composite fell about 5.2%, its worst month since March 2025.

In Asia, the session was mixed:

• the Nikkei slipped 0.1% to 63,218, held back by tech;
• the Hang Seng gained 0.6% to 23,437;
• the Shanghai Composite rose 1.2% to 3,641, despite China's official manufacturing PMI dropping back to 49.3 (vs. 50.1).

The People's Bank of China and the Chinese securities regulator were set to convene financial institutions to discuss market support. Korea's Kospi jumped 2.3%, driven by SK Hynix (+4.2%), Nvidia's HBM memory supplier. In Taiwan, TSMC, the foundry for Apple, Nvidia and AMD (AMD), fell 1.5%. The recovery in Asian semiconductors is therefore partial and uneven.

In Europe, the open was hesitant: CAC 40 and DAX at -0.2%. Indices then recovered thanks to lower oil:

• Euro Stoxx 50: about +0.4% near 6,156 in late morning;
• CAC 40 and DAX: about +0.1%;
• Stoxx 600 technology sector: +0.4%.

On Friday, the Euro Stoxx 50 had lost 1.23% and the DAX 0.85%, while the CAC 40 finished flat. ASML (ASML), a Nasdaq-100 member, had dropped 6.1%.

What changed since Friday: no new strikes over the weekend, oil down 3% and yields stable. The market is looking for a technical floor ahead of Apple.

Today's Calendar

How to read the ISM. The Fed is in a hiking cycle, so good news on activity is bad news for NQ:

• ISM above 55 with prices paid above 78: the December hike moves closer to certainty, the 2-year and 10-year yields rise, and richly valued stocks (semiconductors, software) suffer. The morning rebound could fade.
• ISM below 54 with prices paid falling: hike expectations ease somewhat, which supports tech. The effect stays limited as long as oil is above $100.
• Magnitude to keep in mind: options are pricing a move of about 0.85% for the S&P 500 today.

Fed and Rates

The latest decision. On October 28, the Fed held rates at 3.75%–4.00%, after raising rates in September (first hike since 2023). The vote was 10 to 2: Lisa Cook, governor, and Beth Hammack, president of the Cleveland Fed, wanted an immediate hike. Fed Chair Kevin Warsh made no promises for December: he says he does not believe in "forward guidance," except in a crisis.

Friday's speeches:

• Alberto Musalem, president of the St. Louis Fed, believes another hike will be necessary, and soon;
• Lorie Logan, president of the Dallas Fed, wants at least two more 25 basis point hikes.

Today: Austan Goolsbee, president of the Chicago Fed, hosts a Q&A session at 5:15 p.m. with Andréa Maechler, Deputy General Manager of the Bank for International Settlements (BIS), at a conference on central clearing. The topic is not monetary policy. However, Goolsbee warned in mid-October that the AI investment boom risked overheating the economy. A remark on inflation could move rates. Beth Hammack and Thomas Barkin, president of the Richmond Fed, speak Thursday.

Probabilities (CME FedWatch): about 71% chance of a 25 basis point hike on December 9. Overnight index swaps (OIS) show 73%.

Yields: the 2-year is around 4.60%, slightly higher. The 10-year is at 4.93%, nearly unchanged and close to its seven-week low. Rate volatility (MOVE index) is above 100. A 10-year staying below 5% is the minimum condition for the tech rebound to hold.

Earnings

No Nasdaq-100 company had reported by midday. The market is still digesting last week's reports, released Thursday evening and punished Friday.

Last week's reports:

• Intel (INTC), Thursday evening: EPS beat, revenue in line. Fourth-quarter guidance disappointed, due to PC sales held back by memory costs. The stock lost 28.6% Friday. This is what sent the SOX down 7.2%: memory costs weigh on PC and consumer device makers.
• Amazon (AMZN): EPS and revenue below expectations, despite strong AWS growth. Higher capex is weighing on free cash flow. The stock fell 1.4% Friday.
• Alphabet (GOOGL): revenue and earnings below expectations, and AI is reducing search monetization. The stock plunged 13%.

Apple is the test of the day. The stock has risen four months in a row and is slightly lower ahead of the session. Apple has served as a safe haven because it is not spending billions on data centers. As one of the two largest weights in the index, the impact on NQ will be mechanical:

• gross margin: it is hit by component costs, the same factor that hurt Intel;
• holiday guidance: a warning would shake the last pillar of tech.

Palantir serves as a barometer for AI-related software, after a previous quarter with +93% growth. A 12% move in a stock of this size in the index would have a meaningful impact on NQ in the overnight session.

Coming up this week: AMD (AMD) Tuesday evening, crucial for semiconductors, then Qualcomm (QCOM) Wednesday.

Geopolitics and Conflicts

US and Israel vs. Iran: the Strait of Hormuz

Players: United States, Israel, Iran, with Qatar as mediator. The conflict has lasted seven months.

Latest developments:

• Qatari and Iranian officials met for the third straight day;
• Iranian diplomats mention reopening Hormuz within two days if Washington meets several conditions, but say no direct talks are taking place with the United States;
• Donald Trump has pledged not to strike again before the vote, but could resume strikes the day after the elections;
• Tehran is threatening retaliation;
• ships have been attacked near the strait.

Market channel: energy, then inflation and long-term rates. A breakdown in talks would send Brent back above $114 and weigh on NQ through rates.

US midterm elections (Tuesday, November 3)

Democrats are favored for the House, the Senate is a toss-up. Implied volatility shows a bump on expirations covering the elections, jobs and inflation (CPI). Channel: corporate taxation and AI regulation, which directly affect mega-caps.

China: industrial slowdown

The official manufacturing PMI is at 49.3 and business confidence is at a seven-month low. The Standing Committee of the National People's Congress meets November 2 to 6. Channel: demand for semiconductors and Apple.

France: budget strain

New protests are feared. The 10-year OAT-Bund spread widened by about 9 basis points, to 165. Channel: the euro and European risk, with a marginal effect on NQ.

Oil and Commodities

Oil:

• Brent: -3.3% at $109.66;
• WTI: -3.3% at $100.64.

OPEC+ left its production targets unchanged through the end of December.

Gold: +1% at $3,915, after a one-year low Friday. Gold lost 6.8% in October, a sign that the market expects higher rates for longer and is not seeking a safe haven.

Impact on NQ: a barrel above $100 feeds ISM prices paid and Fed hike expectations. Each further drop in crude eases long-term rates a bit, on which growth stock valuations depend. Brent moving below $105 would be favorable for tech, a return above $114 would hurt it.

Dollar and Volatility

Dollar:

• DXY: around 101.8, slightly lower;
• EUR/USD: +0.37% at 1.1199;
• USD/JPY: 157.7.

The dollar is no longer really playing its safe-haven role. When the shock comes from US equities, the dollar and stocks tend to fall together.

Volatility:

• VIX: closed at 19.42 Friday (+12.9%); the front-month future is at 19.45;
• curve: the front end of the curve remains inverted;
• skew: elevated, at 149.8;
• Nasdaq volatility (VXN): it led the rise Friday, with the semiconductor selloff.

Read: the market is nervous but not panicking. Hedges remain expensive ahead of Apple and the elections, which means wide swings in both directions.

Watch Points for the Session

1. 1:00 p.m.: Marriott earnings. A consumer indicator, little impact on the index.
2. 3:30 p.m.: open. The semiconductor rebound needs to hold (Nvidia, Micron (MU), Intel). If Intel does not participate in the rebound, the sector's malaise is not resolved.
3. 4:00 p.m.: ISM. An index above 55 with prices paid above 78 would invalidate the morning's positive tone, with the 10-year climbing back toward 5%. A softer number would extend the rebound.
4. 5:15 p.m.: Austan Goolsbee. Watch for comments on AI-driven inflation.
5. Ongoing: headlines on Hormuz and Qatar. Brent is the best leading indicator for NQ today.
6. Around 10:00–11:00 p.m.: Apple, Palantir and Vertex. Apple's gross margin and guidance will decide the overnight session.
7. Tonight, 4:30 a.m.: the Reserve Bank of Australia (RBA), expected to raise rates (87% probability), then the midterm elections, which could cause a gap at Wednesday's open.