North American Morning Briefing: U.S. Stock Futures Steady as Anthropic Rally Softens

Stock futures pointed to a slightly higher open Tuesday, losing some of

the steam from Monday's session after Anthropic's IPO plans lifted shares.

The filing of the company's IPO paperwork revealed growing revenues, massive losses and immense risk, with the company itself alluding to the possibility its models could cause real-world harm.

As investors continue to digest those implications and keep an eye on Israeli parliamentary elections, the tech-heavy Nasdaq, the S&P 500 and the Dow were in the green ahead of the opening bell.

"The debate has shifted from whether companies will spend on AI to whether those investments can generate attractive returns within a reasonable timeframe. That scrutiny matters after a year in which technology has again accounted for a disproportionate share of the wider market's advance," UniCredit said.

Markets are pricing a relatively mild Federal Reserve hiking cycle through the end of 2027, but the history of previous cycles suggests investors should be cautious about assuming a modest endpoint, according to T. Rowe Price.

"Since 1994, five of six Fed hiking cycles have seen the federal funds rate rise by at least 175 basis points from where the cycle began, highlighting the potential for rates to move further than markets initially expect."

Corporate earnings continue Tuesday with Boeing, Coca-Cola, Visa and United Parcel Service among the companies scheduled to report results.

Economic Insight

Amova Asset Management said U.S. growth is expected to remain resilient, but it has been uneven.

October business surveys continue to indicate strong activity, although September employment growth slowed sharply and the broader distribution of growth across households remains uneven.

"Growth appears to be getting narrower, which is also consistent with tail probabilities of slower growth increasing."

Watch For:

U.S. Durable Goods for September; S&P Cotality Case-Shiller Home Price Index for August, U.S. New Home Sales for September; U.S. Conference Board Consumer Confidence for October; U.S. FOMC meeting

Today's Top Headlines/Must Reads:

- America Needs Canada's Aluminum. Trump's Tariff Exposed Just How Badly.

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MARKET WRAPS Forex:

The dollar rose against a basket of currencies as oil prices rallied due to concerns about continued Middle East fighting.

"Geopolitics remains the focus with market concerns that Trump could consider another round of strikes around or after the mid-terms," Jefferies said.

Sterling fell against the dollar to a one-week low and Commerzbank said the currency was being helped by expectations that the Bank of England will raise interest rates in November.

Bonds:

Treasury yields fell as investors focused on the Fed's monetary policy decision on Wednesday.

Jefferies retains its bullish view on five-year bond yields going into the central bank meetings this week.

"Our view remains of one hike from the Fed and the ECB in December. By the time we come to the March meeting, our base case is that oil prices would have started moving lower and there would be no need to hike anymore."

Energy:

Oil prices rose, reversing earlier falls as traders focused on diplomatic efforts to avert further escalation between the U.S. and Iran.

Metals:

Gold futures fell but prices hovered around $4,000 a troy ounce as investors await the Fed's meeting for more cues on the direction of interest rates.

"Bullion remains under pressure following last week's decline, reflecting elevated Treasury yields and expectations that U.S. interest rates could remain restrictive," Zaye Capital Markets said.

TODAY'S TOP HEADLINES

Anthropic's 'Adjusted' Profit Exposes Wall Street's Earnings Game

There's a flip side to Anthropic's $80.7 billion net loss for the first half of this year. On the other side of the ledger, Amazon.com and Alphabet booked large paper gains on some of the same financing deals.

This tees up a vexing question as Anthropic prepares for an initial public offering as soon as November: Should gains and losses like those count in the alternative earnings metrics widely touted by Wall Street stock analysts?

Novartis Raises Guidance Despite Drug-Trial Setbacks Hitting Profit

Novartis raised its full-year earnings guidance, citing solid sales growth and productivity gains, even as recent clinical-trial setbacks hit the Swiss drugmaker's bottom line in the third quarter.

The company has been grappling with declining revenue from aging medicines that used to rank among its top sellers, such as heart drug Entresto, as it works to roll out new products and to advance studies to seek approval for more.

HSBC Profit Growth Misses, Plans $1 Billion Buyback

HSBC Holdings reported slower-than-expected quarterly profit growth, sending shares lower despite its announcement of a new share buyback of up to $1 billion.

The London-based bank said Tuesday that earnings for the three months ended September were supported by growth in banking net interest income and lower expected credit losses. The year-earlier bottom line was weighed by a $1.1 billion provision for a lawsuit tied to Bernie Madoff's multibillion-dollar Ponzi scheme.

French Consumer Confidence Sinks to 13-Year Low Amid Protests, Bond Selloff

Consumer confidence in France tumbled to its lowest level since June 2013, after nationwide protests and a selloff of government bonds raised questions on the feasibility of the country's fiscal outlook.

The sentiment indicator of around 2,000 households fell to 80 this month from 85 in September, well below its long-term average of 100, France's statistics body Insee said Tuesday.

Eurozone Banks Report Declining Loan Demand, Tougher Conditions

Eurozone banks tightened their conditions for loans to businesses in the three months through September, while demand for credit declined, an indication that the European Central Bank's rate rises are helping to cool activity ahead of a meeting of policymakers.

Publishing the results of a quarterly survey of 159 banks between Sept. 21 and Oct. 6, the ECB said the toughening in criteria for loan approvals was largely driven by the increase in perceived risk as a result of the war between the U.S. and Iran.

China's Industrial Profit Growth Surged in September

China's industrial profit growth surged in September, supported by strong gains in electronics and high-tech manufacturing linked to artificial-intelligence and digital-infrastructure spending.

Profits at China's major industrial firms rose 14.4% from a year earlier in September, accelerating from the 4.2% growth in August. However, data released by the National Bureau of Statistics on Tuesday showed that profits for the January-September period increased 15.5%, slightly lower than the 15.7% rise recorded for the January-August period.

Microsoft Is Trying to Shed a Lot of Workers. Just Don't Call It a Layoff

Microsoft and Skydance are asking swaths of their employees to raise their hands to walk out the door.

The two companies each offered voluntary buyouts to workers Monday, reflecting the pressure companies face to shrink head count as they invest in AI-even if they aren't sure which jobs the technology will eventually replace. At Microsoft, it was the largest voluntary buyout offer in its history, extended to about one quarter of its staff, or 60,000 people.

Netanyahu and His Main Opponent Disagree on Many Things-but Not Israel's Security

TEL AVIV-Israeli Prime Minister Benjamin Netanyahu and the leading opposition candidate, Gadi Eisenkot, couldn't be more different in terms of style, background and a host of issues that matter to Israeli voters.

But on the questions that matter most to the rest of the world-the future of Gaza, the war with Iran and a Palestinian state-the substantive differences between the man who has governed Israel on and off for 19 years and his challenger are narrower.

Court Rejects Trump Administration Bid to Set Aside California Mail-in Ballots

A federal appeals court Monday rejected a Trump administration request to immediately require California to set aside mail-in ballots it receives from 20,000 people the federal government says might not be U.S. citizens.

A panel of the Ninth U.S. Circuit Court of Appeals ruled 2-1 that the Justice Department wasn't entitled to an emergency order segregating the ballots, in a case the DOJ just filed 11 days ago and hasn't yet been considered by a trial judge.

Justice Department Charges James Comey Again

WASHINGTON-The Justice Department is attempting a third prosecution of Trump critic and former FBI director James Comey, this time on allegations that he leaked national-defense information 10 years ago, according to newly unsealed court filings.

Prosecutors allege Comey mishandled national security information in October 2016 that ended up in a New York Times article, according to a charging document made public Monday.

Write to pierre.bertrand@wsj.com

TODAY IN CANADA 3Q Earnings:

Precision Drilling

Trican Well Service

Economic Indicators (ET):

Nothing major scheduled

Stocks to Watch:

Cleveland-Cliffs: Confirms Full Compliance With Stelco Undertakings; Wholly Owned Subsidiary Stelco Delivered a Letter to Canadian Minister of Industry Mélanie Joly Providing Updated Report on Stelco's Compliance With Undertakings in Connection With Cleveland-Cliffs' Acquisition of Stelco

Expected Major Events for Tuesday 00:01/UK: Sep Zoopla House Price Index

00:01/UK: Adzuna UK Job Market Report

00:01/UK: Oct Shop Price Monitor

07:45/FRA: Oct Consumer confidence survey

08:59/JPN: Oct Monthly Economic Report

09:30/UK: Sep Capital issuance statistics

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October 27, 2026 06:16 ET (10:16 GMT)

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