Get ready for a dynamic trading day as key economic data and corporate earnings take center stage. Investors are closely watching inflation indicators like the PCE price index and keeping an eye on potential Federal Reserve rate decisions. Major companies including Microsoft, Alphabet, Caterpillar, and Rivian are releasing earnings, potentially causing significant market shifts.
AI Debt, Fed Signals, and Earnings Watch: What's Moving Markets Thursday
Get ready for a pivotal trading session as Wall Street gears up for a barrage of economic data and corporate news. Thursday's market movements will likely be shaped by insights into AI debt sustainability, potential Federal Reserve rate hikes, and the latest earnings reports from tech giants and industrial heavyweights.
Economic Data on Deck
Traders will be closely monitoring key economic indicators expected Thursday morning. Initial jobless claims are forecast to come in around 200,000. Personal income is projected to rise by 0.3% in September, with consumer spending expected to increase by 0.6%. Crucially, the Personal Consumption Expenditures (PCE) price index, a key inflation gauge for the Federal Reserve, is anticipated to show a 0.5% monthly increase and a 3.7% year-over-year rise.
Big Voices on Bonds and Interest Rates
The Federal Reserve's next move remains a central theme. Treasury Secretary Scott Bessent addressed AI debt, stating it's "not problematic at all" given the growing infrastructure and continued financing. However, Jeffrey Gundlach of DoubleLine offered a contrasting view, warning that the market might not accept current ratings on AI-adjacent businesses, drawing parallels to the subprime mortgage crisis. Gundlach also fueled the debate on interest rates, suggesting a December rate hike is the "base case.". Bond yields saw little movement, with the 10-year Treasury yield closing at 5%.
- 10-year Treasury yield: 5.00%
- 2-year yield: 4.691%
- 1-year yield: 4.482%
- 6-month yield: 4.334%
- 3-month yield: 4.109%
- 1-month yield: 3.98%
High-yield corporate bond ETFs are showing significant dividend yields:
- iShares iBoxx High Yield Corporate Bond ETF (HYG): 6.06%
- iShares 0-5 Year High Yield Corporate Bond ETF (SHYG): 7.13%
- State Street SPDR Bloomberg High Yield Bond ETF (JNK): 6.79%
- Fidelity Corporate Bond ETF (FCOR): 4.8%
Earnings Previews and After-Hours Movers
Several major companies are under the spotlight:
- Caterpillar (CAT): Despite a 15% drop in its stock over three months and being down 33.5% from its June high, Caterpillar shares have surged 36% over the past year, partly driven by demand for AI data center construction. The company will report live on 'Squawk Box'.
- Merck (MRK): Shares are up nearly 7% in three months, though down 10% from its August high. Merck is also scheduled for an appearance on 'Squawk Box'.
- Microsoft (MSFT): The tech giant exceeded expectations for both revenue and profit in its fiscal first quarter, leading to a 3% after-hours stock gain. However, news of lower-than-expected capital expenditures ("neoclouds" spending less) caused some concern, with related stocks like CoreWeave, Nebius, and Iren seeing after-hours declines.
- Alphabet (GOOGL): The internet behemoth missed third-quarter estimates, causing its shares to plummet about 10% in extended trading. The stock is now down 21% from its May high.
- Chipotle (CMG): Despite missing earnings expectations, the popular burrito chain reported rising same-store sales. CEO Scott Boatwright expressed confidence in their strategy, and shares rose 7% after hours. The stock is down 30% from its January 2026 high.
- Rivian (RIVN): The electric truck maker is set to report its earnings Thursday afternoon. Shares have fallen 30% in three months and are down 50% from their December high.
- Amazon (AMZN) and Intel (INTC): Both companies will report on 'Closing Bell: Overtime' Thursday. Amazon is up 10% over three months but down 11% from its August high. Intel is also up 10% in three months but has dropped 33% from its June high.
