Nasdaq-100 futures fell 1.3% and S&P 500 futures 0.5% after Alphabet posted a $9.07 billion cash outflow and a search Revenue miss. US GDP grew 3.4%, Inflation accelerated and Christine Lagarde said she will leave the European Central Bank in February.

1. ECONOMY: GDP Grows 3.4%, September PCE Inflation Reaches 3.6% and Jobless Claims Fall to 194,000 as Brent Eases to $113 on Iran Talks

US gross domestic product grew at a 3.4% annualized rate in the third quarter against 3.1% expected and 2.2% in the second, as private Investment surged 19.4% on the AI build-out. The PCE price index rose 0.5% in September, as expected, taking the annual rate to 3.6% against 3.7% expected, while core PCE rose 3.1% on the year, in line. Yet real consumer spending was flat and real Disposable Income fell 0.3%. Initial jobless claims fell to 194,000 against about 200,000 expected. The Fed, which raised rates in September, held at 3.75% to 4% on Wednesday, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a hike, and traders price an 83% chance of a December hike. Brent Crude fell 1.73% to $113.32 a barrel and West Texas Intermediate 2.06% to $100.66 after reports that Vice President JD Vance reached out to Iran's Security Council chief to restart peace talks, though a senior Iranian official rejected a Qatari proposal and Houthi attacks and possible US strikes after the Nov. 3 midterms remain risks.

  • Fed Chairman Kevin Warsh said "if we had a firm conclusion about the conduct of monetary policy, we'd announce it to much fanfare today," and that the Fed will vote on rates less often from next year.
  • Risk note: one economist said expensive crude is the main driver of above-target inflation, and a settlement could shift the Fed's focus away from more hikes.

2. ALPHABET: Falls 10% to 11% Pre-Market, Heading for Its Worst Post-Earnings Drop, on a $9 Billion Cash Burn and a Search Miss

Alphabet (NASDAQ:GOOGL) fell 10% to 11% pre-market after reporting negative free Cash Flow of $9.07 billion for the third quarter, against the $2.70 billion expected, while holding its 2026 Capital spending forecast at $195 billion to $205 billion. A drop of more than 9.77% on Thursday would be its worst reaction to Earnings since it listed in 2004. Search revenue rose 12% to $63.35 billion but missed the $64.96 billion expected. Cloud revenue more than doubled to nearly $31 billion, and its Backlog reached about $560 billion.

  • Executives blamed currency effects and lower monetization in AI Mode, even as search queries grew at their fastest pace in 5 years.
  • Risk note: analysts warned the results bring fears of AI cannibalizing search "right back to the forefront."

3. MICROSOFT: Rises on 48% Azure Growth While Capex Falls Short, and Neoclouds Slide as GPU Delays Push Capacity Into 2027

Microsoft (NASDAQ:MSFT) rose 2% to 3% pre-market after revenue of $92.28 billion beat $90.69 billion and adjusted earnings of $4.89 per share beat $4.73, with Azure revenue up 48% to $33.2 billion. Capital spending and finance leases of $45.2 billion were below the $50.67 billion expected, and it trimmed its full-year capex forecast to $170 billion from $175 billion. CFO Amy Hood said delays at third-party GPU providers will push some capacity into the first half of 2027. CoreWeave (NASDAQ:CRWV), Nebius (NASDAQ:NBIS), IREN (NASDAQ:IREN) and Oracle (NYSE:ORCL) fell.

  • Hood expects spending to accelerate in the first half of 2027, and Amazon reports after the close.
  • Risk note: neoclouds lack investment-grade ratings and need billions in outside capital, and lenders are pulling back as rates rise.

4. ELI LILLY: Rises 4% as Mounjaro Sales Jump 65% and Revenue Guidance Climbs to $92 Billion, While Profit Guidance Slips on Deal Charges

Eli Lilly (NYSE:LLY) rose about 4% pre-market after adjusted earnings of $7.48 per share beat $6.26 and revenue of $24.40 billion beat $22.61 billion. It raised 2026 revenue guidance to $91 billion to $92 billion from $85 billion to $87 billion, but lowered adjusted profit guidance to $35 to $36 per share from $35.50 to $36.50 on $4.57 per share of deal charges. Mounjaro sales rose 65% to $10.72 billion.

  • Its Foundayo obesity pill, launched in April, took in $184 million against about $229 million expected.
  • Risk note: US realized prices fell 7% after last year's drug pricing deal with the administration, and Novo's rival pill is competing head to head.

5. ECB: Lagarde to Step Down in February, Nearly 9 Months Early, With Knot and Hernández de Cos the Favorites to Succeed Her

ECB President Christine Lagarde will leave on Feb. 7, 2027, nearly 9 months before her term was due to end, and the search for a successor begins at once. Klaas Knot, the former Dutch central bank chief seen as the more hawkish candidate, and Spain's Pablo Hernández de Cos are seen as leading contenders. The ECB is expected to hold rates at its decision later today, even though euro zone inflation reached a 3-year high in September.

  • A Knot appointment "would likely be read as hawkish and could support the euro," one analyst said, while De Cos would signal more continuity.
  • Risk note: France's bond spread over Germany is at its highest since the early 2010s Debt crisis, with a presidential election due next year.

6. PRE-MARKET MOVERS: ServiceNow Falls 20%, Fortinet 25% and Sprouts 23% as Crocs Jumps 18%, DoorDash Buys Instacart and Caterpillar Slides on a Beat

Caterpillar (NYSE:CAT) fell 9% to 12% despite adjusted earnings of $7.20 per share beating $7.08 and a record $78.1 billion backlog, as construction sales slightly missed and its annual sales forecast was unchanged; the shares are down more than 20% since August. ServiceNow (NYSE:NOW) tumbled 20% after adjusted profit of $1 per share missed $1.02. Fortinet (NASDAQ:FTNT) plummeted 25.5% as its gross Margin of 79.6% missed 80.1%, though earnings and revenue beat. Sprouts Farmers Market (NASDAQ:SFM) plunged 23% after earnings, revenue and same-store sales all missed. Crocs (NASDAQ:CROX) surged nearly 18% on an earnings beat and stronger guidance. DoorDash (NASDAQ:DASH) rose 7% after agreeing to buy Instacart parent Maplebear (NASDAQ:CART) in a deal valued at about $17 billion, at $65 per share, a 26% premium to its price before talks leaked and 11% above Wednesday's close. Marvell (NASDAQ:MRVL) fell more than 11% on a report of talks to buy Lumentum (NASDAQ:LITE), which rose 5%. Carvana (NYSE:CVNA) rose 8% after the SEC closed its investigation with no enforcement action, eBay (NASDAQ:EBAY) 6% on 14% revenue growth and raised guidance, and Chipotle (NYSE:CMG) 8%, while Honeywell Aerospace fell 4% despite raising its outlook.

  • Shell (NYSE:SHEL) rose 3% to 4% to an all-time high after adjusted earnings nearly doubled to $10.81 billion against $9.92 billion expected, with a $5 billion buyback.
  • Risk note: the DoorDash deal is not expected to close until the end of 2027 or early 2028, and New York City's consumer protection department has called it a "troubling trend" of consolidation.

7. MARKET SETUP: Nasdaq-100 Futures Fall 1.3%, Samsung Slides Despite Record Profit, Asia Splits and Kalshi Hits a $40 Billion Valuation

Nasdaq-100 futures fell 1.3%, S&P 500 futures 0.5% and Dow futures 171 points, or 0.3%. Samsung Electronics closed 4.13% lower after record third-quarter operating profit of 107.44 trillion won, in line with 107.66 trillion expected, and a 30 trillion won dividend. The Kospi fell 1.24% to 5,937.66 and the Kosdaq 2.34%, while Japan's Nikkei 225 rose 1.10% to 64,659.47 and China's CSI 300 1.03%.

  • Prediction market exchange Kalshi raised $1 billion at a $40 billion valuation, up from $22 billion in May, in a round co-led by Sequoia Capital and Wellington Management.
  • Risk note: two US appeals courts have ruled that states can regulate Kalshi's sports contracts, and a Supreme Court case looks likely.