Wall Street stocks were muted on Tuesday as big banks reported mixed earnings. The S&P 500 ended flat while Nasdaq closed slightly lower due to chip weakness. Investors now look ahead to Wednesday’s crucial inflation report. Many analysts expect year-on-year S&P 500 earnings growth of 30.6% for the July-September period.
NEW YORK, Oct 13 (Reuters) - Wall Street stocks were muted on Tuesday after big banks reported mixed earnings and investors looked ahead to Wednesday's crucial inflation report. The S&P 500 ended essentially flat, while Nasdaq closed slightly lower, weighed by chip weakness.
Third-quarter earnings optimism has been propping up the market, helping it soldier through geopolitical turmoil, surging bond yields and mounting inflation worries. Analysts currently expect year-on-year S&P 500 earnings growth of 30.6% for the July-September period, according to LSEG data.
Sign up here.
I will go into more detail on today's market moves below. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
Today's Key Market Moves
Today's Talking Points
* Anthropic warns AI models may soon self-replicate without access to data centers
Anthropic said on Monday that its experiments suggest small AI models could be months away from self-replicating on internet-enabled items such as smart ovens and TV boxes.
The experiments were aimed at determining whether AI models could find and copy themselves into vulnerable devices, then continue to spread.
Replicating models would be difficult to shut down, as there is no central switch-off, and unlike non-AI malware, they could figure out unfamiliar devices on their own, potentially targeting data center processors, Anthropic warned.
* A Democratic rout in November could lead to greater scrutiny of Wall Street, crypto firms
Should the US midterm election give Democrats control of one or both congressional chambers, the party could gain subpoena power, and powerful tools to probe Wall Street, prediction markets and cryptocurrency companies.
Polls suggest Democrats are poised to win the House of Representatives and have an edge in the race for the Senate. If the party prevails, it could call agency heads and CEOs to testify, and create headaches and legal entanglements for those under scrutiny.
Democrats are already preparing to investigate President Donald Trump's and his family's ties to crypto and prediction markets, Reuters reported.
* Iran is currently reviewing the US response to its Hormuz proposal, will respond once review is complete
Tehran is still reviewing Washington's proposal regarding the reopening of the Strait of Hormuz and will respond to it via intermediaries when the review is over, according to Iran's foreign ministry spokesperson Esmaeil Baghaei.
After a June interim ceasefire fell apart, Iran presented its proposal in mid-September and later confirmed receipt of a US response. But Iran’s security chief said on Sunday that Washington’s response did not sufficiently address Tehran’s seven conditions for reopening the Strait of Hormuz and returning to negotiations.
* AI may be rocket fuel for US stocks, less so for GDP
Wall Street is not the economy, so we are told. Nowhere is this clearer than the AI revolution, which is firing US stocks to record highs while, simultaneously, weighing on real gross domestic product growth.
Demand for all the equipment that goes into building US AI data centers and infrastructure is surging, but much of it is directed toward imports. This is widening the trade deficit, which, in turn, is a drag on growth; not enough to slow the economy to a halt, but enough to ensure it doesn't accelerate too fast.
What could move markets tomorrow?
Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here.
Editing by Nia Williams
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.