(Reuters) - Japanese investors sold overseas assets for a third straight week through Oct. 26, cashing in on the yen's sharp decline amid U.S. election uncertainties and reduced expectations of big Federal Reserve rate cuts.

According to the Ministry of Finance data, Japanese investors sold foreign stocks and long-term bonds worth a net 397.6 billion yen and 889.6 billion yen ($5.81 billion), respectively, posting their third straight weekly net sales in both segments. They, however, added a net 116.5 billion yen worth of short-term bills.

While the yen rallied in the September quarter, prompting Japanese investors to acquire foreign assets, it has lost about 6.4% against the dollar this month, creating profit-taking opportunities for Japanese market participants.

The yen reached a three-month low this week after the ruling coalition lost its parliamentary majority, and is on track for its seventh sharpest monthly decline ever and the largest since November 2016.

Last quarter, Japanese investors bought approximately 2.02 trillion yen in stocks and 5.11 trillion yen in long-term bonds. However, they have sold around 667 billion yen in equities and 1.19 trillion yen in long-term debt securities so far this month.

In parallel, foreign net purchases of Japanese stocks fell to a five-week low of 8 billion yen last week, as investors exercised caution due to the election in Japan.

Foreigners, meanwhile, snapped up a net 277.9 billion yen worth of long-term Japanese bonds, registering their fourth weekly net purchase in five. They, however, sold 682.6 billion yen worth of short-term instruments.

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The U.S. Treasury Department said on Wednesday it does not anticipate increasing auction sizes for notes and bonds for at least the next several quarters, in line with market expectations, as it announced a $125 billion refunding from November 2024 to January 2025.

The department will refund about $116.4 billion of privately held Treasury notes and bonds maturing on Nov. 15 to raise new cash of $8.6 billion from private investors.

The Treasury will sell $58 billion in U.S. three-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds next week. These were the same auction sizes for the same securities announced at the July refunding.

"The refunding was pretty much close to our expectations. There could have been a small tweak to the guidance because 'at least for the next several quarters' is quite open to interpretation," said Angelo Manolatos, a macro strategist at Wells Fargo Securities.

"To us, we think that the Treasury is well-funded to meet its borrowing needs and current auction sizes are sufficient until November 2025, a time when we think the Treasury can increase them."

The U.S. Treasury said on Monday it plans to borrow $546 billion in the fourth quarter, $19 billion less than the July estimate, and another $823 billion in the first quarter of 2025. It assumes an end-December cash balance of $700 billion and an end-March cash balance of $850 billion.

Treasury Assistant Secretary for Financial Markets Joshua Frost, in a briefing following the refunding statement, said the borrowing plans for the quarter assume that Congress approves a "timely" increase or suspension in the debt ceiling. The current extension, approved in June 2023, expires on Dec. 31.

Members of the Treasury Borrowing Advisory Committee (TBAC), who met with the U.S. Treasury before the refunding announcement, expressed concern about the borrowings for 2025 and 2026. Minutes of the meeting showed that primary dealer estimates for the next two fiscal years were marginally higher than the previous forecasts.

The Treasury said on Wednesday it believes current auction sizes leave it "well-positioned" to address potential changes to the fiscal outlook and to the pace and duration of future redemptions in the Federal Reserve System Open Market Account (SOMA).

The account is managed by the U.S. central bank and contains assets acquired through operations in the open market.

The Treasury said it intends to address potential changes to the fiscal outlook in borrowing needs over the next quarter through changes in regular bill auction sizes and cash management bills.

TIPS AUCTION SIZES TO INCREASE

Auction sizes will moderately increase for Treasury Inflation-Protected Securities, the Treasury said.

"Given the intermediate- to long-term borrowing outlook and the structural balance of supply and demand for TIPS, Treasury believes it would be prudent to continue with incremental increases to TIPS auction sizes in order to maintain a stable share of TIPS as a percentage of total marketable debt outstanding."

The Treasury plans to maintain the November 10-year TIPS reopening auction size at $17 billion, increase the December five-year TIPS reopening auction size by $1 billion to $22 billion, and raise the January 10-year TIPS new issue auction size by $1 billion to $20 billion.

This was the overwhelming recommendation of primary dealers, the TBAC minutes showed. While demand for TIPS, especially from retail investors, had weakened as inflation has cooled, almost all dealers felt the market could absorb additional supply, the minutes added.

By Hyunjoo Jin and Heekyong Yang

SEOUL (Reuters) -Samsung Electronics said it would focus on producing high-end chips to improve profitability after reporting a 40% quarter-on-quarter plunge in chip profit, in a stark contrast with rivals TSMC and SK Hynix that posted record earnings on the AI boom.

The world's biggest maker of memory chips, smartphones and TVs also warned on Thursday of limited earnings growth in the current quarter due to intensifying competition in the consumer electronics segment during the peak year-end demand season.

"In the fourth quarter, while memory (chip) demand for mobile and PC may encounter softness, growth in AI will keep demand at robust levels," Samsung said in an earnings statement.

"Against this backdrop, the Company will concentrate on driving sales of High Bandwidth (NASDAQ:BAND) Memory (HBM) and high-density products," it said, referring to premium memory chips used to make AI chipsets like those produced by industry leader Nvidia (NASDAQ:NVDA).

Samsung posted an operating profit of 9.2 trillion won ($6.66 billion) in the July to September period, compared with 2.4 trillion won a year earlier and 10.4 trillion won the previous quarter.

The third-quarter result was slightly above Samsung's preliminary estimate of 9.1 trillion won flagged earlier this month, which was below market expectations at the time. Shares fell 0.2% in early trading on Thursday, with the wider South Korean market down 1.3%.

"Samsung Electronics (KS:005930) hasn't commercialised HBM as effectively as its competitors, so its third-quarter performance and fourth-quarter outlook are falling short of market expectations," said Baik Gil-hyun, analyst at Yuanta Securities.

BEIJING (Reuters) -China's manufacturing activity in October expanded for the first time in six months, an official factory survey showed on Thursday, supporting policymakers' optimism that recent fresh stimulus will get the world's No. 2 economy back on track.

The official purchasing managers' index (PMI) rose to 50.1 in October from 49.8 in September, just above the 50-mark separating growth from contraction and beating a median forecast of 49.9 in a Reuters poll.

In a further encouraging sign, the non-manufacturing PMI, which includes construction and services, rose to 50.2 this month, after it dropped to 50.0 in September.

Policymakers are banking that further financial stimulus announced in late September will stabilise China's $19 trillion economy and kick lending and investment back into gear, as a sharp property market downturn and frail consumer confidence continue to deter investors.

The mood in the manufacturing sector has been depressed for months by tumbling producer prices and dwindling orders. Furthermore, China's exports, a lone bright spot, faded last month and the economy grew at the slowest pace since early 2023 in the third quarter.

Still, officials are publicly optimistic that this latest tranche of policy support will soon start to make itself felt.

China economists have previously pointed to how sentiment-based surveys often present a gloomier picture than hard data indicators. In the poll, one-in-three respondents forecast factory activity broke back into expansion this month.

In a worrying sign, however, industrial profits recorded the steepest monthly decline of the year in September, data showed on Sunday. The National Bureau of Statistics said that was due to factors such as insufficient demand.

Other recent indicators pointed to increased deflationary pressures and subdued loan demand, raising further red flags over the economic recovery and strengthening the case for even more stimulus to galvanise growth.

China is considering approving next week the issuance of over 10 trillion yuan ($1.40 trillion) in extra debt in the next few years, Reuters reported on Tuesday.

($1 = 7.1301 Chinese yuan)

By David Milliken and Sachin Ravikumar

LONDON (Reuters) - Britain's new finance minister Rachel Reeves announced the biggest tax increases in three decades in her first budget on Wednesday, accusing the former Conservative government of breaking the country's public services.

Businesses and the wealthy were set to bear the brunt of the tax hikes and Reeves also paved the way for higher borrowing for investment to speed up Britain's economy, which has been slowed by the 2007-09 global financial crisis, Brexit, COVID and soaring energy prices.

The former Bank of England economist - who said she was proud to be the first female Chancellor of the Exchequer - stressed there would be no repeat of how former Conservative Prime Minister Liz Truss sent the bond market into a tailspin in 2022 with her unfunded tax cut plans.

Initial reaction to her speech suggested investors were unfazed by the Labour Party's first economic programme.

But government prices fell later as the scale of the planned spending became apparent and investors scaled back their bets on Bank of England interest rate cuts next year.

Reeves said she would raise taxes by 40 billion pounds ($52 billion) a year, blaming the Conservatives for leaving her Labour Party with a budget "black hole".

"Any responsible Chancellor would take action," she said. "That is why today, I am restoring stability to our public finances and rebuilding our public services."

She painted a grim picture of Britain, with record waiting times in the health service, children studying in crumbling schools and dysfunctional transport and justice systems.

But in a setback for the new government, a budget watchdog said the economy was expected to grow by less than previously forecast between 2026 and 2028 after outperforming only slightly in 2024 and 2025.

Showing the scale of the new tax increases on top of those of the previous government, the watchdog also said Reeves' plans would take the government's tax take to a historic high of 38.2% of economic output by the end of the decade. That is still lower than in many other European economies but is up from 36.4% now and more than 5 points higher than before the pandemic.

According to the Institute for Fiscal Studies think-tank, tax hikes of 40 billion pounds would be equivalent to 1.25% of economic output, surpassed in recent history only in 1993 by a budget plan under the Conservatives.

Prime Minister Keir Starmer had warned "those with the broadest shoulders" would have to pay more to spare "working people."

The yield on 10-year British government bonds - which moves in the opposite direction to prices - was up by around four basis points on the day at 1600 GMT, having fallen sharply during Reeves' speech earlier.

Investors were pricing in fewer interest rate cuts by the BoE given the scale of government spending with four quarter-point reductions expected in 2025 compared with about five earlier in the day.

TAXES UP FOR BUSINESSES AND THE WEALTHY

Reeves announced a string of tax increases, saying "difficult decisions cannot be constantly delayed or deferred" as she sought to uphold her new rule get day-to-day spending back into balance by the end of the decade.

The rate of social security contributions paid by employers will rise by 1.2 percentage points to 15% from April, and a threshold at which firms start to pay it will come down, raising an extra 25 billion pounds a year in five years' time.

Company bosses warned that higher taxes, combined with planned new protections for workers and an increased minimum wage, could undermine Labour's growth ambitions.

"This is a tough budget for business," Rain Newton-Smith, the CBI's chief executive, said.

A cap on a tax on business profits was welcome but the overall rise in employer costs would "hit the ability to invest and ultimately make it more expensive to hire people or give pay rises," Newton-Smith said.

Other revenue-raising moves included changes to taxes on capital gains and inheritances and tax paid by private equity executives, non-domiciled residents and users of private jets and private schools.

But Reeves unexpectedly ruled out making more individuals pay basic and higher income tax rates after a freeze on the threshold for payments expires in the 2028/29 tax year.

She also extended a freeze on fuel duty and cut a tax on draught beer in pubs, measures that could help to reverse a fall in support for Starmer's fledgling government in opinion polls.

In another significant move, Reeves said she would change a second fiscal rule to allow for more borrowing, paving the way for 100 billion pounds in investment over the next five years.

Reeves said the government will now target a fall in public sector net financial liabilities as a share of the economy, rather than public sector net debt excluding the BoE.

By Stella Qiu

SYDNEY (Reuters) -Australian consumer price inflation slowed to a 3-1/2 year low in the third quarter, though the core measure was still sticky and reinforced market wagers that the central bank won't start cutting rates until next year.

Overall, the report was rather mixed, with consumers benefiting from government rebates on electricity and a drop in petrol, while services price pressures persisted. 

That kept market reaction muted. Investors slightly pared the chance of a rate cut from the Reserve Bank of Australia this December and next February to just 24% and 44%. Markets still see April next year as the most likely timing for the first easing.

Data from the Australian Bureau of Statistics on Wednesday showed the consumer price index (CPI) rose 0.2% in the third quarter, under forecasts of a 0.3% increase. 

Annual inflation dropped to 2.8%, from 3.8%, taking it back into the RBA's 2-3% target band for the first time since 2021, a result that was largely expected. 

The slowdown was driven by a 17.3% drop in electricity prices due to the government's subsidies, while petrol fell 6.2% in the quarter.

Policymakers are more focused on core inflation and the trimmed mean measure increased by 0.8% in the quarter, just above forecasts of a 0.7% gain. The annual pace though slowed to 3.5% from 4.0%.

Commonwealth Bank of Australia (OTC:CMWAY) on Wednesday abandoned its call for a first rate cut in December as the core measure was a touch firmer than it had expected. It is now pencilling in a cut in February next year, along with the other three big banks in Australia.

"The process of normalising the cash rate will be a story for 2025," said Gareth Aird, head of Australian economics at CBA.

Services inflation remains a source of concern for the RBA, staying elevated at 4.6% in the third quarter, slightly higher than the June quarter's 4.5%, and little changed over the past 12 months.

The central bank will have an updated set of economic forecasts when it decides on its next policy move on Tuesday.

The slow easing in inflation had Australian grocer Woolworths warning on Wednesday that earnings from its food division may fall as price-conscious consumers hunt for bargains.

POSITIVE IMPULSE

For September alone, CPI rose a muted 2.1% compared with a year earlier, the lowest since July 2021. The trimmed mean measure slowed to 3.2%, just a touch above the top of the target band.

The RBA has held its policy steady since November, judging the current cash rate of 4.35% - up from 0.1% during the pandemic - is restrictive enough to bring inflation to its target band of 2-3% while preserving employment gains.

The labour market has stayed surprisingly resilient, an argument against early rate cuts. But the easing in annual core inflation comes ahead of the RBA's projection for it to slow to 3.5% by the end of the year.

"Although quarterly trimmed mean CPI is not yet rising at pace consistent with the RBA’s target range, we think it will do so before long," Abhijit Surya, Australia and New Zealand Economist at Capital Economics.

By Jihoon Lee

SEOUL (Reuters) - South Korea's export growth is expected to have slowed for a third straight month in October on signs of cooling global demand for computer chips, a Reuters poll showed on Wednesday.

Outbound shipments from Asia's fourth-largest economy are forecast to have risen 6.9% in October from a year earlier, according to the median of 22 economists in the survey conducted Oct. 24-29.

That would be the 13th straight month of annual export growth but slightly weaker than the 7.5% year-on-year rise in September and the slowest rate since June.

"It is likely export growth has entered a slowing trend with IT demand beginning to gradually weaken amid limited demand for non-semiconductor exports," said Chun Kyu-yeon, an economist at Hana Securities.

South Korea, the first major exporting economy to report trade figures each month, is scheduled to report monthly data for October on Friday, Nov. 1, at 9 a.m. (0000 GMT).

Asia's fourth-largest economy barely grew in the third quarter due to a fall in exports, which had been led mainly by semiconductor sales to the United States.

"A slowdown in exports led by the semiconductor sector would be adverse news for the economic growth outlook if confirmed: semiconductor exports have largely been moving sideways in recent months," said Oh Suk-tae, an analyst at Societe Generale (OTC:SCGLY).

In the first 20 days of this month, exports fell 2.9%. Shipments to the United States and the European Union were down 2.6% and 8.9%, respectively, while those to China rose 1.2%.

"Growth in shipments to the United States, which has been robust, is seen slowing, while the recovery in China-bound shipments will be weaker than expectations," said Park Sang-hyun, an economist at iM Securities.

On the imports ledger, purchases are forecast to have risen 2.0% in October, after growing 2.2% in September.

The survey's median estimate of this month's trade balance came in at a surplus of $4.23 billion, compared with $6.66 billion in the prior month.

By Rae Wee

SINGAPORE (Reuters) - Asia shares eased on Wednesday on the back of weakness in China, as investors brace for a tightly contested U.S. election that could have huge ramifications for the world's second-largest economy, even as Beijing tries to shore up growth.

Gold rose to an all-time high as jitters over the close U.S. presidential race supported the yellow metal, while bitcoin also flirted with a record peak as markets weigh the prospect of a victory by Republican candidate Donald Trump.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.22% in early trade, tracking a decline in Chinese assets.

The CSI300 blue-chip index fell 0.16%, while Hong Kong's Hang Seng Index slid 0.64%.

The moves came even as Reuters reported on Tuesday that China is considering approving next week the issuance of more than 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy.

"China's latest stimulus package appears underwhelming, with 60% allocated to local government debt relief," said Saxo's chief investment strategist Charu Chanana.

"While there's a stronger focus on supporting the property sector, urgency around broader structural issues - such as debt, deflation, and demographics - remains limited.

"Equity support could offer some lift to domestic confidence, but foreign investors are still highly concerned about potential tariff threats if next week's U.S. elections result in a Republican sweep."

China's new energy vehicles index ticked up 0.2%, largely unfazed by news that the European Union has decided to increase tariffs on Chinese-built electric vehicles to as much as 45.3%.

Meanwhile, U.S. stock futures ticked higher, buoyed by a solid result from Google-parent Alphabet (NASDAQ:GOOGL), which reported quarterly revenue that beat estimates.

Nasdaq futures gained 0.42%, while S&P 500 futures rose 0.36%.

Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) report their earnings later in the day, followed by Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) on Thursday. [.N]

Investors will be closely watching the results to determine whether Wall Street can sustain the optimism around technology and artificial intelligence that has lifted indexes to record highs this year.

Elsewhere, Japan's Nikkei rose nearly 1%, riding on the momentum of a weaker yen. (T)

U.S. FOCUS

Bitcoin stood just a whisker away from its peak of $73,803.25 and last bought $72,322.08, on track to gain 13% for the month.

The world's largest cryptocurrency has been bolstered by the growing possibility of Trump's return to the White House, as he is seen taking a more favourable stance towards digital assets.

"Bitcoin's strength should persist if the odds for a Republican sweep continue to grow, as a less likely Democratic sweep might meet a generalised sell-off," said Manuel Villegas, digital assets analyst at Julius Baer.

On the economic front, investors were also bracing for a slew of U.S. data this week that could guide the outlook for Fed policy.

The ADP National Employment Report is due later in the day alongside advance third quarter GDP estimates, which will come ahead of Friday's nonfarm payrolls figures.

Data on Tuesday showed U.S. job openings dropped to more than a 3-1/2-year low in September, though that was countered by a separate survey which showed consumer confidence increased to a nine-month high in October amid improved perceptions of the labour market.

"The U.S. data is still important for this week, there's no doubt about it," said Khoon Goh, head of Asia research at ANZ.

"We saw the JOLTS data out last night, it showed continued moderation of the labour market ... Today we have ADP, Q3 GDP, PCE deflator tomorrow and then payrolls Friday. So that will still be really important, particularly for the long-end yields and the impact on the dollar."

The dollar strayed not too far from a three-month high against a basket of currencies on Wednesday, though a stall in its recent rally gave sterling some respite above the $1.30 level.

The yen languished near a three-month low as it continued to feel the pressure from the loss of a parliamentary majority for Japan's ruling coalition in weekend elections.

The Aussie was little changed in the wake of domestic inflation data and last rose 0.15% to $0.6570.

In commodities, Brent crude futures ticked up 0.42% to $71.42 a barrel, while U.S. West Texas Intermediate crude futures rose 0.45% to $67.51 per barrel. [O/R]

Spot gold was last 0.18% higher at $2,779.81 an ounce, after having peaked at $2,781.69 earlier in the session. [GOL/]

By Philip Blenkinsop

BRUSSELS (Reuters) -The European Union has decided to increase tariffs on Chinese-built electric vehicles to as much as 45.3% at the end of its highest profile investigation that has divided Europe and prompted retaliation from Beijing.

Just over a year after launching its anti-subsidy probe, the European Commission will set out extra tariffs ranging from 7.8% for Tesla (NASDAQ:TSLA) to 35.3% for China's SAIC, on top of the EU's standard 10% car import duty.

The extra tariffs were formally approved and published in the EU's Official Journal on Tuesday, meaning they will take effect on Wednesday.

The Commission, which oversees EU trade policy, has said tariffs are required to counter what it says are unfair subsidies including preferential financing and grants as well as land, batteries and raw materials at below market prices.

It says China's spare production capacity of 3 million EVs per year is twice the size of the EU market. Given 100% tariffs in the United States and Canada, the most obvious outlet for those EVs is Europe.

The China Chamber of Commerce to the EU said it was profoundly disappointed by the "protectionist" and "arbitrary" EU measure and was disheartened by the lack of substantial progress in negotiations to find an alternative to tariffs.

Beijing launched its own probes this year into imports of EU brandy, dairy and pork products in apparent retaliation.

It has also challenged the EU's provisional measures at the World Trade Organization.

European automakers are grappling with an influx of lower-cost EVs from Chinese rivals. The Commission estimates Chinese brands' share of the EU market has risen to 8% from below 1% in 2019 and could reach 15% in 2025. It says prices are typically 20% below those of EU-made models.

The EU's stance towards Beijing has hardened in the last five years. It views China as a potential partner in some areas, but also as a competitor and a systemic rival, but EU members are not united on EV tariffs.

Germany, the EU's biggest economy and major car producer, opposed tariffs in a vote this month in which 10 EU members backed them, five voted against and 12 abstained.

Germany's economy ministry said on Tuesday that Berlin supported ongoing EU negotiations with China and hoped for a diplomatic resolution to mitigate trade tensions while protecting EU industry.

"The Federal Government stands for open markets. Because Germany in particular, as a globally interconnected economy, is dependent on this," the spokesperson added.

German carmakers have heavily criticised the EU measures, aware that possible higher Chinese import duties on large-engined gasoline vehicles would hit them hardest.

The measures come as thousands of German industrial workers, including at the carmakers, strike for higher wages, with Volkswagen (ETR:VOWG_p) possibly about to announce shutting plants on home soil for the first time in its 87-year history.

Hungarian Prime Minister Viktor Orban said the EU was headed for an "economic cold war" with China.

However, France's PFA car association has welcomed duties, adding it backed free trade as long as it was fair.

The Commission has held eight rounds of technical negotiations with China to find an alternative to tariffs and said talks can continue after tariffs are imposed.

The two sides are looking at possible minimum price commitments for imported cars and agreed on Friday to hold a further round, although the Commission said there were "significant remaining gaps".

It remains to be seen what impact tariffs will have on consumer prices. Some producers may be able to absorb them at least partially.

In the first nine months of 2024, China's EV exports to the EU were down 7% from a year earlier, but they have surged by more than a third in August and September, ahead of the tariffs, data from the China Passenger Car Association (CPCA) show.

Investing.com -- The Nasdaq closed at record highs Tuesday, shrugging off mixed economic data as tech continued to rack up gains ahead of major earnings.   

At 4:00 p.m. ET (2000 GMT), the Dow Jones Industrial Average dropped 154 points, or 0.4%, the S&P 500 index gained 0.2%, and the NASDAQ Composite jumped 0.7% to a record closing high of 18,717.58.

Tech rallies ahead of Alphabet earnings 

Big tech led the broader market higher just ahead of Alphabet's quarterly results due after the market closes. 

"We think Street estimates for 3Q advertising growth are achievable, but we see limited opportunity for upside relative to estimates this quarter given," Wedbush said in a recent note, flagging several concerns including slowing search growth and increased competition for the tech giant's Youtube business.  

Five of Wall Street’s “Magnificent Seven” are due to report earnings this week, with Google owner Alphabet (NASDAQ:GOOGL) set to report after the market close on Tuesday.

This will be followed by Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) on Wednesday, while Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) will report on Thursday.

This week’s earnings are set to act as a bellwether for the broader market, given the relative market capitalization of the five tech giants. Investors will be watching to see whether Wall Street’s biggest firms were able to generate strong returns on their sizeable investments in artificial intelligence over the past year. 

“Putting it all together, risk flows over the last week, while positive, were rather subdued but kept net positioning for the S&P 500 net long and extended,” Citi strategists led by Chris Montagu said in a note.

Investing.com -- The Nasdaq closed at record highs Tuesday, shrugging off mixed economic data as tech continued to rack up gains ahead of major earnings.   

At 4:00 p.m. ET (2000 GMT), the Dow Jones Industrial Average dropped 154 points, or 0.4%, the S&P 500 index gained 0.2%, and the NASDAQ Composite jumped 0.7% to a record closing high of 18,717.58.

Tech rallies ahead of Alphabet earnings 

Big tech led the broader market higher just ahead of Alphabet's quarterly results due after the market closes. 

"We think Street estimates for 3Q advertising growth are achievable, but we see limited opportunity for upside relative to estimates this quarter given," Wedbush said in a recent note, flagging several concerns including slowing search growth and increased competition for the tech giant's Youtube business.  

Five of Wall Street’s “Magnificent Seven” are due to report earnings this week, with Google owner Alphabet (NASDAQ:GOOGL) set to report after the market close on Tuesday.

This will be followed by Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) on Wednesday, while Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) will report on Thursday.

This week’s earnings are set to act as a bellwether for the broader market, given the relative market capitalization of the five tech giants. Investors will be watching to see whether Wall Street’s biggest firms were able to generate strong returns on their sizeable investments in artificial intelligence over the past year. 

“Putting it all together, risk flows over the last week, while positive, were rather subdued but kept net positioning for the S&P 500 net long and extended,” Citi strategists led by Chris Montagu said in a note.

Ford falls after cutting full-year profitability forecast 

Ford (NYSE:F) stock fell 8% after the automaker tempered its full-year profit forecast, blaming supplier disruptions and warranty costs amid a global price war fueled by overcapacity.

"Ford 3Q24 results showed continued pressure from some of the issues that have hit them for a while, namely higher warranty reared its head again (this time in Pro)," UBS said in a recent note.

Vans parent VF Corporation (NYSE:VFC) leapt 27% after the company reported a profit for the first time in two quarters.

DR Horton (NYSE:DHI) stock dropped 7% after the homebuilder forecast 2025 revenue below estimates, while McDonald’s (NYSE:MCD) stock was flat despite reporting a drop in global sales.

Labor market demand cools, but consumer confidence jumps 

Teh JOLTS job openings data, a measure of labor demand, for September unexpectedly fell, but the "pace of hiring picked up, lending some upside risk to our forecast for October payroll growth," Oxford Economics said on Tuesday. 

The quits rate, meanwhile, fell to its lowest level since the pandemic, which is consistent "with wage growth continuing to slow and easing the inflationary impulse from the labor market," it added.

Further clues into the labor market will continue to dominate attention with the release of the jobless claims and the ADP, or private payolls, report later this week, before the October jobs report due Friday.   

Consumer confidence, meanwhile, jumped to highest since 2021 despite uncertainty about the election outcome.

Ahead of the nonfarm payrolls report, however, inflation will also garner interest. September's US core personal consumption expenditures price index - the Fed's preferred measure of inflation - on Thursday,/

The readings come just weeks before a Fed meeting, where the central bank is widely expected to cut interest rates by a smaller 25 basis points.

The U.S. presidential elections are also set to take place in the coming week, with voting set for Nov. 5.

Republican nominee Donald Trump and Vice President Kamala Harris are set for a tight race, although recent polls and prediction markets have tended to favor Trump. 

(Peter Nurse, Ambar Warrick contributed to this article.)