U.S. Stock Market Outlook | Three major index futures mixed, General Motors surges after earnings, Netflix to announce financial report after hours

Pre-Market Market Trends

1. As of October 21 (Tuesday), U.S. stock index futures are mixed before the market opens. As of the time of writing, Dow futures are up 0.08%, S&P 500 futures are up 0.03%, and Nasdaq futures are down 0.05%.

1. As of the time of writing, the German DAX index is up 0.17%, the UK FTSE 100 index is up 0.30%, the French CAC 40 index is up 0.55%, and the Euro Stoxx 50 index is up 0.26%.

1. As of the time of writing, WTI crude oil is up 0.79%, priced at $57.47 per barrel. Brent crude oil is up 0.67%, priced at $61.42 per barrel.

Market News

The rebound in U.S. stocks is not a vote of confidence! Short covering creates "false prosperity," and the upward trend may be hard to sustain. When the U.S. stock market rebounds from a sell-off amid ongoing uncertainty, there is often a hidden aggressive buyer behind the rally—short sellers forced to cover their positions. Although such aggressive covering typically boosts the overall market, this dynamic may create a false sense of "confidence vote." In reality, the market remains uncertain about U.S. President Trump's trade agenda or the direction of Federal Reserve policy. While the S&P 500 index rose 1.7% last week, risk aversion has increased, with traders raising funds for downside protection by selling call options.

Bank of America warns: If the credit storm escalates, pension funds forced to liquidate index funds could become the next bomb for U.S. stocks. Bank of America strategists have pointed out that signs of further tightening in the credit market could trigger a new round of declines in the U.S. stock market, as long investors such as pension funds may be forced to sell assets. Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Securities, noted that if private lending remains sluggish, institutions like pension funds may be compelled to sell index funds to avoid punitive losses from declines in private asset valuations and to meet ongoing funding obligations. She emphasized that passive investing has "dominated the U.S. stock benchmark index S&P 500," thus an economic downturn will force funds tracking this index to collectively sell stocks.

Allianz economist: The AI investment boom is a "rational bubble" that will help the U.S. outperform globally. Allianz Group's chief economic advisor Mohamed El-Erian stated that the U.S. economy is experiencing a boom driven by artificial intelligence, a trend that is helping the U.S. outperform global markets. El-Erian emphasized that the current investment boom in the field of artificial intelligence represents a "rational bubble," which is expected to bring significant productivity gains to the economy He also mentioned the synchronized rise in gold prices, believing that this trend stems from international concerns about the US dollar rather than a weak domestic economy in the United States.

Frequent signals of "tight money," Wall Street is confident that the Federal Reserve will signal the end of balance sheet reduction this month. Currently, several Wall Street analysis firms predict that the Federal Reserve may announce the termination of its years-long balance sheet reduction plan at the meeting scheduled for the end of this month. Observers point out that increasing friction in the money market may affect the achievement of both inflation and employment dual targets, and the quantitative tightening (QT) policy is facing a significant turning point. Analysts believe that if the Federal Open Market Committee (FOMC) meeting on October 28-29 decides to stop liquidity withdrawal by terminating QT, it will help ensure the smooth operation of monetary policy at a technical level. This shift in policy expectations stems from recent market fluctuations: several financial institutions unexpectedly utilized the Federal Reserve's standing repo facility (which provides rapid cash loans secured by bonds held by financial institutions), leading to increases in several key short-term borrowing rates.

Optimistic trade expectations can't withstand RSI pressure? Gold is caught in high-level fluctuations after hitting new highs. Despite the market's warming optimism regarding the easing of global trade tensions and the imminent restart of the US government, gold prices remain in a historical high-level fluctuation, indicating sustained strong demand for safe-haven assets. However, technical indicators such as the Relative Strength Index (RSI) suggest that the fierce upward trend since August may have been excessive, making it difficult to see such a frenzied rise again. As of the time of writing, spot gold has fallen over 2%, trading at $4,265.32 per ounce; spot silver has dropped more than 4%, trading at $50.09 per ounce.

Individual Stock News

General Motors (GM.US) Q3 performance exceeds expectations, raises full-year profit guidance. The financial report shows that General Motors' Q3 revenue was $48.59 billion, better than the market expectation of $45.26 billion; adjusted earnings per share were $2.80, exceeding the market expectation of $2.27. The company expects adjusted earnings per share for the full year of 2025 to be between $9.75 and $10.50, up from the previous expectation of $8.25 to $10.00; it expects adjusted EBITDA for the full year to be between $12 billion and $13 billion, up from the previous expectation of $10 billion to $12.5 billion. General Motors' optimistic outlook reflects a surge in sales of its high-margin fuel SUVs and trucks, a trend partially benefiting from adjustments to US federal emission policies. The company stated that due to a lower tariff base, the relief measures are expected to offset about 35% of the tariff impact in 2025. The company also indicated that as it increases investment in domestic procurement and manufacturing scale, it is in a very favorable position. As of the time of writing, General Motors' stock rose nearly 10% in pre-market trading on Tuesday.

Coca-Cola (KO.US) Q3 performance exceeds expectations, reiterates 2025 guidance. The financial report shows that Coca-Cola's Q3 revenue was $12.46 billion, better than the market expectation of $12.41 billion; adjusted earnings per share were $0.82, exceeding the market expectation of $0.78. The company's CEO James Quincey stated, "We are confident that we can achieve our 2025 guidance while striving to meet our long-term goals." "The company stated that it still expects to achieve a 5% to 6% growth in adjusted organic revenue by 2025, as well as a 3% increase in adjusted earnings per share to $2.88 compared to 2024. As of the time of publication, Coca-Cola rose nearly 3% in pre-market trading on Tuesday.

Strong performance in the commercial engine business boosts GE Aerospace (GE.US) Q3 revenue by 24%, raises full-year EPS forecast. The financial report shows that GE Aerospace's Q3 revenue increased by 24% year-on-year to $12.18 billion, exceeding market expectations of $10.41 billion; adjusted earnings per share were $1.66, better than the market expectation of $1.47. Revenue from the commercial engine business grew by 26.8% year-on-year to $8.88 billion, surpassing the market expectation of $8.34 billion. The company expects earnings per share in 2025 to be in the range of $6.0 to $6.2, up from the previous expectation of $5.6 to $5.8.

Zions Bancorporation (ZION.US) Q3 profits exceed expectations; analysts say credit pressure on U.S. regional banks remains an isolated phenomenon. Despite suffering significant losses from two loans, Zions Bancorporation's profits grew in the third quarter, benefiting from increased interest income. The financial report shows that Zions Bancorporation's Q3 revenue was $872 million, an 8.5% year-on-year increase, exceeding market expectations; earnings per share were $1.48, higher than the market expectation of $1.39. Stephens analyst Terry McEvoy stated, "The third-quarter financial reports of several U.S. regional banks did not show any unusual or unexpected credit losses, and management's outlook for the fourth quarter is reassuring. These trends support the view that the pressures faced by a few companies are more isolated incidents rather than emerging trends."

DocGo (DCGO.US) stock price surges in pre-market trading after acquiring virtual healthcare platform SteadyMD. DocGo announced that it has acquired the virtual healthcare platform SteadyMD. DocGo plans to update its 2025 revenue and adjusted EBITDA guidance to reflect the impact of this acquisition in its financial report and conference call scheduled for early November. As of the time of publication, DocGo's stock surged nearly 27% in pre-market trading on Tuesday.

Earnings Forecast

Wednesday morning: Netflix (NFLX.US), Texas Instruments (TXN.US), Alliance West Bank (WAL.US)

Wednesday pre-market: Barclays (BCS.US), Teck Resources (TECK.US), AT&T (T.US)