CLOSING BELL
All Comes Down To This
The market fell yet again Tuesday, the S&P 500 getting awfully close to the 100-day moving average. Cloudflare was down Tuesday morning, an internet network security provider for a fifth of all web traffic, but that feels like ages ago now. ChatGPT, X, NJ Transit, and other sites felt issues before a reboot.
Bitcoin dropped below $90k, but its rebound kept every crypto name from falling for the day.
The Philly Semi index fell 2.3% on the day,into correction territory, 28 of 35 names falling in the lead up to Wednesday’s big Nvidia report. Microsoft and Amazon were both leading Mag 7 names lower after a downgrade from Rothschild & Co Redburn.
ADP data showed a net loss of jobs on a week-to-week measure, investors awaiting the Thursday Federal government unemployment rate release, expected to match a four-year high of 4.3%.
The House voted nearly unanimously to release the Epstein files, a motion sent to the Senate, unanimously accepted, and likely forwarded to Trump’s desk tonight, while the President was welcoming Saudi Crown Prince Mohammad Bin Salman in the Oval Office, claiming $21T of investment is coming to the U.S.
The meeting went a bit awry when an ABC journalist asked about the assassination of U.S. journalist Jamal Khashoggi.
Today’s RIP: Nvidia expectations, Three Mile reopening, Mag 7 Downgrades, Home Depot demand slump, and more somehow.
6 of 11 sectors closed green. Energy $XLE ( ▲ 0.8% ) lead and discretionary $XLY ( ▼ 1.85% ) lagged.
AFTER THE BELL STOCKS
Uncle Sam Restarting Failed Nuke
Wikimedia Commons - Three Mile Island nuclear generating station, which suffered a partial meltdown in 1979. The reactors are in the smaller domes with rounded tops (the large smokestacks are just cooling towers).
Constellation Energy $CEG ( ▲ 0.2% ) was gettting a boost after the bll after landing a $1B Fed loan to restart the Three Mile Island plant that partially melted down way back in 1979.
The goal is to lower energy prices, recently heightened in part by a rash of AI data center projects spreading across the U.S., according to Energy Secretary Chris Wright. Constellation said it was working with $MSFT ( ▼ 2.7% ) on the project, and the news sent CEG shares flying 15% in September when it was announced. Microsoft signed a 20-year power agreement.
“We want to bring as much addition of reliable electricity onto the grid to stop these price rises,” Wright said.
Don’t worry about melt-downs: Constellation is restarting the part of the plant that is still working, shut down in 2019 because it was too expensive to restart, according to WSJ. Nuclear seems obvious during an AI energy boom, but not five years ago, plants were struggling to compete with super-low-cost natural gas production and renewables.
The second rector at the plant that nearly caused a whole generation of Philadelphians to grow up with extra eyeballs is shut down for good.
TECH STOCK WOES
MSFT, AMZN Fall On Downgrade From Ex-Cop
Unfortunately, not everyone is celebrating new energy deals and massive AI spending anymore. Microsoft and Amazon were both leading Mag 7 names lower after a downgrade from Rothschild & Co Redburn.
The analyst shop said both hyper scalers were trying to sell the AI boom as another breakthrough like cloud computing 1.0 originally was, but their not buying it. In fact, Redbrun is Neutral on the stocks, Alexander Haissl arguing that AI infrastructure will cost multiple times more just to get to the profitability levels of legacy cloud computing.
Cloud 1.0 had cheap hardware, millions of customers and room to grow pricing, while Haissl sees the competition in AI: it’s very expensive, and customers are start-ups without the ability to stomach price increases. Haissl steals a note directly from bear Michael Burry’s depreciation notebook, noting Mag 7 names are pricing their margin returns on double the tech depreciation schedule than they used to.
“Gen-AI margins already assume longer depreciation schedules of 5-6 years, versus just 3 years in the early cloud era,” Haissl said. “On a like-for-like basis, this means capital intensity for Gen-AI is significantly higher, while pricing power is notably weaker.”
He sees hyperscalers, the name for big ol’ AI makers, are only seeing 20% on every dollar spent, compared to $1.40 on every dollar, 140% in previous generations of big tech blow-ups.
So, are we cooked?
Ed YArdani, speaking to Bloomberg Businessweek reporters in the post-market, played the neutral card and encouraged investors listening to think of the AI revolution in a longer scale. Datacenters are not new, ChatGPT has been around since before Biden took office, and Mag 7 were doing record numbers even before AI became a new toy.
“It's not like they all just started to build data centers this year. Data centers have been around ever since the internet became the cloud, and then the cloud is where all the data centers really come in. And that started really around 2011 ‘12, ‘13’ 14,” he said.
The chip sell-off aims the largest names, and trajectory of the Semi index into correction territory, and smaller names like $AMD ( ▼ 4.25% ) are leading the way. But even without Mag 7 names, we would still be in a bull market, Yaardani said.
“Everybody seems to be under the impression that the only companies that have any earnings growth whatsoever is Magnificent Seven. If you take out the Magnificent Seven industry, they don't even exist. I think we were still in a bull market.”
Yardani is not concerned about local pullbacks, the digital revolution to him has been ongoing since IBM was big, and the data revolution is only going to feed on itself, forever.
“In this digital revolution, the more data we can process, the faster we can do it, the more cheaply we can do it, the more data we're going to process,” Yardani said. “It feeds on itself. Companies right now are testing out AI models…. That creates a lot of demand for AI capacity.”
He uses AI every day, it’s like Google on steroids, he said.
REVIEWS AND PREVIEWS
Home Depot Expected Demand That Didn’t Come, + What The Market Expects Tm
Home Depot fell Tuesdasy $HD ( ▼ 6.02% ) following its report. The largest home improvement retailer in the U.S. missed analyst estimates with its Q3 report. Comparable store sales rose but not high enough for investors, and the company reduced its oulook going forward.
"An expected increase in demand in the third quarter did not materialize. We believe that consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand," President and CEO Ted Decker said.
Speaking of Big box retailers, here’s what to look for from companies reporting tomorrow, not called Nvidia:
Target $TGT: Analysts expect EPS around $1.72–$1.73 with revenue near $25.3B, slightly down YoY. Revenue is expected to decline.
Lowe’s $LOW: Street is looking for $2.95 EPS on $20.84B revenue, roughly flat versus last year. Housing demand softness remains the key risk flagged by analysts.
UP Fintech $TIGR: Forecast calls for EPS $0.21 and revenue about $128M.
TJX Companies $TJX: EPS estimate sits at $1.22 with revenue near $14.9B, up mid‑single digits YoY. Analysts highlight strong off‑price momentum as a driver.
Bullish $BLSH: Current quarter EPS is pegged at $0.10 with revenue around $71M.
Palo Alto Networks $PANW:Consensus EPS ranges $0.73–$0.89with revenue at $2.46B, up double digits YoY. Analysts remain bullish on cybersecurity demand tailwinds.
MACRO NEWS
NVIDIA REPORT INCOMING WEDNESDAY
Speaking of previews, tomorrow is $NVDA ( ▼ 2.81% ) earnings! The AI giant is down about 14% from its highs, but a major beat might turn that frown upside down.
What to look for:
Analysts are looking for 55% growth in revenue from last year, Q3 2026 Revenue $55B, and EPS $1.25, according to averages on Yahoo Finance.
Investors looking for big news might be let down. Nvidia just held its October annual tech showcase in D.C., and though Chief Jensen Huang said the chip giant had $500B bookings in 2025 and 2026, investors will want even more than just that to reward a report tomorrow night.
In the past, Huang has used earnings calls to discuss promising opportunities for future sales. Depending on ongoing trade talks with China, Huang has said his chip sales could climb to $50B in revenue.
Might he have more to say about those plans? Tuesday, the president said the U.S. would start selling high-end chips to the Saudis, giving signs that Huang might mention those chip deals too during his call.
The chip maker has beaten earnings estimates for nine consecutive quarters, but from Q1 - Q2 its gross margin fell slightly to 69% from 70%. It's hoping to report 73% margins tomorrow, according to analysts.
Options analysts see a 7% implied move in the stock +- after the report, which would be the largest market value move for the company ever, according to Reuters.
Make Your Vote, and predict the Closing price the day after its report on Stocktwits for a Visa gift card!
POPS & DROPS
Top Stocks News Stories
Paramount formed consortium with Middle East funds for Warner Bros bid.
Medtronic eyed M&A deals after Q2 earnings beat.
Trump hailed Saudi $600B investment, Crown Prince eyed $1T.
Waymo announced robotaxi launch in five new cities.
Exxon to shut Scotland ethylene plant after failed sale.
Cloudflare outage disrupted X, ChatGPT, and internet services.
WHAT’S ON DECK
Tomorrow’s Top Things
Economic data: Building Permits (8:30 AM), Atlanta Fed GDPNow (10:30 AM), Crude Oil Inventories (10:30 AM), 20-Year Bond Auction (1:00 PM), FOMC Meeting Minutes (2:00 PM), FOMC Member Williams Speaks (2:00 PM)
Pre-Market Earnings: Target Corp ($TGT), Lowe`s Cos., Inc. ($LOW), UP Fintech Holding Ltd ($TIGR), TJX Companies, Inc. ($TJX), and Bullish ($BLSH)
After-Market Earnings: NVIDIA Corp ($NVDA) and Palo Alto Networks Inc ($PANW).