A divided market awaits the next economic test
Five things to know before the open on Thursday, November 5.
Good morning. The post-election rally is widening, but not every part of the market is joining it. Dow futures are higher while chip and data-center shares remain under pressure. A strong advertising report offers a counterpoint to weak smartphone-chip sales, and oil is trying to stabilize after Wednesday's plunge.
Today's key event: U.S. initial jobless claims and preliminary productivity and costs data arrive at 8:30 AM ET. They have not been released at this edition's 8:00 AM stamp. Friday's October jobs report is still ahead.
1. The rally broadens as AI hardware falls behind
U.S. futures point to a divided start. Dow contracts are higher, S&P 500 futures are modestly higher and Nasdaq 100 futures are lower. Chipmakers and companies tied to the data-center buildout remain weak after the Democrats' midterm sweep. Investors are weighing the risk that closer scrutiny could slow construction and equipment spending. That is an expectation about policy, not an announcement of new restrictions.
The split extends overseas: chip-heavy Asian markets fell while Hong Kong and European shares gained. The overnight rotation shows why a stronger broad index can coexist with a difficult morning for AI suppliers. Wednesday's post-election rally is the backdrop, rather than a promise of another uniform advance.
2. Qualcomm's handset slump outweighs automotive growth
Qualcomm shares are sharply lower in premarket trading after handset-chip revenue fell 26% from a year earlier to $5.14 billion. Automotive revenue rose 89% to $1.99 billion, but that smaller business did not erase weakness in the much larger smartphone operation.
The company reported adjusted quarterly earnings of $2.17 a share and forecast $2.15 to $2.35 for its fiscal first quarter. The outlook disappointed investors despite the earnings beat. Rising input costs are another pressure point; management expects the full benefit of its price increases to reach chip-business gross margins in the second half of fiscal 2027. Our Qualcomm report separates that cost issue from the effect of changing the data-center segment's reporting.
3. AppLovin offers a different earnings signal
AppLovin shares are higher before the open after the advertising platform reported third-quarter revenue of $2.185 billion, up 55% from a year earlier. Net income rose 72% to $1.439 billion, and diluted earnings were $4.30 a share.
The company forecast fourth-quarter revenue of $2.365 billion to $2.395 billion. Its board also increased the share-repurchase authorization by $3.2 billion, bringing the amount available to $3.6 billion at the end of October. Those are company results and plans, not a guarantee that the premarket gain will hold. The contrast with Qualcomm is a reminder that this morning's technology trade depends heavily on the business beneath the ticker.
4. Oil rebounds, but Wednesday's fall still matters
Crude prices are higher after Wednesday's sharp selloff, with Brent still below $100 a barrel. Traders are weighing whether the U.S. election result could increase pressure for an end to the Iran war, alongside the outlook for Middle Eastern supply. Hopes for diplomacy are not a signed peace deal.
Cheaper oil has helped the broader market even as AI-linked stocks struggle. It also changes the inflation backdrop investors are watching, although a fall in crude does not immediately translate into an equivalent fall in consumer prices.
5. The next test comes from labor and productivity
The 8:30 AM ET releases will give markets new evidence on unemployment-benefit applications, output per hour and labor costs. Claims are a weekly measure, while the preliminary productivity report covers the third quarter. Neither is a substitute for Friday's monthly employment report, due at 8:30 AM ET.
With stock leadership shifting and oil moving sharply, the distinction between a market reaction and an economic result matters. This morning's futures describe positioning before those releases; they do not tell us what the data will say or where the cash market will close.
