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ASML reported stronger than expected third quarter profits, with net income reaching €4.96 billion versus €4.1 billion forecast, despite revenue slightly missing expectations at €11.66 billion. The Dutch semiconductor equipment maker said demand for its advanced chipmaking machines continues to grow, driven by AI investments. Demand for 2027–2028 is expected to exceed planned supply, prompting ASML to explore further production capacity expansion.
In the US, stock futures were mixed on Wednesday as investors awaited September’s CPI report, with inflation expected to rise to 3.6% year on year from 3.4% previously, amid persistently high oil and gasoline prices. Meanwhile, semiconductor stocks remained under pressure for a sixth consecutive session as concerns about excessive AI spending, Chinese competition, and elevated valuations weighed on sentiment. Despite strong underlying demand, investors are becoming more selective, particularly in the technology sector.
Third quarter earnings season also remained in focus. S&P 500 companies are expected to deliver approximately 30% earnings growth. Investors are watching results from Bank of America and Morgan Stanley for further clues about corporate performance and the sustainability of the AI-driven rally.
In China, producer price index (PPI) rose 5% year on year in September, its fastest increase in over four years, exceeding the 4.5% forecast and accelerating from 3.8% in August, driven by higher fuel costs. Consumer inflation also increased to 0.9%, up from 0.8% but slightly below the 1% forecast. Rising producer prices suggest mounting cost pressures for businesses, while weaker than expected consumer inflation highlights subdued domestic demand.
Oil continued advancing higher amid worries over supply disruptions as tensions continue to escalate in the Middle East. Crude brent rose 0.6% to $106.43 a barrel. West Texas Intermediate gained 0.63% to $94.76 per barrel.
Gold prices fell toward $4,155 on Wednesday as rising oil prices heightened inflation concerns and increased expectations of tighter monetary policy ahead of the US CPI report. Escalating Middle East tensions added to fears of prolonged energy-driven inflation, while the IMF warned that elevated public debt and rising bond yields could create further financial risks.
However, comments from New York Fed President John Williams offered some support, as he indicated that another rate hike could be appropriate in 2026 but that further tightening may not be necessary in 2027. Treasury yields subsequently declined, providing some relief for gold. Markets largely expect the Fed to hold rates steady this month, although a December hike remains a strong possibility.
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