Equities: Tech rally faces Tesla headwind despite Meta beat - Deutsche Bank

A third successive gain left the S&P 500 within 1% of its record high, according to Deutsche Bank, as technology stocks performed strongly and optimism supported AI-exposed names. Futures have since come under pressure from weaker signals in Meta and Tesla’s guidance. With S&P 500 and NASDAQ 100 contracts indicating declines, the recent rally may give way to near-term consolidation.

Futures retreat as the rally loses momentum

"For instance, the Philly semiconductor index (+1.97%) continued to recover, whilst the NASDAQ (+1.05%) also put in a strong session. So that helped to lift US equities more broadly, with the S&P 500 ultimately up +0.58%, closing within 1% of its record high. And over in Europe, there were even bigger gains, with the STOXX 600 (+0.92%) and other indices all posting a solid performance, with tech leading the way there too."

"For Meta, its shares rose by more than +2% in after-hours trading, as it beat on Q3 revenue ($64.6bn vs $63.3bn est.) and delivered Q4 guidance towards the upper end of expectations ($73-76bn vs $73.6bn est.). The company also slightly boosted its 2026 capex plan from a $130bn-145bn range to $135bn-145bn. However, Tesla fell by -3% after-hours after it cut its 2026 capex target from $25bn to $20bn. So that raised questions about the speed of its transition into AI and robotics, while current revenue and earnings were close to expectations."

"In aggregate, those results took some of the shine off the tech mood overnight, which had been a bit more optimistic yesterday. So this morning, futures on the S&P 500 (-0.66%) and the NASDAQ 100 (-1.32%) are both pointing lower. Moreover, we’ve seen that echoed across Asian equity markets this morning, with all the major indices falling back."

"That includes sharp losses for the KOSPI (-3.26%), the Hang Seng (-2.87%) and the Nikkei (-2.00%), whilst there have been relatively smaller declines for the CSI 300 (-1.26%) and the Shanghai Comp (-0.89%). Earlier in the session, the CSI 300 had even entered bear market territory, having fallen more than -20% since its closing peak in June, although it’s pared back those losses since and is now slightly above that level."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)