Friday opens with the market's central question of the week sharpened to a point: after Alphabet's record selloff on Thursday, Amazon and Intel deepened the doubt about the AI buildout overnight, and the tape arrives at month-end with growth leading the declines. The S&P 500 closed Thursday at 7,720.39, down 0.30%, the Nasdaq Composite fell 1.38% to 26,184.72, the Dow eased 0.25% to 52,342.56, and the Russell 2000 — notably — rose 1.01% to 2,859.22, a rotation into smaller names that says the session was about tech, not the economy. Overnight, Nasdaq 100 futures slid more than 2% as Amazon fell about 7% premarket on a revenue and earnings miss with rising capital spending, and Intel dropped about 25% on a weak fourth-quarter outlook. Asia followed: Korea's Kospi fell 3.48% to 5,730.74 and Japan's Nikkei 225 dropped 2.12% to 63,290.11, both led lower by chip stocks. Against that backdrop the Bank of Japan held its policy rate at 1.25% with a hawkish undertone, crude is higher again on Middle East headlines, and the macro event that matters today is the third-quarter Employment Cost Index at 8:30 AM ET — the wage data that will set the tone for the December rate decision markets now price at roughly 75%.

At a Glance

The ECI Reaction Function

The following is the desk's framework for reading the session, not a forecast.

• Hot ECI (base-case risk, ≥0.9% q/q, at or above the prior reading): December hike odds re-price toward 90%, the 10-year pushes back above 5.00%, the dollar firms, and equities stay offered — the AI-capex selloff gets a rates excuse layered on top of an earnings problem. Desk judgment: this is the outcome that turns a tech rotation into a full risk-off day, with the Russell's Thursday gain the first casualty.
• In-line ECI (consensus, +0.8% q/q): The macro tape stays on script — December hike odds hold near 75%, yields and the dollar trade sideways, and the session is decided by the AI story, not the data. Watch whether the morning's tech weakness stays confined to the mega-caps or broadens again into chips and software the way Thursday's did.
• Cool ECI (<0.7% q/q, tail): December hike odds slip toward a coin flip, the 10-year eases further below 4.95%, and the rotation into rate-sensitive names gets room to run — small caps, which were Thursday's lone bright spot, would be the tell. Desk judgment: a soft wage print is the cleanest path to a green close, because it undercuts the only argument for December while the economy's own data (Q3 GDP +3.4%) stays firm.

Overnight Headlines

• The AI-capex debate deepens as Amazon and Intel miss: Amazon fell about 7% premarket after third-quarter revenue and earnings missed expectations, with a sharp cash outflow and another increase in capital spending for next year — the same pattern that punished Alphabet on Thursday (a record −12.6% session). Intel dropped about 25% premarket on a weak fourth-quarter outlook, citing a soft PC market and manufacturing bottlenecks. In the premarket, Nvidia fell about 2.5%, AMD about 7%, and Broadcom about 4%, while Alphabet slipped another 0.9%. ExxonMobil and Chevron report before the open, which puts the session's other big theme — energy — directly on the tape.
• Asia's chip-heavy markets lead the region lower: South Korea's Kospi fell 3.48% to 5,730.74, with Samsung down 3.02% and SK Hynix down 7.08%, and the Korea Exchange triggered its sell-sidecar mechanism as the selling accelerated. Japan's Nikkei 225 dropped 2.12% to 63,290.11, with Advantest down 9.1% and Tokyo Electron down 5.6%, while the broader Topix fell 0.95%. China's Shanghai Composite fell 1.44% to 3,599.02, but Hong Kong's Hang Seng bucked the trend, rising 1.46% to 23,294.42 on gains in energy, tech services, and financials.
• The Bank of Japan holds at 1.25%, and the hawkish tone stays: The BoJ left its short-term policy rate unchanged at 1.25% after its two-day meeting, with an 8–1 vote — one policymaker wanted an immediate increase — and the governor repeated that the bank will keep raising rates as underlying inflation runs at its 2% objective. The yen briefly strengthened toward 157.00, then faded back to about 157.55. The message from Tokyo matches the one from Frankfurt, where the ECB held at 2.50% on Thursday and kept a December increase on the table.
• Oil climbs again on Middle East headlines, gold slips below $4,000: WTI is up about 1.5% near $103.52 and Brent about 1.6% near $116.70 as Houthi attacks on Saudi Arabia intensified and reports surfaced that the US may resume military action against Iran. Gold is trading below $4,000 an ounce spot, down about 0.6%, as leveraged investors liquidated hedges amid the cross-asset selling — while silver fell about 2.0%. European stocks opened mostly lower in early trading, led by tech.

What to Watch at the Open

1. The ECI at 8:30 AM ET and the December-odds readout. Consensus is +0.8% q/q, down from +0.9%. A print at or above the prior reading re-prices December toward 90% and puts the 10-year back over 5.00%; a soft print is the session's best chance to reverse the overnight futures. This is the macro hinge — everything else is earnings plumbing.
2. Whether the AI bid finds a floor or the weakness broadens. Nasdaq 100 futures are down more than 2% premarket on Amazon and Intel; the question is whether the selling stays in the mega-caps that guided capex higher or spreads back into chips and software. Thursday's pattern — small caps up 1% while tech fell — argues this is a rotation, not a breakdown, but a second straight 2%-plus Nasdaq open would test that read.
3. Crude's round trip and the Exxon/Chevron reports. WTI back above $103 reopens the inflation side of the ledger that the Thursday GDP/PCE data had quieted. ExxonMobil and Chevron report before the open with crude at its highest in months — strong prints would cement energy as October's winning trade and complicate the disinflation story heading into the November CPI.
4. Month-end positioning and the Nasdaq's monthly line. Friday is the last session of October: the S&P 500 and the Dow are headed for a monthly gain, while the Nasdaq is set for a monthly drop after two straight monthly gains. Nine of eleven sectors are set for monthly gains, with only technology and communication services underwater — watch whether month-end rebalancing bids the laggards or the tech-heavy exits continue into the close.

The Structural Read

October's final morning puts the month's two big themes on one tape: an economy that keeps surprising to the upside (Q3 GDP +3.4%, PCE broadly in line) and a mega-cap AI trade that is being re-priced for what it costs, not what it earns. The structural anchors have not moved — the Fed held at 3.75–4.00% with December still the live meeting, inflation is far below its 2022 highs, and earnings breadth outside technology has been solid. Desk judgment: the desk's bias remains toward treating this week's tech weakness as a rotation — capital leaving the AI buildout for energy, small caps, and rate-sensitive names — rather than a market breakdown, but the rotation needs the macro data to cooperate. A hot ECI would fuse the two worries (AI margins and December hikes) into one; an in-line print keeps the tape trading the earnings story, which is the healthier fight.

Bottom line: The last session of October opens with Nasdaq futures down ~2.2% on Amazon's and Intel's earnings renewing the AI-capex debate, while the macro anchor is the 8:30 AM ET Employment Cost Index — the wage data that will set December hike odds from their current ~75%. Watch the ECI surprise for rates, the breadth of the tech selling for the rotation thesis, and Exxon and Chevron's results with WTI back above $103.

Sources: TipRanks (premarket futures at 5:36 AM ET, Brent/WTI levels), Reuters via syndication (futures at 4:04 AM ET, Amazon/Intel premarket moves, Nasdaq monthly path), Invezz (futures at 7:06 AM ET, ECI 8:30 AM ET preview, +0.8% consensus), CNBC via TradingView (Asia closes: KOSPI 5,730.74 −3.48%, Nikkei 63,290.11 −2.12%, Topix, Hang Seng +1.46%), SKN Finance and Stockbiz (Asia close levels, KOSPI sidecar, individual chip moves), FXStreet (BoJ held 1.25% 8–1, USD/JPY 157.55, December Fed-hike odds ~75% via CME FedWatch, Europe early trading), TraderFactor (BoJ decision, ECI +0.8% consensus, today's calendar), EuropaSays (Eurozone GDP flash, German CPI, St. Louis Fed keynote), Summa Money (pre-open earnings: Exxon, Chevron, AbbVie, AstraZeneca), TalkMarkets (BoJ hawkish tone, spot gold below $4,000, BTC ~$78.6K on Binance halts, VIX premarket estimate via Market Autopsy, ECB December hike signal), Market Player PRO (pre-session futures/energy/rates snapshot), WXYwaves (ECI 12:30 GMT = 8:30 AM ET, next calendar items — all dates re-verified against live sources this run), yesterday's PM brief (Thursday adjusted closes for ^GSPC, ^IXIC, ^DJI, ^RUT, ^VIX, ^TNX, CL=F, GC=F). Data is ~15-minute delayed, not tick real-time.

Disclaimer: This research is for informational purposes only and does not constitute investment advice. Options trading involves substantial risk of loss. Past performance is not indicative of future results.