Tech Earnings Fuel Optimism Amid Trade Tensions

Global markets are entering the final trading day of October on a stronger footing, as upbeat earnings from major U.S. technology firms reignited investor optimism following a volatile week dominated by geopolitical and policy headlines. Robust results from Amazon and Apple restored confidence in the megacap tech complex, while political developments between Washington and Beijing added another layer of uncertainty to the broader macro landscape.

U.S. Market Outlook

U.S. equity futures advanced early Friday, with contracts on the S&P 500 up 0.6% and Nasdaq 100 futures gaining more than 1%, as investors reacted positively to better-than-expected results from Amazon and Apple. The rebound follows a brief pullback in tech stocks earlier in the week, when concerns about excessive AI spending pressured valuations.

The upbeat tone reflects a renewed belief that the earnings cycle for large-cap tech may still have room to run, supported by the continued integration of AI across cloud computing, e-commerce, and device ecosystems. Treasury yields stabilized near 4.10%, and the U.S. dollar index held steady, suggesting a momentary pause in risk aversion.

Corporate Highlights

Amazon’s Cloud Division Reaccelerates

Amazon delivered one of its strongest quarters in recent years, driven by the performance of Amazon Web Services (AWS), which expanded 20% year-over-year to $33 billion — its fastest growth since late 2022. The results eased concerns that AWS was losing momentum to rivals. The company also highlighted the growing contribution of artificial intelligence across its operations, including its retail chatbot “Rufus” and enterprise AI marketplace “Bedrock.”

Overall revenue climbed 13% to $180.2 billion, while operating income rose to $17.4 billion despite restructuring charges. Amazon projected fourth-quarter sales between $206 and $213 billion, signaling confidence heading into the holiday season. Shares surged roughly 13% in extended trading.

Apple Signals Record Holiday Quarter

Apple also surprised investors with a bullish forecast for the December quarter, expecting revenue growth of 10%–12% year-on-year — nearly double Wall Street expectations. The optimism was driven by strong demand for its newly launched iPhone 17 lineup and expanding services business, which rose 15% to $28.8 billion last quarter.

The company’s fiscal Q4 revenue reached $102.5 billion, up 7.9% year-on-year, while earnings per share stood at $1.85, surpassing expectations. Despite a 3.6% revenue decline in Greater China, Apple anticipates returning to growth in the region this quarter. Shares rose over 4% in after-hours trading.

Broader Tech Sector Performance

Beyond the earnings giants, Meta attracted strong investor demand for its $30 billion bond issuance, reflecting continued market confidence in the tech sector’s balance sheet strength despite rising capital costs. Nvidia also benefited from AI-related optimism, signing new partnership agreements with major South Korean firms even as export controls remain a political flashpoint.

However, Microsoft shares came under pressure following mixed earnings, highlighting that while the AI revolution continues to drive growth narratives, the heavy infrastructure costs are increasingly shaping corporate strategy and investor perception.

Macro and Geopolitical Developments

U.S.–China Trade Truce and Rare Earths

Markets also digested fresh developments from the highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping. The two leaders agreed on a temporary one-year truce involving tariffs and export controls, including a pause on China’s planned rare earth export restrictions and the U.S.’s expansion of its high-tech export blacklist.

While Trump hailed the agreement as a “win” for both economies, analysts note that it largely represents a short-term ceasefire rather than a structural shift in trade relations. The U.S. concessions — including rolling back certain tariffs tied to fentanyl and port fees — may offer near-term relief to manufacturers but risk reinforcing China’s leverage in critical minerals. The rare-earth sector remains vulnerable, as procedural delays in export licensing persist despite the diplomatic pause.

The outcome also signaled Beijing’s growing bargaining power, as China continues to tie access to strategic materials to broader technology and defense discussions.

Market Implications

The combination of strong U.S. tech earnings and a temporary easing in trade tensions has provided a short-term lift to risk assets. However, structural challenges remain: China’s influence over critical minerals, persistent regulatory headwinds for U.S. tech firms, and the uncertain path of monetary policy continue to frame the medium-term outlook.

Investors appear willing to rotate back into growth sectors for now, particularly with signs of resilient consumer demand heading into the holiday period. Yet, with valuations stretched and macro crosscurrents intensifying, volatility may remain elevated through year-end.

Final Note

The global equity rebound led by Amazon and Apple underscores that the AI-driven growth story remains the dominant market theme despite policy uncertainty. However, the geopolitical backdrop — especially the fragile truce between the U.S. and China — could quickly test sentiment again. The coming weeks will reveal whether this renewed optimism can sustain itself or merely sets the stage for another rotation as investors weigh earnings momentum against political and monetary risks.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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