CNBC Daily Open: Bullish sentiment and broadening rally – markets are in a good place

Breather from rally
U.S. markets fell Tuesday, weighed down by a drop successful semiconductor stocks and a 8.1% descent successful UnitedHealth. Asia-Pacific stocks were mostly little Wednesday. Asian spot stocks, similar Tokyo Electron and Taiwan Semiconductor Manufacturing Company, retreated connected news of ASML's disappointing forecast and reports of the U.S. perchance imposing export controls connected AI chips.

ASML slumps
Shares of semiconductor instrumentality shaper ASML plunged 16% connected a downbeat net report. For 2025, the Netherlands-based institution thinks nett income volition travel successful astatine the little fractional of its erstwhile projection. ASML missed expectations connected nett bookings by 3 cardinal euros for the September quarter, though nett income bushed expectations.

Better than ChatGPT
Alibaba updated its artificial-intelligence translation tool, based connected a exemplary called Marco MT, connected Wednesday. The Chinese e-commerce elephantine said its merchandise performs amended than those by Google and DeepL, according to an appraisal by benchmarking instrumentality FLoRes. Fifteen languages are supported by Alibaba's AI-powered translation tool.

Banks bushed expectations
Goldman Sachs, Bank of America and Citigroup bushed net and gross estimates for their 3rd quarter. Goldman was the standout performer: Its profit jumped 45% from a twelvemonth earlier. Year connected year, Bank of America experienced a 12% driblet successful nett income and Citigroup's net income fell 8.6%.

[PRO] Repositioning for slower complaint cuts
September's beardown jobs study and higher-than-expected ostentation speechmaking mean that the U.S. Federal Reserve is improbable to repetition its jumbo 50-basis-point complaint chopped astatine its November meeting. Here's how strategists are repositioning successful presumption of changing complaint chopped expectations.

Despite markets falling Tuesday, there's inactive plentifulness to similar astir their existent state.

Weighed down by ASML's 16% dive and a report by Bloomberg connected imaginable AI-chip export controls, semiconductor stocks similar Nvidia and AMD fell 4.7% and 5.2% respectively. That gave the VanEck Semiconductor ETF its worst time since Sept. 3. As a result, the tech-heavy Nasdaq Composite mislaid 1.01%.

The Dow Jones Industrial Average, which conscionable yesterday was basking successful its accomplishment astatine closing supra the 43,000 level for the archetypal time, fell 0.75% to dip into the 42,000 territory again. UnitedHealth's 8.1% driblet dragged down the Dow.

Last, the S&P 500 retreated 0.76%.

Still, investors are the astir bullish successful 4 years, according to the October BofA Global Fund Manager Survey. They're besides optimistic astir the economy: 74% investors judge the U.S. volition debar a recession.

Anticipation of much complaint cuts by the U.S. Federal Reserve and hopes that Beijing volition unleash much stimulus to boost its system are driving up capitalist sentiment, according to Michael Hartnett, an concern strategist astatine BofA.

Indeed, San Francisco Fed President Mary Daly, who's a subordinate of the Federal Open Market Committee this year, noted that the cardinal slope is "a agelong mode from wherever [rates are] apt to settle." That means "the decisions that are truly successful beforehand of america are ones astir however rapidly to set towards that level" – not whether to support rates precocious successful airy of how beardown caller economical information has been.

Another affirmative motion for markets is however the S&P and Dow deed all-time highs connected Monday, but the Nasdaq was inactive a fewer percent points distant from its peak. "This subtle divergence is method grounds that the marketplace has been moving distant from the Magnificent Seven mega-caps," wrote Piper Sandler's main marketplace technician Craig Johnson.

– CNBC's Jeff Cox, Samantha Subin, Yun Li, Lisa Kailai Han and Alex Harring contributed to this story.