US stock futures rose on Wednesday amid hopes for interest-rate cuts, with more Wall Street banks posting strong results in a promising start to earnings season.

Dow Jones Industrial Average futures (YM=F) moved up roughly 065%, following a rocky session on Tuesday for markets. Meanwhile, contracts on the S&P 500 (ES=F) and tech-heavy Nasdaq 100 (NQ=F) added 0.8% and 1%, respectively

A solid start to earnings season is buoying market spirits in the face of US-China trade friction and a US government shutdown with no end in sight.

Before the bell, Bank of America (BAC) posted a 23% jump in profit, becoming the latest big US bank to benefit from this summer's bonanza of big deals on Wall Street. Morgan Stanley (MS) saw its profits surge 45% in what its CEO hailed as an "outstanding" quarter.

Reports from PNC Financial (PNC) and Abbott Laboratories (ABT) also highlighted the morning docket. Earlier, surprise beats from ASML (ASML, ASML.AS) and LVMH (MC.PA, LVMUY) helped lift those stocks.

Meanwhile, comments from Jerome Powell also provided a boost. The Federal Reserve Chair said Wednesday that "downside risks to employment appear to have risen," implying more rate cuts are on the cards. Investors closely scrutinized Powell's remarks, given the current lack of insight into the economy as the federal stoppage delays the release of key data.

Investors have cemented bets on a rate cut later this month, and odds of a rate cut in December have jumped in recent days to around 95%.

The US-China trade tensions that have unsettled markets continued to bubble, after President Trump said he was considering an embargo on cooking oil from China in response to its cut in purchases of US soybeans. The threat follows China's fresh sanctions on five US subsidiaries of South Korean shipbuilder Hanwha.

At the same time, the Trump administration is preparing for the government shutdown to drag on. A list of federal programs earmarked for cuts is expected this week, and the White House budget office is scrambling to find ways to pay military members and law enforcement.

Nvidia (NVDA) shares rose 2% premarket on Wednesday as HSBC (HSBC) analyst Frank Lee upgraded the stock to Buy from Hold.

Lee said he expects the market for Nvidia's AI chips to keep growing beyond its Big Tech customers — pointing to the Stargate AI projects in the US and abroad and OpenAI's (OPAI.PVT) recent deal with Nvidia — \\"leading to continuous earnings growth\\" for the chipmaker. Lee raised his price target on shares to $320 from $200.

Also boosting Nvidia's shares was the company's participation in another multibillion-dollar deal in the AI space. An investor consortium called the Artificial Intelligence Infrastructure Partnership (AIP), which includes the AI chip giant, BlackRock (BLK), Microsoft (MSFT), and Elon Musk's xAIm said it will acquire 100% of the equity in data center company Aligned Data Centers. The transaction would value Aligned Data Centers at roughly $40 billion.

AIP's investment is the latest in a tangled web of AI deals involving vendors of AI infrastructure investing in their own customers, and vice versa — a circular dynamic that analysts warn is contributing to a stock market bubble.

Bitcoin (BTC-USD) rose 0.5% on Wednesday morning, trading at around $112,009 per token, following a steep 5% loss the day before as US-China tensions reescalated and Fed Chair Powell implied that more rate cuts were possible.

As my colleague Hamza Shaban wrote in today's Morning Brief newsletter, after the crypto had been set up for a strong October, investors are now resetting their speculative bets.

The back-and-forth between Washington and Beijing forced a pause across an array of bullish markets, rattled investors, and reminded Wall Street that, far from being a settled matter, tariffs are still in play as a political weapon and a powerful destabilizer. But bitcoin and other cryptocurrencies were hit especially hard.

Part of the plunge in prices has to do with the excitement surrounding crypto investing, which translates to more aggressive wagers using borrowed money. Some investors who wielded leverage on the chance of winning outsized gains were left dangerously exposed when panic selling took hold. A wave of forced liquidations exacerbated the fall.

Read more here.

Dollar Tree's (DLTR) stock rose 8% before the bell on Wednesday after the retailer announced at its Investor Day that it expects earnings per share to gain as much as 10% annually over the next three years. The company said that despite higher traffic from consumers that can afford to spend more, tariffs still present a problem.

Bloomberg News reports:

The Chesapeake Virginia-based company also said earnings per share is expected to grow by a “high-teens percentage” in fiscal 2026 due to cost benefits.

Dollar Tree, which made this projection ahead of an investor presentation slated for later on Wednesday, is trying to sharpen its focus under Chief Executive Officer Mike Creedon after selling the struggling Family Dollar chain for about $1 billion. That was far less than the almost $9 billion it paid for the business ten years ago.

While more traffic from higher income consumers has helped the company, tariffs are expected to present a tougher hurdle in the second half. At the same time, competition has intensified as shoppers cut back on spending.

Read more here.

Bank of America shares popped in premarket trading after the big bank reported a rise in profit, dealmaking and trading that outperformed analysts' expectations.

Yahoo Finance's David Hollerith reports:

Third quarter profits at Bank of America (BAC) climbed 23%, becoming the latest banking giant to benefit from a Wall Street dealmaking boom.

The country’s second-largest bank posted net income of $8.47 billion, which was $1 billion more than what analysts anticipated.

A big reason for that performance is that dealmaking fees from the Charlotte-based lender surged 43% from a year ago to $2 billion while client trading rose 8% to $5.3 billion.

Both Bank of America’s third quarter trading and dealmaking fees came in higher than analysts forecast, according to Bloomberg data.

Bank of America CEO Brian Moynihan noted \\"strong fee performance from our market-facing businesses,\\" in an earnings statement.

\\"With continued organic growth, every line of business reported top and bottom-line improvements,\\" Moynihan added.

Read more here.

Economic data: MBA Mortgage applications (week ending Oct. 10); Empire Manufacturing (October); Real average hourly earnings (September); Real average weekly earnings (September); Federal Reserve Beige Book

Earnings calendar: Bank of America (BAC), Morgan Stanley (MS), PNC (PNC), Synchrony Financial (SYF), Citizens Financial Group (CFG), Progressive (PGR), Abbott Laboratories (ABT), Prologis (PLD), United Airlines (UAL)

Here are some of the biggest stories you may have missed overnight and early this morning:

Wall Street boom boosts profits at Bank of America

China's retaliation cements a bitcoin reset

'Absolutely' a bubble: Wall Street warns on AI as investors go all-in

Trump's shutdown power grab goes unchecked by GOP lawmakers

AI helps ASML post orders beat, but China outlook dims

Trump threatens 'retribution' on China over soybeans

VIX curve inversion tests trader resolve with volatility rising

Can Tesla stay a trillion-dollar company on just 2 models?

LVMH shares surge after surprising return to sales growth

Here's a look at some of the top stocks trending in premarket trading:

AMD (AMD) stock rose more than 2% in premarket trading on Wednesday. It was announced on Tuesday that Oracle would deploy more than 50,000 of AMD AI chips.

MP Materials Corp. (MP) stock fell 3% before the bell on Wednesday following the prior days trading when it closed 3%. The rare earth company is in focus right now as China impose export restrictions on their rare earths and investors look to alternative firms.

Tesla (TSLA) stock rose 1% in premarket trading on Wednesday. A report this week from Kelly Brook stated that sticker prices for US cars have now reached $50k for the first time.

Wall Street is growing louder with warnings that the artificial intelligence trade may be overheating, writes Yahoo Finance's Allie Canal.

She reports:

After months of record gains in AI-linked stocks and corporate spending, concerns are mounting that the boom is starting to look like a bubble.

JPMorgan CEO Jamie Dimon underscored that tone of caution while speaking to reporters on Tuesday, calling elevated asset prices “a category of concern.”

“When asset prices are elevated, you have further to fall,” Dimon said, adding that while “consumers are still spending [and] companies are making money,” valuations and credit spreads remain stretched.

“You have a lot of assets out there which look like they’re entering bubble territory,” he said. “That doesn’t mean you don’t have 20% to go — it’s just one more cause of concern.”

That caution comes as new sentiment data shows investor exuberance reaching extremes.

Bank of America’s latest Global Fund Manager Survey, released Tuesday, cited an “AI equity bubble” as the top global tail risk for the first time in its history. ...

Another early warning sign: Correlations across sectors have fallen to their lowest level since the current bull market began. Colas said these “unusually low” readings tend to appear when investor confidence runs “too high” and is a pattern that often precedes short-term pullbacks.

Read more here.

LVMH (MC.PA, LVMUY) unexpectedly reported a return to sales growth in its third quarter earnings, a sign the decline in luxury demand is easing.

Paris-listed shares of the owner of Louis Vuitton and Christian Dior rose as much as 14% — the biggest intraday gain since 2001 — while its US-listed stock jumped around 9% in premarket.

Reuters reports:

While LVMH’s third-quarter revenue rose just 1% on an organic basis, the increase snapped two quarters of declines and stirred optimism that demand from China, long a driver of growth, might at last be returning. All the company’s divisions topped analysts’ estimates, and the region that includes China contributed to growth for the first time this year.

“The pace of recovery, stemming from all regions, is encouraging and bodes well for a return to growth next year and beyond,” JPMorgan analyst Chiara Battistini said in a note.

The results spurred share gains in companies ranging from Gucci-owner Kering SA (KER.PA, PPRUY), which rose as much as 8.8% in Paris, to Hermes International (HESAF, HMIA.F) and Hong Kong-listed Prada SpA (1913.HK).

Read more here.

ASML's (ASML, ASML.AS) orders topped estimates in the third quarter amid an AI investment boom, and the Dutch maker of chipmaking equipment said it expects to keep benefiting.

Shares rose over 3% in premarket trading even after ASML also warned it expects Chinese demand to drop significantly next year,

Reuters reports:

CEO Christophe Fouquet said Europe's largest tech firm by market capitalization was seeing \\"continued positive momentum around investments in AI.\\"

That boom was helping customers both in advanced logic chips — those used in smartphones and AI datacenters — and advanced memory chips also needed for AI. ...

Net bookings, the most closely-watched earnings figure, were 5.40 billion euros ($6.27 billion) in the third quarter, versus analysts' consensus estimate of 5.36 billion euros.

ASML said it expects Chinese sales to fall \\"significantly\\" next year, after having made up nearly half of company sales in 2024 and a third so far in 2025.

Read more here.

Gold (GC=F) hit a new record, bolstered by the ongoing US-China trade spat alongside comments from the Fed giving investors hope for a rate cut later in the year.

Bloomberg reports:

Bullion rose to a fresh peak of $4,185 an ounce. Spot silver advanced after a volatile day on Tuesday that saw prices surge to an all-time high above $53.54 an ounce, before tumbling sharply amid signs a historic squeeze is starting to ease.

Yields on US Treasuries fell to the lowest levels in weeks on Tuesday, after Fed Chair Jerome Powell signaled the US central bank is on track to deliver another quarter-point cut later this month. Lower yields and borrowing costs tend to benefit precious metals, which don’t pay interest.

Meanwhile, risk-off sentiment swept markets — boosting gold’s haven appeal — after President Donald Trump said he might stop trade in cooking oil with China. The comments injected fresh tensions into the relationship between the world’s two largest economies, with Beijing vowing to retaliate after Washington threatened an additional 100% tariff on China last week.

Read more here.