Futures Steady | AI Rebounds | Court Shutdown Strains the Economy

After two choppy sessions, Wall Street is catching its breath, but the air still feels heavy. The calm this morning comes less from conviction than exhaustion, as investors weigh tech’s rebound against the deeper drag of policy risk and economic fatigue.

Dow futures slipped 6 points, while the S&P 500 and Nasdaq 100 futures both edged up 0.1%, signaling a tentative open after Wednesday’s relief rally.

Tech is leading the stabilization. Nvidia rose more than 1% pre-market, AMD added 2% after a solid quarter, and Micron and Broadcom climbed 9% and 2%, respectively, restoring confidence to the AI trade after early-week selloffs.

Qualcomm, despite beating expectations, slipped 1% as traders questioned how quickly its new AI chips will deliver real earnings power.

Beyond the tape, policy risk dominates.

The Supreme Court’s scrutiny of tariff powers raised hopes for a partial rollback, potentially easing cost pressures for manufacturers and multinationals, while the six-week government shutdown continues to ripple through the economy.

The FAA’s 10% flight reduction across 40 airports highlights how unpaid staff shortages are bleeding into travel and logistics, just as holiday demand ramps up.

Abroad, the Bank of England kept rates unchanged, diverging from the Fed’s October cut. The dollar softened against the yen and pound, while gold extended gains as traders sought a hedge against policy uncertainty.

Investor Signal

The market’s surface calm belies rising stress beneath. Investors should watch for a rotation into defensive sectors, such as utilities, staples, and gold, if policy paralysis deepens.

AI remains the market’s pressure valve, but with layoffs climbing and transport disruptions mounting, risk appetite could narrow fast.

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The Federal Aviation Administration will scale back flight volumes by roughly 10% at 40 major U.S. airports beginning Friday, an extraordinary step to relieve pressure on unpaid air-traffic controllers as the government shutdown extends into its sixth week.

Transportation Secretary Sean Duffy said the measure is aimed at maintaining safety amid deepening strain on the aviation system.

The FAA, which oversees more than 40,000 daily flights, will publish the list of affected airports on Thursday. Aviation data firm Cirium estimates that as many as 1,800 flights could be grounded on the first day of cuts.

FAA Administrator Bryan Bedford called the move “without precedent,” saying it reflects growing risks from fatigue and absenteeism among essential workers.

Airlines are bracing for turbulence heading into the holiday season. United Airlines expects minimal disruption to its long-haul and hub-to-hub routes but acknowledged that regional services will be hit.

American and Southwest said they are reviewing schedules and will notify passengers once the reductions are confirmed.

 The trade group Airlines for America has warned that the shutdown has already delayed or cancelled more than three million passenger journeys since October.

The travel industry has become one of the most visible casualties of Washington’s budget impasse.

Nearly 500 companies and associations have urged Congress to pass a spending bill, warning that prolonged instability will erode consumer confidence and undermine business travel recovery.

At the same time, airline executives are contending with softer leisure demand and higher operational costs, a combination that could squeeze fourth-quarter earnings.

Deeper Read: Shutdown’s Hidden Economic Toll

The FAA’s move highlights how the shutdown has evolved from political gridlock into an economic drag. Aviation’s ripple effects touching logistics, tourism, and local spending, may soon surface in corporate guidance and GDP estimates.

Investor Signal

Airline shares could face short-term volatility as flight capacity tightens and revenue visibility clouds.

Carriers with strong balance sheets and international exposure, such as Delta and United, are better positioned to absorb the disruption, while low-cost and regional operators remain most vulnerable if the shutdown persists.

America’s largest homebuilders are finding that cheap finance and price cuts are not enough to clear finished stock. The pipeline of completed-but-unsold new homes has swelled to levels last seen in 2009.

After overbuilding into an anticipated 2025 spring rebound that never arrived, developers are leaning on mortgage buydowns and discounts to shift inventory, often with underwhelming results.

D.R. Horton is advertising sub-4% promotional mortgages via its captive lender and has trimmed average selling prices over the past year, with further reductions guided for FY2026.

Lennar has paired rate buydowns with hefty incentives worth tens of thousands of dollars per home, a package that approximates a mid-teens cut to headline pricing, depths last associated with the global financial crisis.

The cost of those inducements is eroding margins, prompting a slower pace of starts as builders protect cash and optionality.

Weakness is uneven but widening. The Midwest remains orderly; Texas and Florida, where permissive codes and rapid in-migration encouraged aggressive building, face gluts.

Southern California is deteriorating as resale listings rise, foreign demand fades on tighter visa rules, and high-end hiring cools; finished, unsold units per community have roughly doubled year on year.

In Washington, D.C., unsold stock has jumped, with the prolonged federal shutdown and public-sector job losses chilling demand.

Institutional bid support is thin. Single-family rental operators are more selective, insisting on steep discounts that builders are reluctant to meet.

Large landlords can develop their own supply at better economics, reducing appetite for bulk take-outs.

Meanwhile, resale owners retain the option to delist or rent rather than meet the market, a dynamic that keeps prices sticky even as underlying demand softens.

Deeper Read: When Discounts Can’t Drive Demand

This episode underscores that affordability is a three-legged stool, price, rate, and income.

Rate cuts alone cannot solve for stretched monthly payments when insurance, taxes, and living costs have reset higher, particularly in Sun Belt metros where construction boomed.

With the labour market cooling at the margin and mobility constrained by costs, the clearing price for new homes may need to fall further, or incentives will keep substituting for true price discovery.

Investor Signal

Expect continued pressure on gross margins and community counts at volume builders; land-light models with balance-sheet flexibility should fare better.

Watch option-land impairments, cancellation rates, and incentives as a share of revenue. Building-products names tied to new starts, regional banks with construction exposure, and SFR REITs with development pipelines will be key second-order tells.

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A.P. Møller–Maersk, often viewed as a proxy for the health of world commerce, lifted its full-year guidance after reporting stronger-than-expected third-quarter results, underscoring that global trade remains more resilient than many had feared.

The Danish shipping group posted underlying earnings before interest, tax, depreciation and amortisation of $2.68 billion for the three months to September, narrowly surpassing analyst estimates.

The result, though down sharply from last year’s elevated levels, was buoyed by firmer container volumes and steady demand across most regions. The company now expects full-year operating profit between $9 billion and $9.5 billion, raising the lower end of its earlier range.

Chief executive Vincent Clerc described the performance as “a story of resilience,” pointing to a late-quarter pickup in U.S. trade activity and the company’s success in containing costs despite inflationary pressures.

“We’ve been able to trim costs and lift margins across all of our businesses,” Clerc told CNBC. Maersk also raised its forecast for global container trade growth in 2025 to around 4 percent, from 2 to 4 percent previously.

Despite the upgrade, Maersk’s shares fell more than 6 percent in Copenhagen, as investors weighed ongoing pressure on freight rates and the likelihood that profitability will remain well below pandemic highs.

 The company’s stock, however, remains modestly higher for the year.

Deeper Read: Trade Resilience & Profit Pressure

​The results suggest global trade is entering a slower but steadier expansion phase, rather than contracting outright. Fears that deglobalisation would permanently weaken shipping demand appear overstated:

China’s manufacturing strength continues to underpin trade flows to Asia, Africa, and the Middle East.

Still, the sector’s profitability will hinge on efficiency rather than pricing.

Shipping lines that can manage costs, diversify routes, and capitalise on intra-regional trade are best placed, while those dependent on trans-Atlantic freight may face a tougher year ahead.

Investor Signal

Investors should watch for signs of volume-driven stability rather than pricing strength.

Logistics players with flexible cost structures, diversified routes, and exposure to intra-Asian trade corridors may outperform, while carriers dependent on trans-Atlantic lanes could remain vulnerable to tariff disruptions and slower Western demand.

Robinhood Markets delivered a striking third-quarter performance, posting revenue that doubled year on year to $1.27 billion as trading activity surged across stocks, options, and crypto.

The retail brokerage reported earnings of $0.61 a share, well ahead of expectations, marking its second consecutive quarter of solid profitability.

Yet, shares slipped about 2% in after-hours trading, reflecting concerns over valuation and whether such blistering growth can be sustained.

Much of Robinhood’s momentum stems from its expanding range of financial products.

The firm’s prediction markets and its Bitstamp crypto exchange now generate roughly $100 million each in annualized revenue, remarkable feats for lines launched only a year ago.

Chief executive Vlad Tenev told investors that prediction markets had doubled volume every quarter since launch, handling more than 2 billion contracts in the latest period. “Prediction markets are really on fire,” he said.

Transaction-based revenue, long Robinhood’s backbone, jumped sharply, with crypto leading gains. The company also added 2.5 million new funded accounts, bringing total users to nearly 27 million.

Tenev framed this as a sign of successful diversification. Robinhood now has 11 business segments, each generating over $100 million in revenue.

Still, questions linger over the durability of retail enthusiasm. Analysts warn that trading frenzies tend to ebb once market volatility cools, and that Robinhood’s expansion into betting-style contracts could invite regulatory scrutiny.

Deeper Read: Finance Meets the Betting Boom

​Robinhood’s evolution reflects a broader convergence of finance and gaming.

The firm is betting that prediction markets, essentially binary contracts on political, economic, and cultural events, can draw a new generation of retail traders who view markets as interactive entertainment.

The rapid uptake suggests untapped demand, but it also pushes the company toward regulatory grey zones once confined to sports betting and derivatives trading.

Investor Signal

Investors face a familiar tension: Robinhood’s innovation engine is working, but its valuation already prices in relentless user and revenue growth.

Sustaining profitability will depend on scaling new products without courting regulatory risk or investor fatigue. For now, the company remains one of the clearest barometers of retail risk appetite in a frothy market.

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Qualcomm beat Wall Street expectations for the fourth quarter, signaling progress in its effort to move beyond smartphones and into artificial intelligence hardware. The chipmaker reported adjusted earnings of $3 a share on revenue of $11.27 billion, up 10% year on year.

It also issued stronger guidance for the current quarter, projecting up to $12.6 billion in revenue, well ahead of consensus estimates.

Growth came from more than phones. Handset sales rose 14%, automotive revenue climbed 17%, and Internet of Things sales gained 7%, all above expectations.

 The company is cushioning itself against the gradual loss of Apple’s modem business by expanding into vehicles, PCs, and connected devices. CEO Cristiano Amon said the results underscore “a broadening demand base across sectors.”

The bigger story, however, is Qualcomm’s AI push. The company unveiled its AI200 and AI250 accelerator chips, designed for data centers using liquid-cooled, full-rack systems.

The chips, due in 2026 and 2027, aim to challenge Nvidia’s dominance in AI compute, a long-term bet that’s being watched closely by investors.

Despite the beat, Qualcomm shares slipped in after-hours trading as markets weighed the extended timeline for meaningful AI revenue.

Deeper Read: AI Ambitions & Real-World Limits

​Qualcomm’s results show a company straddling two worlds: the legacy handset market that built its fortune and the AI-driven computing frontier it hopes will define its next decade.

The transition will test whether its design expertise in mobile efficiency can translate to high-performance computing.

Investor Signal

Qualcomm’s near-term outlook remains solid, its guidance implies stable demand across mobile and automotive, but its long-term re-rating depends on convincing markets it can compete with Nvidia and AMD in AI infrastructure.

For now, Qualcomm trades as a value play in a growth market: profitable, diversified, but still searching for a defining breakthrough to regain its leadership among semiconductor peers.

This morning’s calm masks deep cross-currents. AI optimism and tariff hopes are steadying futures, yet mounting layoffs, flight cuts, and housing softness hint at an economy losing altitude beneath headline growth.

Earnings from Airbnb, Warner Bros. Discovery, and ConocoPhillips later today will test whether corporate America can keep absorbing political and policy shocks.

For now, markets are balanced, but it’s a fragile balance, and every data point this week could tilt it.