Chips drag Nasdaq futures as post-midterm rally cools; Bank of England expected to hike

Explain terms

The one thing that matters today

The Bank of England announces its rate decision at noon UK time (6:00 AM CT), and Reuters-polled economists expect a quarter-point hike to 4% from 3.75%, the first increase since August 2023. Economists in the Reuters poll expect a 7-2 vote, after a 6-3 vote to hold in September, and markets expect at least three more quarter-point hikes next year.

For US traders, this matters less for the decision itself, which looks widely expected, than for the tone. A major central bank raising rates because of energy-driven inflation is the same debate the Fed is having ahead of December, so Governor Andrew Bailey's guidance on further hikes could ripple into Treasury yields, the dollar and gold.

Before (overnight)

Wednesday's US session. The Dow rose 1,569.40 points, or 3.00%, to 53,356.12; the S&P 500 gained 1.58% to 7,688.62; and the Nasdaq Composite added 1.44% to 25,736.51. Kitco's report tied the rally to Democrats winning control of both the House and Senate, which raised expectations of legislative gridlock and more restrained fiscal spending, and to hopes of renewed US-Iran negotiations. AP reported that investors generally prefer split control of Washington because it lowers the risk of major economic changes.

Asia. AP reported that AI-related chip stocks kept falling on worries that AI-driven share gains had gone too far.

South Korea's Kospi briefly fell more than 4% and was down 3.5% at 5,484.38 by late morning, with Samsung Electronics down 5.7% and SK Hynix down 7.4%.
Japan's Nikkei 225 slipped 0.5% to 61,914.53, as Tokyo Electron fell 7.7% and Advantest fell 9.4%; Taiwan's Taiex fell 1.6%.
Hong Kong's Hang Seng jumped 2.8% to 24,597.59 and Australia's S&P/ASX 200 rose 1.9% to 9,003.40.
The Shanghai Composite was up 0.1%.

Europe. The STOXX 600 rose 0.7% to 661.99 at 0905 GMT, just shy of a record high, with Spain's IBEX up 1.7% and basic resources up 2%. Chip stocks lagged: Siltronic fell 7.3%, Soitec 4.8% and ASML 2.4%. Rheinmetall slid 16.5% after cutting its 2026 sales forecast for the second time in three months. Reuters reported that tech weakened on concerns that tighter scrutiny of data-centre buildout could slow AI spending. AI regulation concerns persist but appear offset for now by robust data-centre investment and resilient corporate earnings.^{John Plassard, Cité Gestion}

Qualcomm. Qualcomm shares fell about 9% in premarket trading after its smartphone chip sales missed Wall Street estimates, Reuters reported. Handset revenue, its largest business, fell 26% to $5.14 billion, and at least eight brokerages cut their price targets, according to LSEG data. "We lack conviction in a three-year ramp in a target-rich environment for AI semis."^{Morgan Stanley}

Oil. Brent fell 0.8% to about $93.9 early Thursday after plunging 8.7% on Wednesday, and US crude fell about 1% to roughly $87. Reuters, via Yahoo Finance, reported that oil fell for a fourth day as sources linked to Gulf governments said a full-scale assault on Iran "looks less likely."

Dollar and yields. The 10-year Treasury yield was near 4.89%, after finishing Wednesday near 4.88%; the 2-year was near 4.55%. The dollar slipped to 157.96 yen from 158.41, and the euro rose to $1.1256 from $1.1228.

Futures this morning (about 5:00 AM CT).

Market	Level	Change
Nasdaq 100 (NQ)	28,421.25	-145.50 (-0.51%)
S&P 500 (ES)	7,733.25	+12.75 (+0.17%)
Gold (GC)	4,144.00	+71.00 (+1.74%)

Nasdaq 100 futures were lower, with Reuters citing a 0.7% drop earlier in the morning. S&P 500 futures were little changed; Yahoo Finance's live coverage cited moves between -0.1% and +0.2% this morning. Spot gold was at $4,123.40 per ounce at 5:30 AM ET, up $63.20 (1.56%), after Wednesday's 3.5% jump back above $4,000. Kitco attributed gold's gains to lower yields, a weaker dollar and lower borrowing costs.

The overnight picture is a rotation, not a broad retreat. Money is leaving AI chip stocks and moving into miners, energy-transition names and other parts of the market, which is why the Dow and S&P 500 futures are holding up while the Nasdaq 100 lags.

The calendar

Time CT	Event	Consensus	Why it matters
6:00 AM	Bank of England rate decision	Hike to 4.00% from 3.75% (Reuters poll, 7-2 vote)	Its signal on further hikes could move global yields
6:30 AM	Bank of England press conference (Gov. Bailey)	—	Guidance on how far hikes may go
6:30 AM	Challenger job cuts, October	—	A read on layoffs before Friday's jobs report
7:30 AM	Initial jobless claims (week to Oct. 31)	Prior 194,000	Last labor read before Friday's jobs report
7:30 AM	Q3 productivity (preliminary)	Prior +1.4%	Strong productivity can ease inflation worries
During the day	Earnings: ConocoPhillips, Duke Energy, Southern Co., Cigna, Parker-Hannifin, EOG Resources, Simon Property	—	Energy and utilities after oil's slide
During the day	Earnings: Airbnb, Cloudflare, Monster Beverage, Lumentum	—	Lumentum and Cloudflare feed the AI-spending debate

The Federal Reserve Board's calendar lists no speeches for today; Vice Chair for Supervision Michelle Bowman speaks Friday at 11:15 AM CT. The October jobs report is due Friday at 7:30 AM CT.

What's priced in

The Fed held its target range at 3.75%–4.00% at its October meeting in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack favoring a quarter-point hike, after hiking in September.

As of Oct. 30, CME FedWatch showed a 71.4% probability of a quarter-point hike to 4.00%–4.25% at the Dec. 8–9 meeting. We could not open a fresh FedWatch reading this morning, so treat that figure as a week old; Friday's jobs data is the next likely mover.

Kitco noted the election "does not directly alter" Fed policy, and that softer jobs data could reduce December hike odds while stronger data would reinforce them.

In the UK, a hike to 4% is the consensus, and markets expect at least three more quarter-point increases in 2027. Expects one more hike in February 2027 and then a prolonged hold, calling the tightening "a risk-management calibration."^{Peder Beck-Friis, PIMCO} Expects the hike, citing higher energy prices and resilient growth.^{Hetal Mehta, St James's Place}

What could move NQ, ES and gold (general tendencies, not predictions)

A hawkish Bank of England. If Bailey signals more hikes than economists expect, global yields can rise. Higher yields have tended to weigh on high-valuation tech (NQ) and on gold, which pays no interest.
A softer tone from the BoE. If the Bank pushes back on market bets for several more hikes, yields could ease, which has tended to support gold and growth stocks.
Jobless claims and productivity. A jump in claims would point to a cooling labor market and could lower December hike odds; very low claims would do the opposite. A strong productivity figure can soften worries about labor-cost inflation.
The chip trade. NQ is heavily weighted toward chipmakers and AI names, so further selling in semiconductors can pull it down even on days when the broader S&P 500 holds up.
Oil and Iran headlines. Further oil declines tend to ease inflation fears, which helps yields fall; a reversal in Iran diplomacy could push oil, and inflation worries, back up.

What we're watching

Whether the rotation out of AI chips and into the rest of the market continues once the cash session opens.
Whether gold can hold above $4,100 as the dollar sits lower and yields ease.
Friday's October jobs report, which Kitco described as important for the Fed's Dec. 8–9 meeting.
Earnings after the bell from AI-linked names such as Cloudflare and Lumentum, for clues on data-centre demand.

The short version (the what and the result)

Nasdaq 100 futures are down about 0.5% as chip stocks sell off, led by Qualcomm (down about 9% premarket); S&P 500 futures are little changed.
Gold futures are up about 1.7% near $4,144 as the dollar and Treasury yields ease after the midterms.
The Bank of England is expected to raise rates to 4% at 6:00 AM CT; US jobless claims and productivity follow at 7:30 AM CT.
Friday's jobs report is the next big test for December Fed hike odds (71% as of Oct. 30 per CME FedWatch).