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Goldman Sachs (GS) reported third-quarter earnings that were better than analysts expected Tuesday morning, continuing a stretch of strong big bank earnings kicked off last week by rivals JPMorgan Chase (JPM) and Wells Fargo (WFC).

The shares edged higher in early trading after the firm reported $12.7 billion in total revenue, above the $11.82 billion Goldman reported a year ago and ahead of analysts' consensus as compiled by Visible Alpha.

Net interest income (NII) came in at $2.62 billion, up from $1.55 billion a year ago and better than the $1.95 billion analysts had projected. Goldman's profits came in just shy of $3 billion, nearly half a billion better than analysts expected and up from $2.06 billion in the third quarter of 2023.

The KBW Banking Index (BKX) was recently up 0.4%.

Goldman reported Tuesday alongside Bank of America (BAC), which also surpassed estimates. On Friday JPMorgan turned in estimate-beating results, while Wells Fargo saw profits drop less year-over-year than analysts had expected.

The financial-sector results come weeks after the Federal Reserve cut interest rates for the first time in four years. Analysts have said the first rate cut, and others likely to come in the next year, could help boost future bank earnings by lowering deposit costs and sparking activity like mergers and acquisitions.

Goldman Sachs shares are up over 35% this year through Monday's close.

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Bank of America (BAC) reported third-quarter results above analysts' estimates Tuesday morning, as revenue rose year-over-year and profit fell by a smaller amount than expected.

The company reported $25.34 billion in revenue, above last year's $25.17 billion and the $25.28 billion consensus projection of analysts compiled by Visible Alpha. The key banking metric of net interest income (NII) came in at $13.97 billion, down from $14.38 billion a year ago but better than the $13.85 billion expectation.

Bank of America posted profit of $6.90 billion, or $0.81 per share, down from $7.8 billion and $0.90, respectively, the same time last year. Analysts were expecting a larger drop to $6.45 billion, or $0.75 per share.

Bank of America shares rose by more than 1.5% in morning trading soon after the report. The company's shares are up roughly 25% through Monday's close. The KBW Banking Index (BKX) was recently up 0.4%.

Big bank earnings season kicked off last Friday, with JPMorgan Chase (JPM) and Wells Fargo (WFC) reporting better-than-expected third-quarter results, which helped Bank of America shares rise 5%. They are up almost 25% year-to-date through Monday's close.

The earnings reports come less than a month after the Federal Reserve cut interest rates for the first time since 2020. Analysts have said the cuts should boost bank earnings in future quarters as deposit costs fall and mergers and acquisitions (M&A) activity picks up.

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Stock futures are little changed Tuesday, a day after the Dow and S&P 500 set fresh record highs and investors await a slew of corporate earnings reports; shares of chipmakers Nvidia (NVDA), Advanced Micro Devices (AMD), and Intel (INTC) are dropping on a report that U.S. regulators are looking to curb sales of artificial intelligence (AI)-enabled chips to some Middle East countries; Bank of America (BAC) third-quarter earnings come in ahead of estimates; Alphabet's (GOOGL) Google says it will back construction of small nuclear plants by a startup in a bid to meet AI power demands; and Apple Q3 smartphone sales grow following its iPhone 16 release. Here's what investors need to know today.

U.S. stock futures are little changed Tuesday, a day after the S&P 500 and Dow Jones Industrial Average set fresh record highs as tech stocks helped lead gains. After several big banks reported better-than-expected earnings last week, investors will get another slate today, including from Citigroup (C) and Goldman Sachs (GS). Bond markets will return to trading today after being off for the Columbus Day federal holiday Monday.

After hitting an all-time closing high yesterday, shares of Nvidia (NVDA) are pulling back less than 1% in premarket trading after a report that the U.S. is weighing curbs on exports of artificial intelligence (AI) chips to some countries. The sales cap would likely be targeted toward countries in the Middle East and comes as U.S. regulators are working to ease the licensing process for shipments to data centers in that region, the report said. The news sent shares of other chipmakers lower as well, including Advanced Micro Devices (AMD) and Intel (INTC).

Bank of America (BAC) shares are rising more than 2% in premarket trading after it reported third-quarter results above analysts' estimates. The lender posted $25.34 billion in revenue, above last year's $25.17 billion, and profit that fell to $6.90 billion from $7.80 billion—a smaller drop than the consensus projection of analysts compiled by Visible Alpha. Bank of America joined rivals JPMorgan Chase (JPM) and Wells Fargo (WFC) in reporting better-than-expected Q3 results.

Alphabet's (GOOGL) Google said it would back the construction of nuclear power plants as the tech giant looks for power sources for its AI services. Google will buy power from startup Kairos Power, which is planning to generate 500 megawatts of power, with the reactor slated to be online by 2030, followed by others through 2035. The arrangement comes as tech firms search for additional energy sources to power AI data centers, with Microsoft (MSFT) recently announcing it would restart a reactor at Pennsylvania's Three Mile Island to help meet power needs. Google shares are rising less than 1% in premarket trading.

Sales of Apple (AAPL) smartphones rose in the third quarter following the release of its AI-enabled iPhone 16 last month, according to a report from International Data Corporation. Industry tracking data showed that iPhone sales were higher by 3.5% year-over-year, with sales strong for both older models and the latest iPhone release, with the company maintaining a steady market share of 17.7%, IDC said. Apple's 56 million worldwide shipments weren't enough to make it the top seller, though, as Samsung delivered 57.8 million phones to capture 18.3% of the smartphone market. Apple shares are about 1% higher in premarket trading.

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Major U.S. equities indexes moved higher in the first session of the new trading week as tech gains helped pushed major indexes to new highs, with earnings season set to pick up steam later in the week.

The S&P 500 advanced 0.8% on Monday, adding to the benchmark index's all-time high Friday for a second straight record close. The Dow was up 0.5%, closing above the 43,000 level for the first time, and the Nasdaq gained 0.9%.

Shares of power generator Vistra (VST) jumped 5.6% on Monday to notch the best daily performance of any S&P 500 constituent after BNP Paribas initiated coverage on the stock with an "outperform" rating. BNP also established a price target of $230 on Vistra shares, representing upside potential of around 74% from Monday's close. Vistra surpassed Nvidia (NVDA) last month as the S&P 500's top performer for 2024, riding a wave of enthusiasm around the company's opportunity to provide nuclear-generated power for artificial intelligence (AI) data centers.

It was also a strong day for semiconductor stocks, with shares of AI darling Nvidia reaching an all-time high after several bullish comments from Wall Street analysts. Citi analysts said yesterday Nvidia is “still king” when it comes to its client base in the AI accelerator market, and that its GPU sales to hyperscalers like Alphabet's (GOOGL) Google and Microsoft (MSFT) could double this year.

Shares of Amentum (AMTM), which began trading last month following a spinoff from the engineering and construction firm Jacobs Solutions (J), were up 5.5%. The gains on Monday came after Truist initiated coverage of Amentum shares with a "buy" rating and $31 price target, suggesting over 9% upside as the company could outperform cost-savings forecasts.

Shares of discount retailer Dollar General (DG) dropped 3.3%, marking the heaviest losses in the S&P 500 on Monday. Investment management firm Heartland Advisors published a report pinpointing Dollar General as one of the weakest-performing stocks in its midcap value fund during the third quarter. Shares of competitor Dollar Tree (DLTR) ended the session 3.1% lower.

CrowdStrike Holdings (CRWD) shares sank 3%. The downturn reversed a portion of the strong gains posted by the stock last week after RBC Capital analysts included CrowdStrike stock among their top picks in the software space, contending that the cybersecurity firm is successfully navigating the fallout from an incident in July when a malfunctioning software update caused extensive tech outages. However, CrowdStrike still faces potential repercussions from the incident. In its earnings report released last week, Delta Air Lines (DAL) cited the negative impact of the outage and said the carrier continues to seek compensation from the cybersecurity firm.

Arch Capital Group (ACGL) shares slipped 2.9% after the specialty insurer announced a shakeup of its executive team. The company tapped Nicolas Papadopoulo to step into the chief executive officer (CEO) role and join the board of directors, effective immediately. Papadopoulo takes the reins from retiring CEO Marc Grandisson, who held the position since 2018.

Shares of lithium producer Albemarle (ALB) fell 2.4% on Monday. The British-Australian mining giant Rio Tinto (RIO) announced last week that it would acquire Albemarle competitor Arcadium Lithium (ALTM) in an all-cash deal worth $6.7 billion. Albemarle was reportedly on Rio Tinto's radar as a potential takeover target before the multinational miner decided on Arcadium.

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Federal Reserve Governor Christopher Waller is preparing for three scenarios that might affect the central bank’s monetary policy choices—but no matter which one might occur, he expects lower interest rates in 2025. 

“Whatever happens in the near term, my baseline still calls for reducing the policy rate gradually over the next year,” Waller said in prepared remarks released in conjunction with an appearance Monday.

His remarks come after the Fed cut its key federal funds rate for the first time since 2020 in September and ahead of its next policy meeting in early November.

Since the policy committee's last meeting, data showed more jobs were created than economists expected and food prices pushed inflation higher than analysts' projections in September. Both are important to central bankers as they decide how to balance their dual mandate of promoting employment and taming inflation through rate cuts.

While the Fed cut rates by half a percentage point last month, Waller thinks differently about what should be next for rates.  

“I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting,” Waller said. 

Waller thinks there are three economic possibilities moving forward:

Traders are pricing in an 86% chance that the Federal Reserve will cut the fed funds rate by a quarter of a percentage point at its November meeting, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

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Hims & Hers Health (HIMS) shares surged Monday after the Food and Drug Administration (FDA) said compounding pharmacies could continue to produce copycat weight-loss drugs while it reconsiders whether there is a shortage of their active ingredient.

The FDA is facing a lawsuit after it ruled earlier this month that Eli Lilly’s (LLY) popular weight-loss treatments Mounjaro and Zepbound were no longer on its shortages list. The agency allows companies like Hims & Hers to produce compounded copycat drugs when the originals are hard to obtain, allowing them to benefit from the demand for obesity treatments. 

In a court filing Friday, the FDA said it would not take action against companies that are in violation of its decision last week while it reconsiders the matter. The suit was filed by the Outsourcing Facilities Association, a trade association representing compounding pharmacies.

Shares of Hims & Hers gained nearly 10% to close at $20.50 Monday. The stock has more than doubled in value since the start of the year.

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