The companies that build the boxes, wire the racks and cool the halls are having a better morning than the companies that rent out the computing. Celestica, the Canadian contract manufacturer that assembles servers and networking gear for the biggest cloud groups, is up about 13% in pre-market trading after a quarter that beat on every line and a 2027 forecast well above what Wall Street had pencilled in.
That matters because October has been rough on the AI build-out trade. Neoclouds such as CoreWeave and Nebius have each lost more than a third of their value this month as investors asked who actually pays for all this capacity. Today the answer from the supply chain is simple: the orders are still arriving, and the customers are already talking about 2028.
The Situation Right Now
US stock futures are modestly higher about 90 minutes before the 13:30 UK cash open. S&P 500 futures are up around 0.2%, Nasdaq 100 futures about 0.3% and Dow futures around 0.2%, after a Monday session in which the S&P 500 rose 0.7% to 7,676.77 on the back of Anthropic’s listing plans. The VIX, Wall Street’s fear gauge, has eased below 18.
The backdrop is a waiting room. The Federal Reserve begins its two-day meeting today, with a decision due on Wednesday evening UK time and markets expecting rates to be held at 3.75% to 4.00%. The 10-year Treasury yield sits just under 5%, close to where it has hovered for days, so bonds are not adding pressure but they are not offering relief either.
What Changed Since This Morning?
The mood has firmed. At 05:00 UK, Nasdaq futures were slightly lower; they are now up around a third of a percent as the earnings flow has come in better than feared. The dollar has edged up against the euro, which slipped to about 1.1145 as French borrowing costs climbed again, while Treasury yields are barely changed. In London, the FTSE 100 is down about 0.7%, weighed down almost entirely by HSBC after its revenue missed forecasts.
The Biggest US Market Story: The Supply Chain Says the AI Spending Is Real
Celestica reported third-quarter revenue of $5.83 billion, up 83% from a year earlier, against forecasts of around $5.47 billion. Adjusted earnings per share more than doubled to $3.30. The headline that moved the stock was the outlook: the company now expects about $40 billion of revenue in 2027, roughly 90% more than this year and comfortably above the consensus near $35.7 billion. Its chief executive described the current period as an AI infrastructure supercycle and said customer forecasts for 2028 are meaningfully higher again.
There is a catch worth noticing. Celestica cut its free cash flow forecast for this year to $460 million from $600 million because it needs to put more money into stock and working capital to meet next year’s demand. Growth is being bought with cash today, which is the same question investors have been asking of the hyperscalers and neoclouds all month.
Johnson Controls adds a second voice from a different corner. The building systems group, which supplies cooling and power management to data centres among others, reported organic orders up 44% and a record backlog of $23 billion. Its shares are up nearly 4% before the open. Broadcom, AMD and Nvidia are each modestly higher alongside.
Stocks Moving Before the Open
Outside AI hardware, the results season is doing its job. SoFi Technologies is up around 9% after record revenue of $1.4 billion and higher guidance for this year and next. UPS is up about 1.5% after beating on earnings and revenue and lifting its full-year outlook. JetBlue is up roughly 11% after revenue rose 21%, despite fuel costs that were 57% higher than a year ago. Royal Caribbean, S&P Global, TransUnion and Polaris are all firmer after their numbers.
It is not one-way traffic. Hilton is down close to 5% and Sherwin-Williams more than 3% after their results, while HSBC’s US-listed shares are off nearly 7%, following the London sell-off. PayPal, which reported this morning, is slightly lower after falling more than 3% on Monday.
FX and the Dollar
The dollar index is up about 0.25% at 102.2. The euro is the weak link, trading near 1.1145 as French 10-year yields rise towards 5%. Sterling is steadier at about 1.332 ahead of Wednesday’s Budget, and the yen is weaker at around 157.8 per dollar. With the Fed and the ECB both meeting this week, currency traders are reluctant to take big positions against the dollar.
Bonds
The US 10-year yield is around 4.97% and the two-year near 4.70%, both slightly lower on the day. UK 10-year gilts trade near 5.33% the day before the Chancellor speaks. The level that matters is 5% on the US 10-year: a clean break higher after the Fed would test the case for paying up for long-dated growth stories, AI included.
Commodities
Brent crude is down about 1% near $114.70 a barrel and West Texas Intermediate around $101, still elevated but cooling. Gold is holding just above $4,000 an ounce, while silver is down nearly 2%. Copper is up about 1%, which fits the theme of the day: the metal that goes into power lines and data centres is behaving better than the precious metals.
Today’s Remaining Catalysts
US durable goods orders arrive at 12:30 UK, followed by Conference Board consumer confidence at 14:00 UK. After the US close, Visa, Robinhood, NXP Semiconductors, Enphase and Baker Hughes report. The bigger events sit later in the week: the Fed decision and the UK Budget on Wednesday, Alphabet’s results on Wednesday evening and the ECB on Thursday.
Levels Traders Are Watching
On the S&P 500, Monday’s close at 7,676.77 is the first reference; holding above it after the open keeps the recovery intact. On bonds, 5% on the US 10-year remains the line in the sand. On the dollar, 1.11 on EUR/USD is the next round number if French worries deepen. For Celestica, the question is whether a gap of this size holds through the first hour, or whether investors take the chance to sell into strength after a difficult month. These are reference points, not targets.
Where This Leaves Traders
The bias going into the open leans cautiously positive. The evidence is that the companies closest to the physical AI build-out are reporting orders and backlogs that rise rather than fade, and that the wider earnings season is mostly delivering beats. The opportunity is in understanding who in the chain gets paid first: suppliers with order books are being rewarded, while businesses that depend on raising fresh money to fund capacity are still being questioned. The risk is that this is a relief rally inside a tough month, and that a hawkish tone from the Fed on Wednesday pushes the 10-year above 5% and reopens the valuation argument. A failure to hold Monday’s S&P close, or Celestica giving back most of its gain, would weaken the view.
Markets to watch today are the Nasdaq 100, the US 10-year yield, EUR/USD and copper. For anyone newer to markets, the lesson is that a theme as big as AI does not move as one block; reading the supply chain separately from the spenders often gives a clearer signal than the headline names. If you want to see how your own trading decisions measure up against that kind of thinking, the Samuel & Co Trading Trader Assessment is a sensible next step.
