The overnight Qeshm Island strike that complicated Monday's oil-driven relief rally has given way to a full-blown diplomatic whipsaw, with no resolution in sight. Iran's IRIB rejected reports of a deal, and Mohsen Rezaei of the Supreme National Security Council said Washington's response to Tehran's seven conditions was not convincing, with the Strait of Hormuz staying closed until the US fully answers them. Yet Qatar says it still sees hope for an interim agreement as mediators exchange proposals, and the US has approved a Qatari-drafted memorandum of understanding; separate sources say Iran may offer a nuclear concession in exchange for the release of frozen funds. Adding to the uncertainty, the New York Times reports the US military is preparing for a possible new strike on Iran as early as Wednesday, pending Trump's approval, while Israel has told Washington that Iran may be weighing chemical weapons, a claim US officials are split on believing.

Trump's own remarks have muddied things further. He told Fox News he is not seeking mass casualties in Iran and called the overnight strike limited, but also said the US will end military aid to Israel, tying the move to a deal made with Netanyahu and criticism from the left. Israeli officials say they were caught off guard, and reports note the $3.8bn in annual aid had been built into Israel's 2027-2028 defense budget.

Earnings are driving sharp individual moves. Fabrinet jumps 16.6%, Neurocrine Biosciences 15.8% on raised INGREZZA guidance, Fiserv 13.6% after lifting its Project Elevate savings target to $1bn, Revvity 10.5%, and DuPont 9.1% after raising its full-year outlook. On the other side, Gartner falls 14.1% despite beating estimates, as the market focuses on its revenue miss, Sysco drops 9.0% after narrowing full-year sales growth to the low end of its range, Thomson Reuters falls 7.3%, Zebra Technologies slides 7.2% on in-line guidance, and Builders FirstSource is off 6.4%.

Elsewhere, Energy Secretary Wright says the US is pulling more refined product out of the Arabian Gulf and India, Anthropic is touting Claude's chip-design speed ahead of its IPO, and the September JOLTS report showed 7.523 million job openings.

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