S&P 500 futures are little changed, up about 0.1%, as markets weigh a sharp overnight escalation in the Strait of Hormuz against the risk-on tone that carried Wednesday's midterm-driven rally. Iran's Revolutionary Guard claims two tankers and a tugboat caught fire in the strait, UKMTO reported a tanker struck by projectiles north of Qatar, and Iran's navy says a separate tanker hit a mine east of the waterway. Despite this, futures show no broad flight from risk.

The Wall Street Journal reported that the US military conducted covert strikes inside Iran in recent weeks that the administration chose not to publicize before Tuesday's midterms, in which Democrats won control of both chambers. Crude remains well off its highs after Wednesday's collapse, with WTI having settled down more than 8% and Brent off roughly 10% to near $93 a barrel on expectations that US-Iran talks are progressing, with clarity expected Friday. Yemeni missile attacks reportedly hit Yanbu, Saudi Arabia, though Saudi Civil Defense says the danger there has passed. The Bank of England raised its policy rate a quarter point to 4%, voting 8-1 with one dissent for a larger half-point move, warning that UK inflation could approach 5% by mid-2027 and that second-round effects from the energy shock have risen.

Sector moves are wide pre-market. Financials lead at +1.3%, broad-based across banks and insurers. Technology is the weakest group at -1.7%, dragged by Qualcomm's 10.1% slide after its Q4 report, alongside broad semiconductor weakness. Consumer Discretionary is roughly flat as Expedia falls 7.9% despite raising guidance. Health Care gains 1.0%, helped by Edwards Lifesciences and Zoetis, while Industrials are little changed as Parker-Hannifin jumps 6.6% on raised guidance and Rockwell Automation falls 7.4% despite beating estimates. Among single names, AppLovin extends its surge to nearly 20%, while Fair Isaac, Arm Holdings, Sandisk and Mercado Libre are among the weakest performers.

Company News

• Qualcomm beat Q4 estimates but guided cautiously for fiscal Q1; it reiterated a $5bn fiscal 2027 data center revenue target.
• AppLovin posted Q3 EPS of $4.30, beat revenue estimates, and raised its buyback authorization by $3.2bn.
• Tapestry raised fiscal 2027 revenue and EPS guidance after a strong fiscal Q1.
• Parker-Hannifin raised its fiscal 2027 outlook across sales, margin, EPS and free cash flow.
• Cigna raised its full-year adjusted income outlook after a Q3 beat.
• ConocoPhillips beat estimates and raised its dividend 11%.
• Viatris raised 2026 guidance and agreed to acquire Pacira BioSciences for $36.50 a share, valuing it at $1.65bn.
• DTE Energy agreed to sell its DTE Vantage business for roughly $3bn to investors advised by J.P. Morgan Asset Management.
• Mercado Libre's Q3 revenue missed expectations, with operating income down 6% year over year.
• Becton Dickinson beat Q4 estimates but guided to only low single-digit fiscal 2027 revenue growth.

Overseas Data

Asia-Pacific equities opened mostly higher after Wednesday's US rally and the pullback in oil. Australia's September trade surplus widened to AUD 2.83 billion, well above the AUD 1 billion expected. Bank of Japan minutes showed members favoring continued rate increases as inflation nears target.

In Europe, German factory orders rose 4.4% month over month in September, just shy of the 4.5% expected. Eurozone producer prices jumped 11.1% year over year in September, above the 10.6% expected, reinforcing hawkish commentary from ECB officials who flagged a "rather big chance" of a December hike.

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