Morning Briefing
Published
Map: The Gulf and Hormuz, marking Strait of Hormuz, Riyadh
S&P 500 futures are roughly flat, with the SPY indicated up about 0.1% as markets weigh a deepening Gulf energy crisis against a dense slate of big bank and health care earnings.
The Strait of Hormuz disruption that dominated Monday has not resolved. Iran's Revolutionary Guard Corps reported a third supertanker hit in the strait, a container vessel was separately struck by an unknown projectile on its approach, and Riyadh's airport remains suspended after the weekend attacks, with Gulf Air canceling Riyadh flights through October 17 and Delta pushing its Atlanta-Riyadh route back to March 2027. Saudi forces intercepted additional missiles and drones near Riyadh overnight, and OPEC+ ministers say shipping and insurance costs tied to the disruption have reached unprecedented levels, with Fitch's base case now a durable reopening of the strait only by the first quarter of 2027. Despite that, both Brent and WTI futures are down roughly 2% this morning, a reversal from Monday's gains. On the Fed, Governor Hammack repeated Monday that policy isn't restrictive enough and that rates need to move higher, while Goolsbee flagged tariffs and oil prices as a stagflation risk and said AI itself is becoming an inflation problem. NFIB small business optimism for September came in at 97.9, below the 98.2 expected and down from 98.7 prior.
Technology is again the weak spot pre-market, led lower by memory and storage names: Western Digital, SK hynix, Seagate and Sandisk are all down sharply, while Marvell Technology and Arm Holdings also lag. Financials and Health Care are firmer, with UnitedHealth and Visa among the standouts after a strong UnitedHealth earnings beat.
Company News
- JPMorgan Chase posted Q3 EPS of $5.75, missing the $5.92 estimate, on revenue of $50.91 billion versus $51.65 billion expected; the bank guided full-year net interest income to about $106.2 billion.
- Goldman Sachs reported Q3 EPS of $17.01, well above the $15.05 estimate, on revenue of $18.68 billion versus $17.52 billion expected.
- Wells Fargo posted Q3 EPS of $1.87, a penny light, on revenue of $21.87 billion versus $22.61 billion expected, though ROTCE rose to 16.3%.
- UnitedHealth Group reported Q3 EPS of $4.69, beating by $0.50, on revenue of $112.69 billion, and raised full-year adjusted guidance to at least $20.50 per share.
- Albertsons reported Q2 EPS of $0.36 on revenue of $18.89 billion, pulled its fiscal 2026 outlook pending a business review, and separately is seeking $8 billion from Kroger over their failed merger; Kroger plans to cut about 3,000 corporate jobs, over 37% of its corporate workforce.
- Wells Fargo cut Adobe to underweight, lowering its price target to $225 from $270.
- Humana is forming a joint venture with BlackRock's HPS Investment Partners covering nearly 150 CenterWell clinics, with BlackRock acquiring a roughly $2.8 billion equity stake.
- IonQ agreed to acquire Elisity in an all-stock deal worth up to $1.3 billion.
Overseas Data
The Bank of Japan is reportedly unlikely to raise rates again this month, and BMW reported third-quarter deliveries of 551,072 units, down 6.3% from a year earlier.
France's central bank estimates third-quarter growth at 0.1%, unchanged from its prior estimate, and Barclays data show UK consumer spending rose 2.0% year-on-year in September, down from 2.1% in August.