Morning Briefing
Published
S&P 500 futures point to a firmer open, up 0.5%, with semiconductors doing the heavy lifting even as the Middle East backdrop deteriorates further overnight. Explosions hit Jeddah with flights suspended at King Abdulaziz Airport, a Saudi helicopter crashed near the Yemen border killing two crew, and Saudi forces intercepted missiles and drones aimed at major facilities as attacks on shipping through Bab el-Mandeb pushed Brent toward $110 a barrel. Iran's foreign minister said the Strait of Hormuz could reopen within six days if US conditions are met, while Iran's Revolutionary Guard warned that even limited US action would trigger a global energy crisis. Despite that, the VIX is down sharply and risk appetite looks constructive, a divergence worth watching into the open.
On the diplomatic front, Trump says "great progress" is being made on Russia-Ukraine talks but he won't sign any document now for fear of driving Moscow from the table, and is separately floating a return of large-scale Russian gas flows to Europe as part of a peace framework, an idea European officials are treating with skepticism given the EU's 2027 target to eliminate Russian gas. Zelenskyy accuses Washington of pressuring Kyiv into concessions, citing delayed Patriot deliveries and eased sanctions enforcement, and is offering to halt refinery strikes in exchange for more interceptors. Separately, Putin has asked for a meeting with Trump and Xi, according to the Wall Street Journal. In France, the prime minister says he is resolved to restore order after weekend unrest and could declare a state of emergency if needed, a backdrop that pushed the euro down 0.4% and weighed on French bond futures.
Chipmakers are leading the tape, with Technology up 1.6% and semiconductor-related ETFs sharply higher; Lam Research, KLA and Applied Materials are all up more than 3.5%. Growth and momentum factors are outperforming broadly, while Dividend Aristocrats and the dividend ETF lag. Energy is the weakest sector even with crude pressured by the regional turmoil. Airlines are higher despite a threat against a Tel Aviv-Vienna flight that diverted to Sofia.
Company News
- Fifth Third Bancorp reported Q3 EPS of $1.13, beating estimates by $0.16, though revenue of $3.28 billion missed the $3.41 billion expected; the bank did not repurchase shares during the quarter.
- Cleveland-Cliffs posted Q3 EPS of $0.28, ahead of estimates, and guided fourth-quarter adjusted EBITDA to roughly $715 million and 2027 EBITDA above $4 billion, while idling galvanizing lines at its Stelco operations in Canada.
- Goldman Sachs upgraded CoreWeave to buy with a $106 price target, and neocloud names are broadly higher premarket, with CoreWeave, Nebius and Iren all up 5% or more.
- Transocean secured roughly $550 million in combined contract backlog for two ultra-deepwater drillships in the U.S. Gulf.
- KKR is selling Infinity Transportation to Ares for approximately $2.9 billion, per the Wall Street Journal.
- JPMorgan Chase CEO Jamie Dimon pledged to finance $230 billion in national-security related initiatives in the program's first year.
- Merck KGaA agreed to acquire Silence Therapeutics for $20 per ADS in cash.
- Uber won a bid to dismiss £340 million lawsuits brought by London black cab drivers.
Overseas Data
China's third-quarter GDP rose 4.5% year on year, above the 4.4% expected, while September retail sales beat sharply at 1.1% versus 0.5% expected and industrial production matched expectations at 5.5%. The data is helping drive gains in China-linked names, with South Korea's EWY up more than 5% and SK hynix up over 4%.
The People's Bank of China said it will launch a liquidity support tool for large-scale redemptions by non-bank institutions and is studying a shift of its main open-market operation tenor to overnight to sharpen rate precision.