Morning Briefing, October 22, 2026

S&P 500 futures point to a sharply lower open, with SPY down roughly 0.9%, as the Gulf security picture deteriorates faster than markets can price it. The Houthi-Saudi conflict has widened from military and energy sites to civilian airports and Aramco's Dhahran headquarters, forcing a halt at Riyadh's King Khalid International, while a drone strike on Aramco's Shaybah oilfield killed two people even as Saudi officials said operations continued. The State Department has ordered non-emergency staff and families out of Saudi Arabia and issued a wider Gulf alert, and the Houthis claim fresh strikes on Dammam Airport and Yanbu overnight. Iran's Revolutionary Guard says it is preparing to unveil a new weapon, while separate reporting says Washington has drawn up plans to strike Iranian energy infrastructure if combat resumes.

Against that backdrop, diplomatic tracks elsewhere are advancing. Russia has accepted a US proposal for trilateral talks with Ukraine, Zelenskiy has endorsed the idea, and the Kremlin has floated Abu Dhabi as a venue, with Washington separately accepting a technical-level meeting. Russia also released US citizen Stephen Hubbard. Iran's Pezeshkian says Tehran has no intention of starting a war, and Araghchi has left the door open to diplomacy given sincere US engagement, though Iran's Khuzestan representative insists any Hormuz reopening must be on Iran's own terms.

Technology is leading the premarket selloff, with semiconductor names hit hardest: Lam Research, IBM and Intel are all down sharply, and the Semiconductor ETF and iShares Semiconductor ETF are both off more than 3%. Energy is the only sector holding gains, with ExxonMobil, Chevron and Marathon Petroleum all higher. Consumer Staples is also firm on defensive buying, led by Procter & Gamble. Growth and momentum factors are underperforming value, and Asian tech-heavy regional funds, including Taiwan and South Korea trackers, are down more than 3%. Metals miners are also sliding alongside a nearly 2% drop in spot gold.

Company News

Meta Platforms reports adjusted EPS of $7.40, beating expectations, and guides fourth-quarter revenue to $73-76 billion, but shares are weighed down after a New Mexico judge ordered the company to pay $25 billion over Cambridge Analytica-related privacy claims; Meta also narrowed its 2026 capex outlook to $135-145 billion and plans a new nonvoting share class.
Texas Instruments beat with Q3 EPS of $2.62 and guided fourth-quarter revenue to $5.80-6.30 billion.
Lockheed Martin raised its 2026 sales, EPS and free cash flow guidance for a second straight quarter after Q3 EPS of $7.97 beat expectations, and separately signed a US deal for a minimum of 850 F-35 jets.
Honeywell Technologies raised full-year sales and EPS guidance after a Q3 beat.
Procter & Gamble beat on EPS and raised fiscal 2027 all-in net sales growth guidance, though it flagged a $1.4 billion commodity cost headwind.
Abbott Laboratories plans to spin off its roughly $8.5 billion Nutrition business into a standalone public company by the end of 2027.
Hexcel and Rollins both fell sharply premarket after disappointing quarters; Lam Research dropped despite beating on revenue as chip-equipment names gave back recent gains.
American Airlines and Southwest Airlines both posted smaller losses or beats than expected, with American guiding to continued record revenue growth despite elevated fuel prices.
Quest Diagnostics raised full-year guidance after a beat but disclosed unauthorized access to its Quanum LSM system affecting certain patient records.
DeepSeek raised $15 billion in financing at a $74 billion pre-money valuation, with CATL, Tencent and new backers including Stony Creek Capital participating.

Overseas Data

New Zealand's Q3 CPI rose 0.7% quarter on quarter, below the 0.8% forecast, while Japan's September machine tool orders rose 60.4% year over year, unchanged from the prior reading.

France's October business confidence rose to 97 from 96, above expectations, with manufacturing confidence climbing to 105. France's 10-year bond yield has risen above US Treasury yields for the first time since 2013, and its risk premium over Bunds widened to 176 basis points. Germany's 10-year yield fell to its lowest since September 4.