Iran strike report sends oil rebounding, European futures turn lower

Iran strike report sends oil rebounding, European futures turn lower
US stocks midday brief | Tuesday, 3 November 2026 (Hong Kong time; cash market close refers to Monday, 2 November, US Eastern time; European markets opened at 16:00 Hong Kong time and had been open for about half an hour at publication. Intraday cash-market gains were not yet available, so pre-open futures and Asian closing levels are used)

On Monday, the Dow rose 0.41% to 51983.98 points, the S&P 500 fell 0.51% to 7541.40 points, the Nasdaq fell 1.07% to 25164.32 points, and the equal-weight S&P ETF (RSP) rose 0.77% to $219.98 (Barron's). Before midday, S&P 500 futures were down about 0.1%, while pan-European STOXX 600 futures fell more than 1% (Reuters, republished) (Reuters). The 10-year US Treasury yield was about 4.89% (Monday's closing level), WTI crude was about $96.6 per barrel, Brent was about $104.8 per barrel, spot gold was about $3955 per ounce, and the US dollar index was about 101.8 (Barron's) (Reuters, republished) (Bloomberg, republished).

Market focus
The midday market narrative changed within hours: Monday's story of “progress in talks, oil down 8%, and a breather for risk assets” had become Tuesday's “strike report, oil rebound, and European futures turning lower” by midday. The market is trading not oil itself, but whether the talks can continue. The Wall Street Journal, citing US officials, reported that US forces struck Iran's Qeshm Island at the mouth of the Strait of Hormuz. Reuters said Europe's benchmark stock index was set to fall before the open, with STOXX 600 futures down more than 1% and German DAX and Spanish IBEX futures down about 1% (Reuters, republished) (Reuters). That means half of the “peace premium” reflected in Monday's oil decline is being unwound. At the same time, Apple's after-hours decline and the Nasdaq 100's entry into a technical correction are weighing on technology stocks. The midday market faces both renewed geopolitical uncertainty and an AI valuation reckoning; tonight's JOLTS data and after-hours chip earnings are the next tests that will decide whether the rebound continues or prices keep falling.

I. Futures and Europe: US futures weaken, Europe points to a sharp drop at the open

• US stock futures were broadly weaker on Tuesday. Reuters reported during Asian trading that S&P 500 e-mini futures were lower for a fourth straight day, down about 0.1%; European futures fell 0.9%, German DAX futures fell 0.8%, and UK FTSE futures fell 0.2% (Reuters, republished). Reuters' European premarket report added that STOXX 600 futures fell more than 1%, while DAX and IBEX futures were down about 1% (Reuters). The larger futures losses in Europe than in the US indicate that geopolitics is the primary source of midday pressure, followed by technology stocks. Europe is closer to oil price and shipping risks, and its losses are more direct.
• Asian closing levels had already illustrated a pattern of “technology dragging, with mixed performance elsewhere.” Bloomberg's market roundup said the MSCI Asia Pacific Index fell 0.6%, South Korea's KOSPI fell more than 2% with Samsung and SK Hynix the biggest drags, and China's CSI 300 fell 0.1%, although China's central bank said it would encourage financial institutions to make greater use of stock market support tools (Bloomberg, republished). Reuters reported during Asian trading that Japan's market was closed for a holiday and the MSCI Asia Pacific ex-Japan Index fell 1.4% to its lowest level since 23 October (Reuters, republished). Asia's decline followed the same pattern as Monday's US market: chips and technology fell, while markets supported by local news held up. This is not broad panic, but the same AI reckoning moving on to another market.
• The midterm elections are another uncertainty ahead of tonight's US market open: Americans vote Tuesday to determine control of Congress, with the first results due to emerge early Wednesday morning Hong Kong time (Reuters, republished). The election itself will not produce a final result tonight, but it determines the answer to the oil-price question of whether strikes will resume after the election. Until the results are in, oil and futures can only price in a shifting news flow.

II. Bonds, the dollar and commodities: oil rebounds but remains below prior levels; gold steady, dollar flat

• Oil rebounded modestly Tuesday but remained far from recovering Monday's losses. Reuters reported that WTI rose about 0.21% to $96.66 per barrel and Brent rose about 0.03% to $104.8 per barrel. Bloomberg said Brent was around $104.77 per barrel and WTI around $96.64 per barrel at midday Singapore time; the two fell 7.6% and 7.4%, respectively, on Monday (Reuters, republished) (Bloomberg, republished). A rebound of only a few tenths of a percentage point is merely a technical bounce against Monday's decline of more than 7%. The market has not fully restored its bet on a “war premium” after one strike report; it is waiting for the next word on negotiations.
• The signals from the talks remain mixed. Bloomberg said Iran's president reported that the supreme leader had granted the government greater negotiating authority, and Trump also suggested progress in the talks. Tehran, however, said contacts between Iran and the US were continuing, after earlier talks with Qatari mediators revised a proposal but produced no breakthrough (Bloomberg, republished) (Reuters, republished). “Having authority to negotiate” and “reaching a deal” are different things: Monday's oil decline reflected hope from the former, while Tuesday's rise was a reminder that the latter has yet to materialize.
• Bonds and gold did not move sharply alongside oil on Tuesday. The 10-year US Treasury yield stood around 4.89% on Monday, gold was around $3955 per ounce and retained its rebound from a one-year low, and the US dollar index was around 101.8, broadly flat (Barron's) (Bloomberg, republished). Gold holding up, yields not jumping and the dollar staying flat suggest that the midday market has yet to price in either renewed inflation or a broad flight to safety. It is holding its position amid geopolitical news and technology stock moves, awaiting tonight's data and earnings.

III. Stocks and sectors, including earnings: Apple's gross-margin guidance weighs on markets; chip supply chain in focus tonight

• Apple and Palantir both fell after hours, directly adding to midday pressure on technology stocks. The Wall Street Journal's after-hours watch said Apple's after-hours trading was volatile and Palantir fell about 1.3%; Reuters' European premarket report said Apple's weak gross-margin forecast for the crucial holiday season was linked to rising memory chip costs and was weighing on risk appetite (The Wall Street Journal) (Reuters). Better-than-expected earnings followed by an after-hours decline reflect the same standard applied to Intel last week: weak guidance is punished severely. The market is judging not the past quarter, but whether next quarter's gross margins and orders can keep up.
• European stocks were also being driven by oil prices. Reuters reported that Lufthansa on Tuesday cut its 2026 operating profit forecast to 1.7 billion–2 billion euros from 1.7 billion–2.2 billion euros because of higher jet fuel costs, although third-quarter operating profit of 1.4 billion euros was broadly in line with expectations. Bayer was poised to lead gains after raising its 2026 profit forecast (Reuters) (Reuters). Lufthansa's decline and Bayer's rise illustrate the two sides of oil price swings: higher oil prices directly erode airline profits, yet do not prevent companies in other industries from raising guidance. Europe's midday losses therefore look more like a combination of energy and technology pressures than a deterioration across the entire market.
• The chip supply chain is next after tonight's close: AMD, Arista and Super Micro are due to report after hours early Wednesday morning Hong Kong time, with markets closely watching data center demand and next-quarter guidance (Barron's). With the Philadelphia Semiconductor Index down 12% over three days and the Nasdaq 100 in a technical correction after falling 10% from its October high, tonight's three reports will answer not whether AI demand exists, but whether that demand justifies current prices. That is the question already posed by Apple and Palantir's after-hours moves.

IV. AI news: Nasdaq 100 enters correction, Anthropic adds to the bill

• The correction is already a fact, not a warning. Bloomberg's market roundup said a gauge of US chip stocks fell 12% over three days, while the Nasdaq 100 entered a technical correction after falling 10% from its October high. The sharp fall in oil has so far failed to reverse selling pressure on technology stocks, with concerns about AI spending and excessive valuations still the reason (Bloomberg, republished). Falling oil prices and easing geopolitical tensions have not rescued technology stocks, indicating that the force behind this correction lies within the AI bill, not external shocks. External shocks can change the pace, but not the direction.
• Anthropic's revised prospectus added another item to the bill. CNBC reported that Anthropic's third-quarter revenue increased about 12-fold year over year, while it disclosed more than $895 billion in commitments related to computing capacity and infrastructure over the coming years (CNBC, republished). Revenue up 12-fold and $895 billion in commitments in the same filing capture the equation troubling markets: demand growth is real, and so is the future computing bill. Guidance from AMD and Arista tonight will determine which side the market believes first.
• European AI stocks are also under pressure. Reuters' European premarket report said AI-related stocks including Aixtron, ASML and Schneider Electric could face pressure against the backdrop of early selling in Asian markets (Reuters). The AI reckoning is no longer confined to US stocks: from memory chips in Seoul to equipment and electrical stocks in Europe, names along the same supply chain are being repriced on the same day.

V. Calendar ahead (Hong Kong time)

• 3 November (Tuesday): Voting in the US midterm elections; 23:00: US JOLTS job openings for September; after the close (early morning 4 November Hong Kong time): AMD, Arista and Super Micro report earnings (Barron's).
• 4 November (Wednesday): US Treasury announces its quarterly refunding plan; US ISM services PMI for October; McDonald's and Qualcomm report earnings (Barron's).
• 5 November (Thursday): Airbnb reports earnings.
• 6 November (Friday), 21:30: US nonfarm payrolls report for October (Bureau of Labor Statistics), the week's key economic release; Moderna reports earnings.
• Note: The US has moved to standard time. Regular US stock market hours correspond to 22:30 through 05:00 the next day in Hong Kong.
• Intraday European cash-market gains were not yet available for this edition; the evening brief will use closing levels.