Morning Briefing
Published
Map: The Gulf and Hormuz, marking Strait of Hormuz
S&P 500 futures are little changed, holding flat after Tuesday's Nasdaq 100 record close, as an attack on a cargo vessel in the Strait of Hormuz overnight complicates the diplomatic progress traders had been leaning on. The UK Maritime Trade Operations center confirmed the vessel was struck by an unknown projectile and caught fire, with all crew evacuated and two injuries reported, just hours after US envoy Steve Witkoff described "productive" talks with Iran's delegation at the UN as showing momentum toward a deal.
Iran's foreign minister Araghchi told Witkoff that reopening the Strait hinges on lifting the US naval blockade, releasing frozen Iranian assets, and ending the conflict on all fronts, conditions Tehran calls non-negotiable. WTI, which settled at $94.59 Tuesday, fell to $89.60 after hours on hopes for more Gulf supply before this morning's attack, while Brent held near $99. Treasury yields continue to climb, with the 2-year hitting a fresh year high of 4.79%, and the White House is weighing a ban on diesel exports as prices rise, a move oil industry allies reportedly view as a worst-case outcome.
Precious metals are sharply lower, with spot gold down nearly 1% and silver off 3%, pressuring gold and silver miner ETFs. Materials is the weakest sector in premarket trading, dragged by Albemarle and Newmont, while Ecolab is a standout gainer. Airlines (JETS) are firm and uranium (URA) and semiconductors (SOXX) are soft. Voyager Technologies extends its selloff after Tuesday's double-digit decline.
Company News
- Royal Caribbean Cruises agrees to acquire a 50% stake in Sandals and Beaches Resorts for roughly $3.0 billion, backed by committed financing from Morgan Stanley, with closing expected in early 2027.
- KB Home beat Q3 EPS expectations at $1.05 but flagged weakening housing demand as mortgage rates pressure affordability, and issued fourth-quarter delivery guidance below prior levels.
- General Mills posted Q1 EPS of $0.75 on $4.39 billion in revenue and reaffirmed its fiscal 2027 outlook, including adjusted EPS of $3.00 to $3.20.
- McDonald's unveiled new margin and growth targets tied to its "NEXT" strategy, including $8.5 billion in franchisee support through 2036.
- Goldman Sachs is reportedly in talks to acquire credit firm Palmer Square, which holds $37 billion in assets.
- UBS said proposed capital rules requiring up to $17 billion in additional capital are excessive after a Swiss parliamentary vote.
- CoreWeave closed a $4.2 billion convertible note offering to fund general corporate purposes.
Overseas Data
Germany's September composite PMI jumped to 53.8, well above the 51.8 expected, lifting the DAX. The UK's September services and composite PMI both slipped to 51.7, below the 52 forecast.
ECB's Makhlouf said the central bank isn't yet seeing second-round inflation effects from energy costs but would act if they emerge, adding he is uncomfortable with the ECB's current outlook for inflation above 3%. Bank of America now expects the Bank of England to hike rates 25 basis points in November and again in February 2027, reversing its prior call for steady rates into a 2027 cut.