US strike raises oil prices, Apple’s margin outlook puts pressure on tech

Hello, this is Leonie Kidd from today’s Morning Squawk.

Investors will need to divide their attention today.

Meanwhile, Apple will put pressure on the tech sector after its disappointing margin outlook overshadowed solid earnings.

However, following Iran’s surprise attack on Qeshm Island, crude oil prices have accelerated their rise through night trading, and crude oil trading has become heated.

And of course, it’s midterm day!

Nervousness over AI stocks is also spreading to trade in Asia, with the tech-heavy markets of South Korea and Taiwan both plummeting, and semiconductor stocks across Europe also falling. of Nasdaq-100 The stock closed Monday in correction territory, more than 10% below its record high set on October 6th.

Futures are trading sideways, but it will be another unpredictable session due to increased activity in the oil market and ongoing midterm voting.

Analysis: Futurum Group’s Daniel Newman told CNBC that the next phase of AI trade won’t depend on profits, saying, “A ceasefire could do more for AI trade this month than any earnings report. Lower oil prices will ease the pressure to raise rates in December and reduce the cost of capital for anyone building data centers.” Coming soon: Squawk Box will hear from Pershing Square CEO Bill Ackman for his thoughts on market movements after he said geopolitics and inflation were hampering a “buoyant market environment.”

Apple shares are under pressure in premarket trading after better-than-expected sales failed to offset disappointing profit margin expectations.

The top numbers are:

EPS: $2.10 vs. $1.99 expected Revenue: $114.48 billion vs. $113.39 expected

Despite strong performance across its product line, the iPhone maker expects gross profit margins to be between 45% and 46%, given Apple’s global memory chip shortage.

Why it matters: According to CNBC’s Robert Hamm, the last time Apple coached at this level was nearly four years ago. From Tarnas to CNBC: New CEO John Tarnas told CNBC’s Mackenzie Sigalos during an earnings call: “At this point, given everything we’ve accomplished, I feel more confident than ever that the best is yet to come.” Targets: Morgan Stanley lowered Apple’s price target from $355 to $350, and JPMorgan lowered its price target from $360 to $355.

After US forces reportedly launched an attack on Qeshm overnight, Iran insisted it was ready to respond “strongly” to a US attack.

A U.S. official told the Wall Street Journal that Washington has carried out “limited attacks” against the country in recent weeks. The report, citing unnamed officials, said military operations against Iran were deliberately kept quiet so as not to suggest any intention to escalate the fighting on a large scale.

Background: The Trump administration has minimized expectations of active conflict ahead of midterm votes, but Vice President J.D. Vance told CNN he was confident in “the prospects for reaching a negotiated settlement.” Why it matters: Oil prices have rebounded from Monday’s steep decline and are rising on the move.

As the midterm elections approach, CNBC analyzes how the results will affect stock prices.

CNBC’s Luke Fountain took a closer look at how the election could change the outlook for certain companies heavily influenced by the U.S. government, particularly defense, healthcare, cryptocurrencies and AI.

Why it matters: Historically, stocks have fared well under divided governments. Volatility: CNBC’s Eamon Gervers examines how there could be surprising areas of cooperation on populist-style policies. Overnight: Follow CNBC’s Megan Cassella as she dives into the torso race to watch in both the House and Senate. Live Blog: Track all the latest developments with CNBC’s live blog starting at 12pm ET. Find it here.

North Korea denies any link to Binance hack as researchers track billions of dollars stolen

North Korea has denied allegations that it is involved in the estimated $6.3 billion Binance hack, calling the accusations a “grave political provocation,” according to state media.

Kim Yo Jong, the sister of North Korean leader Kim Jong Un, condemned what the FBI said was the work of the North Korean-linked hacker group Trader Traitor, Yonap news agency reported on Tuesday, citing the state-run Korean Central News Agency.

Blockchain analysis firms such as Elliptic and Chainalysis have also linked the attack and subsequent movement of stolen funds to North Korean-related actors.

—CNBC’s Jason Gewirtz, Robert Hamm, Mackenzie Sigalos, Priyanka Salve, Jenny Lee, Eamon Javers, Megan Cassella and Garrett Downs contributed to this report.

John Meloy and Jack Summers edited this edition.