US stock futures edged higher ahead of the Fed's 2 p.m. ET decision, with S&P 500 futures up 0.2% and Nasdaq-100 futures up 0.4%, as chipmakers rallied on SK hynix's record profit. Alphabet and Microsoft report after the bell, Brent Crude rose above $115, and Israeli Assets sold off after an inconclusive election.

1. FED: Decision at 2 p.m. ET With About 90% Odds of a Hold at 3.75% to 4% as Traders Watch for Signs of More Hikes

The Fed is widely expected to hold rates at 3.75% to 4% after a quarter-point hike in September, and traders price about 90% odds of no change. Some expect Fed Chairman Kevin Warsh to signal that more hikes will follow. The 10-year Treasury Yield is about 5.01%, the 2-year about 4.75% and the 30-year about 5.3%. The US goods Trade Deficit widened to $134.9 billion in September against $130.2 billion expected, as the AI Investment boom pulled in imports of capital goods, suggesting trade again subtracted from third-quarter growth. Advance third-quarter GDP is due Thursday, with economists forecasting 3.2% annualized growth against 2.2% in the second quarter.

  • Mortgage rates fell for a second week to 7.37% from 7.41%, lifting applications 3.4%, while the adjustable-rate share rose to 11.3%, the highest in more than a year.
  • Risk note: with no policy change expected, markets could move on any commentary from Warsh.

2. AI CHIPS: SK Hynix Surges 11% on Record Profit and a 100 Trillion Won Payout, Lifting the Kospi 6.6%, as Google Opens Its TPUs to Oracle

SK hynix closed 10.89% higher after third-quarter operating profit of 83.33 trillion won beat the 76.72 trillion expected, up 632% from a year earlier, on Revenue of 104.62 trillion won ($78.86 billion) against 98.34 trillion expected. It plans to return about 100 trillion won to shareholders this year. The Kospi closed 6.63% higher, and SK hynix's US-listed shares (NASDAQ:SKHY) rose 7% pre-market to $155.55, extending a rebound after a 21% slide in October, with Micron (NASDAQ:MU) up 4% and AMD (NASDAQ:AMD) up nearly 2%. DRAM prices rose by a high-20s percentage on the quarter. Separately, Alphabet (NASDAQ:GOOGL) said Oracle will offer Google's tensor processing units, its custom AI chips, the first time customers can use them outside Google's own infrastructure. Alphabet reports after the bell, with analysts expecting Google Cloud revenue to jump about 90%.

  • SK hynix says DRAM and HBM Supply is effectively sold out through 2029, with shortages expected through 2030.
  • Risk note: SK hynix's net profit missed on currency and investment losses, and TPU sales outside Google carry an estimated 20% Operating Margin against about 35% for cloud overall.

3. OIL: Brent Rises to $115 After a Houthi Missile Attack on Saudi Arabia's Largest Refinery

Brent crude futures rose 1% to $115.07 a barrel and West Texas Intermediate 1.8% to $101.72, after the Houthis said they hit Saudi Arabia's Ras Tanura refinery with a ballistic missile on Tuesday. President Trump said at a rally in Texas that the war with Iran would end on his terms and that Tehran must never acquire a nuclear weapon, after saying earlier that he was weighing a deal or more military action.

  • Concerns over disrupted oil flows have kept a geopolitical risk premium in crude prices.
  • Risk note: the refinery attack raises worries of escalation, and Trump has not said whether he will choose a deal or more strikes.

4. ISRAEL: Shekel Falls 2% and Tel Aviv 35 Drops 2.3% as an Election With No Clear Winner Pushes Bond Yields Higher

Israeli assets sold off after the country's first election since Hamas's Oct. 7, 2023 attack produced no clear winner. In partial results, Prime Minister Benjamin Netanyahu's party had 20.8% of the votes counted and challenger Gadi Eisenkot's 16.4%. Eisenkot, a former military chief of staff, declared victory and said his bloc should have the first right to try to form a government. Arab-led parties, which belong to neither camp, are projected to win about 18 seats, and exit polls showed neither bloc reaching the 61 seats needed in the 120-seat Knesset. The shekel fell 2% against the dollar, and yields on 2-year, 10-year and 30-year Government Bonds rose 6, 8 and 6 basis points. Turnout of 77.7% was the highest in 27 years, and official results are due Nov. 4.

  • Netanyahu, the longest-serving prime minister, has stayed in office through past stalemates, and Israel held 5 elections between 2019 and 2022.
  • Risk note: Avigdor Liberman, projected at 7 to 9 seats, refused to rely on Arab parties, so coalition talks could take weeks or months.

5. PRE-MARKET MOVERS: Vertiv Jumps 16%, PPG Gains 6%, Enphase Tumbles 18%, Logitech Falls 11% and Robinhood Slips 7%

Vertiv (NYSE:VRT) jumped 16% after adjusted Earnings of $2.21 per share beat $1.82, on revenue of $4.31 billion against $3.75 billion, with stronger guidance for the quarter and the year. PPG Industries (NYSE:PPG) rose 6% on record adjusted earnings of $2.25 per share and a higher midpoint for full-year guidance. Enphase Energy (NASDAQ:ENPH) tumbled more than 18% after revenue fell to $293.3 million from $410.4 million a year earlier. Logitech (NASDAQ:LOGI) dropped more than 11% as Operating Income of $200.6 million missed expectations, despite adjusted earnings of $1.51 per share against $1.30 expected. Robinhood (NASDAQ:HOOD) fell about 7% after earnings of 51 cents per share missed 56 cents and crypto revenue dropped 55% to $120 million, though revenue rose 12% to $1.42 billion.

  • Vertiv's beat suggests AI Data Center spending is still flowing to equipment makers.
  • Risk note: Robinhood's profit fell as a prolonged crypto slowdown cut trading activity.

6. DEALS: Trian Bids $1.4 Billion for Wendy's, Stellantis Jumps on Its Turnaround, GE Vernova Buys Trench and EnerSys Buys Ultralife

A group led by Nelson Peltz's Trian Fund Management offered $7.35 per share in cash to take Wendy's (NASDAQ:WEN) private, valuing it at about $1.4 billion, a premium of about 20%. The group includes BlueFive Capital, Sixth Street Partners and Flynn Group, one of Wendy's largest franchisees. Stellantis (NYSE:STLA) rose about 6% in Milan and 9% pre-market in New York after third-quarter revenue rose 1% to 37.6 billion euros and adjusted operating income rose 184% to 256 million euros, despite a 4 billion euro cash shortfall, and it kept its 2026 guidance. GE Vernova (NYSE:GEV) rose more than 1% after agreeing to buy high-voltage components maker Trench Group for about $9 billion and raising its full-year revenue forecast to $47 billion. Ultralife (NASDAQ:ULBI) surged more than 144% after EnerSys (NYSE:ENS), up 2%, agreed to buy it for $16 per share in cash, valuing it at about $320 million.

  • The Wendy's offer follows a tough 2-year stretch in which budget-conscious diners ate out less and Wendy's and rivals leaned on discounts.
  • Risk note: European carmakers are losing ground in China to Xiaomi, BYD and Geely, and Porsche and Mercedes-Benz flagged weak China sales this week.

7. MARKET SETUP: Futures Edge Higher, Alphabet and Microsoft Report After the Bell and Europe Dips

S&P 500 futures rose 0.2%, Nasdaq-100 futures 0.4% and Dow futures 11 points, or 0.02%. Alphabet was up more than 1% and Microsoft down marginally ahead of results after the bell. The STOXX 600 fell 0.27%, London's FTSE 100 0.33%, France's CAC 40 0.13% and Germany's DAX 0.11%. In Asia, Japan's Nikkei 225 closed 1.08% higher, South Korea's Kospi 6.63% and China's CSI 300 0.85%, while Australia's ASX 200 was flat.

  • Morgan Stanley's chief US Equity strategist said "most of the correction is already over" after 4 or 5 months of correction.
  • Risk note: tech stocks with AI exposure have struggled over financing questions, so Alphabet's and Microsoft's spending plans will be scrutinized.