Nasdaq 100 futures slid 0.7% as Data Center and chip stocks sold off again, while S&P 500 futures fell 0.2%. Oil surged more than 6% to a five-month high above $110 a barrel as Hormuz tanker attacks escalated. GM beat on both lines but fell 7% pre-market, and Treasury yields eased after a weak housing reading.

1. AI TRADE: Data Center Stocks Slide as Elice Plunges 30% in Its Debut and HSBC Cuts CoreWeave to Reduce

Data center and neocloud stocks fell again Tuesday after South Korean cloud company Elice plunged more than 30% in its overnight debut, deepening concerns about AI computing overcapacity. CoreWeave (NASDAQ:CRWV) lost 4% pre-market, Nebius (NASDAQ:NBIS) and Iren (NASDAQ:IREN) each shed about 5%, and Vertiv (NYSE:VRT) fell 2%. HSBC cut CoreWeave to reduce with a $39 target, implying 36.5% downside, citing Debt strain and moderating LLM Revenue growth. The broader chip complex also fell, with Micron (NASDAQ:MU), Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD) all down more than 2%. The move unwinds part of Monday's rebound, when the S&P 500 rose 0.4% and the Nasdaq added more than 1%; CoreWeave had tried to extend a Goldman Sachs upgrade but closed slightly lower. Asia fell in sympathy, with the Kospi down 3.73% and the Nikkei 225 off 1.3%.

  • The Elice debut gives investors a fresh, public data point on neocloud Demand just as debt concerns resurface around CoreWeave.
  • Risk note: HSBC's reduce rating implies more than a third of downside from current levels, a sharper call than most desks have made on the sector.

2. OIL: Crude Jumps to a 5-Month High Above $110 as Hormuz Tanker Attacks Escalate

Oil jumped Tuesday as front-month West Texas Intermediate futures, nearing expiry, surged 6.58% to around $110.48 a barrel, putting WTI on track for a ninth straight session of gains and a monthly rise of almost 20%. Brent Crude rose 1.94% to $111.67, its highest since May. At least 18 vessels have come under fire in the Strait of Hormuz over the past two weeks, per ship tracker Kpler, and Iran's Revolutionary Guard Corps said two tankers were set ablaze after hitting mines laid by its navy. The UK said it will send RAF Typhoon jets on defensive missions to protect Saudi airspace after Houthi strikes on Riyadh's airport and Saudi Aramco facilities. Trump has said US forces will not strike Iran before the November 3 midterms.

  • One oil analyst said the front-end WTI strength reflects falling Middle East export volumes and a US exemption for Russia's shadow fleet that frees up alternative crude supply.
  • Risk note: Iran's foreign ministry said Tehran would respond to any US strike in equal force, keeping the risk of wider escalation elevated into the midterms.

3. BONDS/FED: Treasury Yields Fall as Housing Starts Miss and Traders Price an 82% Chance the Fed Holds

US Treasury yields fell Tuesday after September housing starts missed at 1.221 million against 1.3 million expected, a 5.2% drop from an upwardly revised August pace and the third straight monthly decline. Building permits held up better, slipping just 0.2% to 1.400 million, above the 1.390 million expected. The 10-year yield fell more than 4 basis points to 5.092%, the 30-year dropped more than 5 basis points to 5.415%, and the 2-year eased 1 basis point to 4.751%. Traders now price an 82% chance the Fed holds rates steady at next week's meeting, up from 42.4% a month ago, per the CME FedWatch Tool. Investors are also awaiting Thursday's jobless claims and the Fed's preferred Inflation gauge, the PCE index.

  • The housing data is the weakest since May's six-year low, reinforcing the case for a Fed hold even with inflation above target.
  • Risk note: a hot PCE reading before next week's meeting could quickly reverse the shift toward pricing in a hold.

4. AUTOS: GM Falls 7% Despite Beating on Both Lines and Announcing a New $20 Billion Buyback

General Motors (NYSE:GM) fell about 7% pre-market even after beating Wall Street's third-quarter expectations, with adjusted Earnings of $3.70 a share against $3.63 expected and revenue of $50.02 billion against $48.7 billion expected. The automaker narrowed 2026 guidance to adjusted earnings of $12.75 to $13.75 a share, raised its free Cash Flow outlook, and announced a new $20 billion buyback, following a $6 billion program completed in January. GM said Commodity inflation costs are tracking near $2 billion, the high end of prior guidance, while Tariff costs sit at the low end of its $2.5 billion to $3.5 billion range. Net Income was $3.3 billion, up about $2 billion from a year earlier.

  • The scale of the buyback and narrowed guidance suggest management is confident in free cash flow even as commodity and tariff costs bite.
  • Risk note: a 7% drop despite a clear beat signals investors are focused on Margin pressure from inflation and tariffs rather than the headline numbers.

5. GEOPOLITICS: Trump Plans a Putin-Xi Summit on Ukraine as Zelenskyy Says Starlink and Intelligence-Sharing Have Been Degraded

President Trump said he plans to meet Russian President Vladimir Putin and Chinese President Xi Jinping to discuss ending the Ukraine war, suggesting the meeting could happen without Ukrainian President Volodymyr Zelenskyy present, possibly at next month's Asia-Pacific summit in Shenzhen. Trump renewed criticism of Zelenskyy, saying it may be time for someone else to negotiate on Ukraine's behalf. Zelenskyy said Starlink and Starshield satellite services from Elon Musk's SpaceX have been degraded and that US intelligence-sharing has also been disrupted, leaving Ukraine without advance warning of Russian strikes. Senators Richard Blumenthal and Thom Tillis called the disruption an impediment to peace.

  • Trump's openness to a deal without Zelenskyy present marks a further shift after his decision to waive new sanctions on Russian energy.
  • Risk note: disruption to Ukraine's satellite and intelligence links could affect the war's trajectory well before any summit takes place.

6. PRE-MARKET MOVERS: RTX and Northrop Grumman Rise on Beats, Steel Dynamics Falls 5.3% and Solstice Jumps on an Activist Stake

RTX (NYSE:RTX) rose 1% after third-quarter earnings of $2.26 a share, excluding items, beat the $1.78 expected, on revenue of $24.97 billion against $24.08 billion expected. Northrop Grumman (NYSE:NOC) gained 0.5% after earning $7.89 a share against $7.18 expected, though revenue of $11.12 billion came in just below consensus. Steel Dynamics (NASDAQ:STLD) fell 5.3% after missing on earnings and margins despite beating on revenue, though its Backlog is up 50% year over year, extending into 2027. Solstice Advanced Materials (NYSE:SOLS), spun off from Honeywell last year, rose more than 3% on reports that Starboard Value has built a stake worth several hundred million dollars and is pushing it to cut about $100 million in costs and focus on refrigerants and nuclear.

  • Starboard's push into Solstice follows the collapse of its proposed Element Solutions merger, with the stock still about 25% below its deal-announcement level.
  • Risk note: Steel Dynamics' backlog strength could offset Tuesday's selloff if demand holds up into 2027, but near-term margins stay under pressure.

7. MARKET SETUP: Futures Slip as DeepSeek Is Banned From US Agencies and Walmart Launches a Combined Membership

S&P 500 futures fell 0.2% and Nasdaq 100 futures slid 0.7% Tuesday, while Dow futures were little changed. The US banned Chinese AI startup DeepSeek from civilian agencies, citing risks that sensitive data could be exposed to Chinese authorities; the order excludes the Department of Defense. Walmart (NYSE:WMT) launched a combined Walmart+ and Sam's Club Plus membership at $120 a year, nearly $100 cheaper than buying both separately, as the retailer leans further into value. Apple (NASDAQ:AAPL) committed to buying up to $100 million of titanium over three years from a Pennsylvania supplier for its US Manufacturing push, and Hilton Worldwide (NYSE:HLT) said it will move its listing from the NYSE to Nasdaq next month.

  • Walmart's combined membership targets cash-strapped shoppers as the company leans on scale and value to defend market share.
  • Risk note: a broader crackdown on Chinese technology providers could widen beyond DeepSeek if other agencies follow the DHS order.