Dow futures fell 359 points, or 0.7%, as Apple slid on a Margin warning and oil rebounded after US strikes on Iran's Qeshm Island, while Nasdaq-100 futures rose 0.4%. Americans vote in the midterms, and prediction markets give Democrats a nearly 75% chance of taking the Senate.

1. MIDTERMS: Americans Vote With Prediction Markets Giving Democrats a Nearly 75% Chance of the Senate and Investors Unprepared for a Sweep

Prediction market traders see a nearly 75% likelihood of Democrats taking the Senate. A Democratic sweep could weigh on the broader market on Wednesday and spark a sell-off in artificial intelligence stocks especially, because investors have not firmly positioned for that outcome. If Republicans keep the Senate or both chambers, the market may see short-term gains. Voters are particularly unhappy about rising fuel costs, and the Supreme Court denied a request by the Trump administration to temporarily stop California from counting 20,000 mail-in ballots.

  • One chief market strategist said "Once you are through it, it's a big relief and markets tend to do pretty well."
  • Risk note: the same strategist warned that "If you have a huge red wave or a big blue wave, markets actually kind of don't like that as much because you have too much spending one way and too much power."

2. APPLE: Slips Nearly 4% as a Weaker Margin Forecast and Rising Memory Costs Overshadow a Revenue Beat

Apple (NASDAQ:AAPL) fell nearly 4% pre-market after forecasting a gross margin of 45% to 46% for the December quarter, down from 47.9%, and services revenue growth of 8% to 9%, below the 10.7% expected. September-quarter revenue of $114.48 billion beat $113.39 billion, and Earnings of $2.10 per share beat $1.99, including 5 cents of Tariff refunds. iPhone sales of $57.58 billion beat $56.54 billion, but iPad, wearables and China sales missed, with China at $17.54 billion against $18.58 billion expected. CFO Kevan Parekh said memory costs will keep rising into next year, and Apple's purchasing commitments rose by $33 billion in the quarter.

  • CEO John Ternus said of the new foldable iPhone Duo that "Duo is constrained as of today," with no timeline for Supply to meet demand.
  • Risk note: Apple raised iPhone 17 prices by $100 to offset memory costs and will limit usage of features that rely on server-side AI models.

3. AI AND SOFTWARE: Palantir Slides 8% Despite a Record Quarter, Shopify Plunges 15% and Anthropic Commits $895 Billion to Infrastructure

Palantir (NASDAQ:PLTR) fell 8% pre-market after third-quarter revenue rose 96% to $2.31 billion and adjusted earnings of 44 cents per share beat 41 cents. US commercial revenue jumped 148% to $984 million and overtook US government revenue of $953 million for the first time. It guided fourth-quarter revenue to about $2.65 billion and raised its 2026 forecast to about $8.53 billion. Shopify (NASDAQ:SHOP) fell about 15% after revenue of $3.74 billion came in close to estimates and it guided fourth-quarter revenue growth to a low-thirties percentage rate. Anthropic has committed to spending $895 billion on AI infrastructure, a filing ahead of its planned IPO showed, and reported third-quarter revenue of almost $17 billion, up from $1.4 billion a year earlier.

  • Anthropic swung to an operating loss of $567 million from an operating profit of $974 million in the previous quarter, as computing costs rose.
  • Risk note: Palantir's US commercial contract bookings grew 11%, far slower than its 148% commercial revenue growth.

4. OIL: Brent Rebounds 1.75% to $106.60 After US Strikes on Iran's Qeshm Island, a Day After Monday's 7% Sell-Off

Brent crude rose 1.75% to $106.60 a barrel and West Texas Intermediate 1.7% to $98.10, after the US reportedly struck Iran's Qeshm Island late Monday. Oil fell more than 7% on Monday after the US and Iranian presidents signalled they are open to a diplomatic solution. Vice President JD Vance said, "The president and I both feel really good about the prospect of potentially coming to a negotiated settlement." High oil prices have contributed substantially to US Inflation and gasoline prices, a concern for President Donald Trump before the midterms. Saudi Aramco reported third-quarter profit of $31.2 billion, up 9%.

  • Two Federal Reserve presidents said last week that interest rates will need to move higher to rein in inflation.
  • Risk note: Aramco has been more directly affected than other majors, especially as Houthi rebels have attacked its facilities.

5. ECONOMY: The RBA Raises Rates to 4.85%, Treasury Yields Edge Higher and Job Openings Open a Busy Data Week

Australia's Central Bank raised its cash rate by 25 basis points to 4.85%, the highest since November 2008 and its fifth increase this year, in a 6 to 3 vote. Inflation rose to 4.3% in September, and the bank expects it to stay elevated through much of 2027 and return to its 2% to 3% target range only in late 2027, three quarters later than forecast. The 10-year US Treasury Yield rose more than 3 basis points to 4.929%, the 30-year more than 2 basis points to 5.296% and the 2-year more than 2 basis points to 4.604%. September job openings, due later, are expected to rise to 7.10 million from 7.079 million. The Logistics Managers' index rose to 70.7 in October, its second-strongest reading in four years, and an economic optimism index rose to 48.5, the highest since February, against 46.2 expected.

  • ISM services and ADP employment arrive on Wednesday, and October payrolls and Unemployment on Friday.
  • Risk note: aggregate logistics costs rose at the fastest pace since March 2022 as retailers stocked up for the holidays.

6. PRE-MARKET MOVERS: Zebra Plunges 17% and Aehr Jumps 18% as Revvity Gains 7%, Gartner Slides and Pfizer Raises Its Forecasts

Zebra Technologies (NASDAQ:ZBRA) fell 17% despite beating estimates, as its gross margin fell to 45.7% from 48.0% and free Cash Flow guidance of at least $1 billion was marginally below the $1.02 billion expected. Aehr Test Systems (NASDAQ:AEHR) rose 18% after record fiscal first-quarter revenue of $33.0 million, up 200%, and a higher full-year revenue forecast of $150 million. Revvity (NYSE:RVTY) rose 7% after raising its full-year earnings guidance to $5.40 to $5.45 per share. Gartner (NYSE:IT) slid more than 6% despite beating expectations. Pfizer (NYSE:PFE) was flat after adjusted earnings of 87 cents per share beat 73 cents, as it raised its sales forecast to $62 billion to $64 billion. Yum Brands (NYSE:YUM) rose 3% after earnings of $1.56 per share beat $1.49, while Yum China (NYSE:YUMC) fell about 5%. Archer-Daniels-Midland (NYSE:ADM) was flat after raising its 2026 earnings forecast to $5.50 to $5.80 per share.

  • ADM's agricultural services and oilseeds operating profit more than doubled to $778 million as higher crude prices lifted Demand for biofuel feedstocks.
  • Risk note: Taco Bell's same-store sales fell 4% after a cyclospora outbreak linked to iceberg lettuce, though sales have since outpaced the industry.

7. MARKET SETUP: Dow Futures Fall 359 Points While Nasdaq-100 Futures Rise 0.4% After a Tech Rout in Korea and Taiwan

Dow futures fell 359 points, or 0.7%, and S&P 500 futures 0.1%, while Nasdaq-100 futures rose 0.4%. On Monday the Nasdaq Composite fell 1.07% and the S&P 500 0.51% as investors rotated out of tech, while the Dow rose about 214 points, or 0.41%. In Asia, South Korea's Kospi fell 3.59% to 5,648.79 and the Kosdaq 4.08%, Taiwan's Weighted Index fell 3.59% to 43,307.54 and China's CSI 300 0.2%, while Australia's ASX 200 rose 0.34% and Hong Kong's Hang Seng gained 0.37% in its last hour.

  • Russia, Ukraine and the US will hold talks in Abu Dhabi next week, their first trilateral meeting in nine months.
  • Risk note: Russian strikes killed 26 people at an aid-distribution centre in Ukraine.