ES Rebounds After Intel Rout: Oil Below $100, ISM and Apple Ahead of Midterms

Key Takeaways

• Technical rebound after the worst session since June. The S&P 500 fell 1.82% on Friday to 7,580.07, dragged down by the plunge in Intel (INTC, -28.6%) and the Philadelphia Semiconductor Index (-7.2%). At midday, the December ES future is up 0.50% at 7,652.25. The NQ is doing better (+0.83%) and tech is leading the rebound. This move retraces only about a quarter of Friday's decline.
• Oil pulls back on hopes of a U.S.-Iran deal. December WTI is down 4.1% at $99.81, slipping back below $100. January Brent is trading around $109, versus a $113.43 settlement on Friday. This eases inflation expectations but weighs on the energy sector, which was the index's best-performing sector on Friday (+1.91%).
• The Fed is in a hiking cycle and ISM Manufacturing is out at 4:00 p.m. Paris time. The forecast is 54.5 to 54.7. The prices paid component is expected at 77.5, versus 77.9 in September. CME FedWatch puts the probability of a rate hike on December 9 at 70.9%.
• Apple (AAPL) reports tonight around 10:30 p.m. The forecast calls for EPS of $1.98. Apple is the world's largest company by market cap, at roughly $5.03 trillion, and the largest weight in the index. Palantir (PLTR) holds its earnings call at 11:00 p.m.
• U.S. midterm elections tomorrow. According to several press reports, Donald Trump could resume strikes on Iran as soon as the day after the vote. Geopolitical risk is therefore concentrated from Wednesday onward.

Overnight and Europe

Asia. A mixed session.

• The Nikkei 225 is down 0.29% but holds above 63,000. Tokyo will be closed tomorrow.
• The Hang Seng is up 0.59% and the Shanghai Composite about 1%. They are supported by results from China's four largest banks and by a PBoC meeting with regulators on market support measures.
• China's official October PMIs all fell below 50: 49.3 for manufacturing, versus 50.0 expected.
• The Kospi soars 2.24% to 5,859.08. South Korean exports for October jumped 93.7% year over year.

These Korean exports are the data point that matters for the S&P 500. They show that physical demand for AI chips is not weakening, which contradicts Friday's narrative. This is direct support for Nvidia (NVDA, -4.22% on Friday), Broadcom (AVGO, -5.48%) and Micron (MU, -5.30%).

Europe. Indices opened in the red, then recovered.

• The Euro Stoxx 50 is up 0.48% at 6,160 by mid-morning.
• The DAX is up about 0.2% near 25,840.
• The CAC 40 is up 0.1% at 7,980.

What has moved since Friday evening. Three factors explain the rally:

• Iran and Qatar held a third day of talks;
• Secretary of State Marco Rubio said Donald Trump had not yet decided to resume military action;
• the VIX is down 0.57 points at 18.85.

Market breadth. On Friday, the equal-weight S&P 500 ETF (RSP) lost only 0.79%, versus 1.82% for the cap-weighted index. The decline came from the tech heavyweights, not the broad market.

Today's Calendar

On Friday, the Chicago PMI fell to 55.3, versus 56.1 expected. This raises the risk of an ISM print slightly below forecast.

Since the Fed is in a hiking cycle, the prices paid component matters more than the headline index:

• Prices paid above 78 and headline above 55: the probability of a December hike would climb back toward 80%. The 2-year yield would rise, and richly valued tech would resume Friday's selling.
• Headline below 54 and prices paid falling: the most rate-friendly scenario. It would extend the rebound, especially in rate-sensitive names and small caps, but it would also revive growth concerns.

Rest of the week: JOLTS Tuesday, ADP Wednesday, October jobs report Friday at 2:30 p.m.

Fed and Rates

• On October 28, the Fed held rates at 3.75%–4.00% by a 10–2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack voted for a 25 bp hike. The hiking cycle resumed in September, with the first hike in three years. September CPI inflation was 3.7% year over year.
• Fed Chair Kevin Warsh pledged that the committee would "ensure price stability."
• Friday, two hawkish voices:
• Dallas Fed President Lorie Logan, a 2026 voter, believes at least two more 25 bp hikes are needed.
• St. Louis Fed President Alberto Musalem believes a hike will be needed "soon."
• Today, 5:15 p.m.: Chicago Fed President Austan Goolsbee, a non-voter in 2026, hosts a discussion with Andréa Maechler, Deputy General Manager of the BIS. On October 14, he called a string of further bad inflation readings "unacceptable."
• FedWatch: probability of a hike on December 9 at 70.9%. It was around 85% right after the October 28 meeting and 69.4% at Friday's close.
• Yields:
• the 10-year is around 4.91–4.93% (-1 bp), a seven-week low;
• the 2-year is at 4.59% (+1 bp).
• The curve is flattening slightly: the market is betting on the Fed in the short term and on a slowdown in the long term.
• Credit: high-yield spreads widened to 326 bp on October 29 (from 314 bp), investment-grade spreads to 89 bp (from 86 bp). This is a warning sign for financials and highly leveraged companies.

Earnings

Apple. This is the week's decisive report for the index. The company is worth about $5.03 trillion, ahead of Nvidia (about $4.93 trillion). The market will focus on iPhone 18 sales and guidance for the December quarter.

• It reports after harsh reactions to Alphabet (GOOGL, -13% on a double miss) and Amazon (AMZN, -1.41% Friday, negative trailing twelve-month free cash flow of $42.4 billion). The bar is high.
• A disappointment would trigger another catch-down session for megacaps tomorrow, on Election Day.
• A strong print would stabilize the Nasdaq-100, which briefly entered correction territory on Friday.

Palantir. The stock serves as a thermometer for AI software. On Friday, the market punished cash-burning companies and rewarded cash generators.

ON Semiconductor (ON). The first test for semiconductors after the SOX's 7.2% plunge.

Williams (WMB) and Diamondback (FANG). They report as WTI slips back below $100.

Friday's backdrop.

• Intel collapsed: Q4 EPS guidance of $0.25, versus $0.43 expected.
• Exxon Mobil (XOM, +2.16%) and Chevron (CVX, +1.75%) beat expectations and hit record highs.
• Regeneron (REGN) jumped 13.33% on EPS of $20.07 versus $16.42 expected, and AbbVie (ABBV) raised its guidance. Healthcare emerged as a safe haven.

Geopolitics and Conflicts

U.S./Israel – Iran War and the Strait of Hormuz

• The conflict has lasted seven months. Iran is in talks in Doha with Qatari mediators.
• Iranian side: Foreign Minister Abbas Araghchi cites progress without a conclusion. Supreme Leader Mojtaba Khamenei has ordered military chiefs to prepare for a new confrontation.
• Israeli side: Prime Minister Benjamin Netanyahu is pushing for a strike immediately after tomorrow's vote. Donald Trump would prefer to let negotiations continue.
• At sea: on Friday, a tanker was hit by limpet mines in the Strait of Hormuz. It is the first successful strike of this kind since the war began.
• Channel to the index: oil first, then inflation expectations and the Fed. A resumption of strikes on Wednesday would send Brent and yields higher again.

Russia – Ukraine

• Ukrainian drones struck a refinery in Russia.
• Ukrainian President Volodymyr Zelensky conditions a halt to these strikes on an end to Russian attacks on Ukraine's power grid.
• Moscow is extending its diesel export ban until January 31, 2027.
• Channel: distillates, which supports margins for U.S. refiners such as Valero (VLO) and Marathon Petroleum (MPC).

Trade: U.S. – Canada, China

• Donald Trump says he is close to a deal with Canada that would include the Keystone pipeline.
• Canadian Prime Minister Mark Carney mentions a negotiating framework but refuses to rush.
• The Standing Committee of China's National People's Congress meets November 2–6.
• Channel: industrials and materials. Contracting Chinese PMIs are dampening demand.

U.S. Midterm Elections

• Voting takes place tomorrow. Donald Trump says he could become "Mr. Veto" if Democrats take Congress.
• Channel: risk appetite and the volatility premium until results are in, then taxation and sector regulation.

Oil and Commodities

• Oil. WTI is at $99.81 (-4.1%), Brent around $109 (about -4%). OPEC+ confirmed unchanged quotas for December.
• Gold. Up 0.15% at $3,904.70, after a 3.3% drop on Friday to a one-year low.
• Natural gas. Settled Friday at $2.883 (-2.34%).

Takeaway for the index:

• Direct negative effect: likely profit-taking in energy (XOM, CVX, FANG) after Friday's records.
• Indirect positive effect: lower oil reduces inflation expectations and the risk of Fed hikes, supporting tech and consumer names.
• Friday's rotation into energy, consumer staples and utilities may therefore reverse at least partially today.

Dollar and Volatility

• Dollar. The DXY is at 101.84 (-0.1%) early in the morning and EUR/USD at 1.1183 (+0.2%). USD/JPY is at 157.84 (+0.2%), with Japanese Finance Minister Satsuki Katayama remaining ready to intervene. GBP/USD is at 1.3399. The prospect of a Fed hike limits the dollar's decline.
• Volatility. The VIX is at 18.85, versus 19.42 on Friday, after an intraday spike near 24. Sentiment is easing, but volatility remains elevated ahead of the vote and Apple's report.
• Crypto. Bitcoin is holding around $78,000 after the $6.3 billion hack that weighed on Coinbase (COIN, -10.62%) and Robinhood (HOOD, -7.21%) on Friday.

Key Watch Points for the Session

1. 3:30 p.m. – cash open.

• Does the gap up hold? The rebound is solid if it is driven by Nvidia, Broadcom and Micron, and not just short covering.
• The equal-weight/cap-weight spread also needs to stay positive.
• If energy and tech rise together, that would invalidate the rotation reading.

1. 3:45 p.m., then 4:00 p.m. – PMI and ISM. Prices paid above 78 are the main downside risk for the afternoon: the 2-year would climb and the NQ would drop. A weak ISM with falling prices would extend the easing in rates.
2. 5:15 p.m. – Goolsbee. An explicit endorsement of a December hike would weigh on tech multiples.
3. Oil throughout the session. Any news from Hormuz or Doha moves Brent. A return above $112 would erase the morning's relief.
4. 10:00 p.m. – close, then Apple at 10:30 p.m. and Palantir at 11:00 p.m. These reports will set the tone for overnight trading, on the eve of an election and a possible resumption of strikes on Iran.

Market framing only: no buy or sell recommendation.