Moves That Matter

What happened

On SpaceX's third-quarter earnings call Tuesday, Elon Musk confirmed that the boards of SpaceX and Tesla have each formed a special committee of independent directors to review a possible merger of the two companies. The committees were created at the request of shareholders. Musk described himself as a 'conflicted party' who cannot participate — 'an odd kabuki dance where two groups of people are talking and I can't be in the conversation.' He stressed no terms have been agreed and a deal is 'not a certainty,' but said he supports the idea: 'There's a lot of merit to combining the companies as we are pretty much in the Super Intelligence singularity and there's a lot to be gained from cooperating on developing Super Intelligence software, chip design, the Terafab obviously, robotics, mass to orbit with the Starmind constellation (and) connectivity.' Investors cheered: SpaceX shares jumped ~8-10% Wednesday, Tesla rose ~4%. At Tuesday's closes, a combined entity would carry roughly a $3.5 trillion market value (SpaceX ~$2T, Tesla ~$1.5T), with Musk holding about one-third.

What happened

Iranian Foreign Minister Abbas Araghchi said Wednesday that Tehran is prepared to 'give diplomacy another chance' and resume talks with the Trump administration — if Washington provides 'strong evidence of a sincere desire' to build trust and reach a just, lasting settlement. The message came in an X post alongside an op-ed in the Financial Times. He warned: 'If US chooses war over diplomacy, it'll certainly result in an even greater strategic failure.' Separately, Araghchi confirmed to U.S. media that indirect talks with Washington continue via Pakistan and Qatar over a seven-day ceasefire proposal to reopen the Strait of Hormuz — Iran's conditions being that the U.S. lift its naval blockade of Iranian ports, waive sanctions on Iranian oil sales, and release frozen Iranian assets. Washington reportedly wants to add new conditions to the plan.

What happened

Iranian state television reported that seven oil tankers caught fire and were damaged in the Strait of Hormuz — which, if verified, would be the largest number of vessels damaged in the waterway in a single day since the Iran war began on Feb. 28. Brent crude jumped 3.2% to $112.27 a barrel, its highest since May, and WTI briefly topped $100 a barrel. U.S. equity futures retreated sharply (S&P 500 futures -1%, Nasdaq futures -1.9%, Dow -0.7%), Asian markets slumped (Nikkei -2.7%, Kospi -3.5%, Hang Seng -3%, with Korea's memory-chip makers and SoftBank hit hard), and a flight to safety pushed the 10-year Treasury yield to 5.065%, its lowest in nearly a month.

What happened

Nvidia and Tesla will together invest about $2.8 billion in Samsung Electro-Mechanics to build factories producing advanced chip substrates, Seoul's Maeil Business Newspaper reported, with Nvidia's portion at around $2 billion. Barron's flagged the timing as awkward: it landed while the market was already fretting over AI spending sustainability after mixed Meta and Tesla earnings. Nvidia stock fell 2.2% in premarket trading on Thursday, all but erasing the 2.5% rally it posted Wednesday on Jensen Huang's GTC Berlin keynote. Barron's has reached out to Nvidia for comment; neither company has formally confirmed the report.

What happened

Southwest Airlines sharply cut its full-year 2026 adjusted earnings forecast on Wednesday, citing a surge in fuel costs. The carrier now expects adjusted EPS of $2.60 to $2.85, down from its prior $3.25–$4.25 guidance range issued in July; the new midpoint sits below Wall Street's $2.85 consensus (LSEG). Southwest also guided Q4 earnings below Street expectations. Q3 fuel cost came in at $3.92/gal vs. the airline's $3.70–3.75 assumption, adding $821 million in fuel expense year over year — a $1.08 headwind to adjusted EPS in the quarter alone — and it projects Q4 fuel at ~$4.55/gal. The miss on costs overshadowed an otherwise solid quarter: adjusted Q3 EPS of 66 cents beat the 58-cent consensus, revenue hit a record $8.4 billion, and average fares jumped nearly 27%.

What happened

Iran's floating oil reserve in Asian waters — the offshore stockpile it used to keep selling crude to China despite sanctions — has been fully depleted by mid-October under the U.S. naval blockade, the Wall Street Journal reports, citing ship-tracking analysts at Kpler. Dozens of Iran-linked tankers had held millions of barrels off Malaysia and Singapore; reserves peaked at nearly 90 million barrels in the summer, fell below 1 million barrels by October 5, and are now exhausted, with Kpler's Homayoun Falakshahi saying 'there's no more oil to discharge to China anymore.' U.S. Central Command said Saturday the blockade has denied Tehran at least $25 billion in oil revenue, limiting its ability to replace destroyed weapons and factories. Oil prices rose more than 2% on the news, with Brent climbing above $111–112 a barrel, and U.S. stock futures tumbled premarket.

What happened

The Wall Street Journal reported, citing officials familiar with the planning, that the U.S. military has been preparing options for strikes on Iran — despite President Trump's public statement that the U.S. won't attack Iran before the Nov. 3 midterm elections. Two aircraft carrier strike groups are already in the Middle East, with a third heading there from the Pacific. Saudi authorities blamed Iran-backed Houthi militants for an attack on a civilian airport that resulted in casualties, and the U.S. ordered nonemergency government employees and families to leave Saudi Arabia. Trump added fuel by saying the U.S. was 'not negotiating' with Iran and that a development could come 'fairly soon.' Front-month Brent crude jumped 2.1% to $111.12 a barrel and WTI rose 1.9% to $98.96, with U.S. crude inventories falling a larger-than-expected 3.1 million barrels last week, per EIA data released Wednesday.

What happened

On Tesla's Q3 2026 earnings call Wednesday evening, CFO Vaibhav Taneja said Tesla is revising its full-year 2026 capital-expenditure guidance to approximately $20 billion, down from the more than $25 billion it had previously projected, 'as a result of managing our capital deployment efficiently.' He added that Tesla has secured up to $30 billion in new borrowing facilities to support expected growth in capex but 'does not plan to make any draws under any of the new facilities in this calendar year.' Separately, Elon Musk tempered expectations for the Optimus humanoid robot: reaching an annualized run rate of 20,000 units a week (roughly a million units a year) will take 'probably at least a year, maybe a little longer,' with key design issues to be solved 'around the end of next year' — the timeframe for delivering robots to external customers. Shares, which had risen about 2% immediately after the earnings release, reversed during the call and were trading roughly 4% lower. The stock had closed Wednesday's session up 3.4% at $386.47.

What happened

The New York Times reported Wednesday that the U.S. and Israeli militaries have drawn up specific plans for renewed strikes on Iran after the Nov. 3 U.S. midterm elections: a short but intensive operation targeting Iran's nuclear facilities, missile and drone arsenals, and energy infrastructure — though some officials said refineries and oil infrastructure would be avoided to limit gasoline-price rises. The two militaries have stepped up exercises, including practice strike flights over Iraq. Defense Secretary Pete Hegseth met Israeli PM Benjamin Netanyahu in Israel this week to discuss new strikes. Separately, Axios reported dozens of Israeli Air Force fighter jets flew an operational sortie Monday about 1,300 km from Israel, near Iran's border. The U.S. buildup — three aircraft carriers, thousands of Marines, fighter jets and special-operations units — is expected to be fully in place by early November.

What happened

Anthropic is set to publicly file its S-1 registration statement with the SEC as soon as Friday, Oct. 23, according to three people familiar with the plans cited by Yahoo Finance. Anthropic filed confidentially on June 1, and SEC rules require the materials to be public 15 calendar days before a roadshow — so a Friday filing would clear the last procedural hurdle toward a roadshow starting the week of Nov. 9 and a November listing on Nasdaq, with Morgan Stanley, Goldman Sachs and JPMorgan leading. The offering would exceed SpaceX's June listing as the largest IPO in history, with Wall Street expecting a raise of up to $100 billion at around a $2 trillion valuation — though Reuters reports some investors now weigh closer to $1.5 trillion after the WSJ disclosed an $80.7 billion first-half net loss and $600B+ in compute commitments.

What happened

The State Department formally ordered the departure of non-emergency U.S. government employees and their family members from Saudi Arabia on Wednesday, citing escalating Houthi attacks on civilian targets. Spokesman Tommy Pigott said the order applies to 'Saudi Arabia only,' publicly calling Reuters' report of ordered departures across Gulf embassies 'inaccurate' — though four U.S. officials told Reuters that other Gulf missions would also order family members out, and AFP reported families at UAE, Jordan, Qatar and Bahrain missions had been told to leave. After the order was issued, Saudi Arabia's civil aviation authority reported a Houthi attack on King Fahd International Airport in Dammam that killed one person and injured eight. Earlier Wednesday, the Energy Ministry said debris from a drone — intercepted while targeting a facility at Aramco's Shaybah oilfield — killed two people and injured two; the Saudi-led coalition said it intercepted and destroyed five drones early Wednesday, including over Madinah and the Eastern Province. The U.S. Embassy in Riyadh issued a security alert warning of possible further Houthi attacks, and the State Department warned hostilities 'have the potential to escalate rapidly, including beyond that immediate area.'

What happened

Details from Tesla's Q3 2026 earnings call disclosed that xAI purchased $269 million of Tesla Megapacks in 2026, and that Tesla's storage demand is at its 'highest-ever order rate and backlog,' driven by data centers. CFO Vaibhav Taneja said the Q3 energy gross margin jump to 33.1% came 'primarily' from tariff refunds and warranty true-downs from a vendor reimbursement agreement. Elon Musk said Tesla is 'almost sold out of all Megapacks for 2027' and expects margins on them 'to increase meaningfully.'

What happened

Texas Instruments reported Q3 2026 revenue of $6.06 billion, up 28% year over year and ahead of the ~$5.94 billion consensus. Earnings per share came in at $2.62, beating consensus estimates around $2.40-$2.44. CEO Haviv Ilan cited continued broad-based growth across industrial, automotive, and data-center end markets. For Q4, TI guided revenue of $5.80-$6.30 billion and EPS of $2.45-$2.79, both above Wall Street's consensus of $5.76 billion revenue and $2.31 EPS. Shares slipped about 0.5% to $283.10 in after-hours trading.

What happened

Lam Research guided to adjusted earnings of $2.33 per share on revenue of $8.60 billion, both above consensus estimates of $2.31 and $8.53 billion. Despite the beat-and-raise setup, the stock dropped more than 5% in after-hours trading. The selloff suggests investors wanted a bigger upside surprise or see signs of a demand peak in wafer-fab equipment spending.

What happened

IBM reported Q3 adjusted earnings of $2.95 per share, beating the $2.86 consensus, on solid revenue. Management raised its full-year 2026 free-cash-flow outlook by more than $1 billion over the prior year. But the stock reversed earlier gains and fell about 4.5% in after-hours trading: gross margins narrowed from last year, and IBM merely maintained its constant-currency revenue growth guidance of 4%-5% rather than raising it, disappointing a market where 'beats aren't enough' without raised outlooks.

What happened

Thermo Fisher Scientific reported Q3 adjusted EPS of $6.68, beating the $6.40 consensus by $0.28, on revenue of $12.14 billion (+9% YoY, 6% organic) versus $11.95 billion expected. Adjusted operating margin expanded 120 basis points to 24.5%, with growth led by Pharma Services, clinical research, electron microscopy and improving biotech demand. The company raised its full-year 2026 outlook: revenue $47.7-48.2 billion, organic growth 4%, adjusted EPS $25.13-25.43, and free cash flow $7.0-7.5 billion. However, the quarter benefited from approximately $60 million of net tariff-refund recovery contributing $0.15 to adjusted EPS — a largely one-time benefit that the company partly reinvested in AI deployment, Pharma Services capacity and employee investments. Fourth-quarter organic growth guidance holds at 4% after some Pharma Services activity shifted into Q3. The market reaction was muted: commentary notes the stock 'shrugged off' the beat given the rich multiple and the non-recurring lift.

What happened

Tesla reported Q3 2026 revenue of $28.05 billion, roughly flat year over year and about in line with consensus (~$27.9-28.3B), while non-GAAP EPS of $0.48 beat estimates ($0.43-0.45), though down 4% YoY. GAAP operating income plunged 56% to $718 million (2.6% margin) as operating expenses surged 39% to $4.78 billion on AI/superintelligence R&D, stock compensation and SG&A. Automotive revenue fell 3% to $20.56B on 486,532 deliveries (-2% YoY), but automotive gross margin improved to 18.5% GAAP (18.1% ex-credits, up from 15.4% a year ago), and services revenue jumped 33% to $4.61B. Energy generation and storage revenue fell 16% to $2.88B, which Tesla attributed in part to tariff-related customer refunds, even as storage deployments grew 10% to 13.7 GWh and order intake hit record highs. FSD (Supervised) attach exceeded 75% of North American deliveries with 1.74M active subscriptions (+67% YoY); Tesla delivered its 10 millionth vehicle, ended with its largest passenger-vehicle backlog in four years, put Cybercab into the Austin Robotaxi fleet, began Optimus production in Fremont and Semi production in Nevada. Free cash flow was $1.53B and cash rose to $45.4B.

What happened

Meta Platforms reported Q3 2026 revenue of $64.6 billion, up 26% year over year and ahead of the ~$63.2-63.4 billion consensus, with advertising revenue up 26% ($63.06B) on 10% higher impressions and 14% higher ad prices. GAAP net income was $9.86 billion, up 264% YoY, but diluted EPS of $3.83 missed consensus ($4.98-6.54) because the quarter absorbed a $9.89 billion charge from the multistate social-media-harm settlement; excluding it, EPS would have been $7.40. Meta also announced it will create publicly listed, non-voting Class C common stock, issued as a dividend to common and supervoting holders — an effective 2-for-1 stock split effective January 19, 2027 that preserves Zuckerberg's voting control while raising capital for AI. Q4 revenue guidance of $73-76 billion came with the high end above analyst expectations, 2026 capex was narrowed to $135-145B (low end raised from $130B), and free cash flow went negative (-$2.1B) for the first time in Meta's history, though better than the -$9.4B analysts feared. Shares rose 2.9-4% in after-hours trading.

What happened

United Airlines (UAL) reported third-quarter earnings of $2.54 per share on revenue of $18 billion for its third quarter, per Investor's Business Daily. Earnings missed Wall Street's target by 3 cents while sales were in line with estimates, as soaring fuel prices hurt profits during the quarter. The carrier's profit outlook for the current quarter came in at $1 per share at the midpoint, well below analyst targets of $1.64. Despite the miss and the soft guide, United shares got off to a poor start in early trade but then reversed and jumped nearly 4% as the price of oil receded during the session. The stock remained below its 50-day moving average.

What happened

Three U.S. officials told Reuters on Wednesday that the State Department is preparing to issue an ordered departure of some personnel and family members from U.S. embassies across the Persian Gulf region. Two of the officials said the move is driven by the possible resumption of hostilities, particularly with Iran-aligned Houthi militia in Yemen. The headline hit during Wednesday's afternoon session and immediately took the edge off a strong rally: the Nasdaq trimmed its gain from as much as 1.3% to about 0.8%, and the 10-year Treasury yield turned higher, rising 3 basis points to 5.14%, according to MarketWatch. 'The Gulf situation clearly is not a market-friendly story,' said Steve Sosnick, chief strategist at Interactive Brokers.

What happened

SpaceX shares soared nearly 10% to ~$161.96 in early Wednesday trading after Wall Street gushed over the company's Tuesday-evening Q3 report and its first-ever forward guidance. The company guided first-quarter 2027 revenue of $33-37B, demolishing the ~$22B Wall Street consensus. One analyst raised its price target 108% to $500. CEO Elon Musk said AI demand and pricing are stronger than expected, claiming the company could 'rent out our compute several times over' and faces a long-lasting shortage of 'Super Intelligence compute.'

What happened

Needham analyst Laura Martin downgraded Netflix to Hold from Buy, one of the harsher calls in the post-earnings price-target wave. Martin said it could take two years for Netflix to improve its content slate and lift viewer engagement, called the company's advertising revenues a continued disappointment, and said Netflix's 'strategic position is deteriorating' compared with Alphabet's YouTube, Disney and Skydance. Rosenblatt reiterated Neutral (target cut to $71 from $75); Piper Sandler kept Overweight but trimmed to $78 from $85. At least 17 Wall Street analysts have now cut targets since the Q3 report.

What happened

Hedge-fund billionaire Ken Griffin sounded a cautionary note Wednesday, warning there are 'almost certainly bubbles' within the broader AI rally, per the Wall Street Journal's live market coverage. The warning landed on the same day the AI trade got a big boost: SpaceX shares surged ~10% on blowout guidance, and chip stocks advanced after bullish comments from Nvidia CEO Jensen Huang during a Berlin keynote, helping lift the Nasdaq.

What happened

U.S. Treasury yields were flat Wednesday, but French benchmark bond yields crossed 5% for the first time in 24 years as concern mounts about the country's fiscal and political woes, per WSJ's market coverage. Reuters reported the French 10-year OAT at 4.94% this morning — up 2.7bp — with the spread over German bunds at 153.1bp. Prime Minister Sebastien Lecornu said the government would reinforce police with a 'massive' troop deployment to quell protests planned for Saturday.

What happened

Australian data-center operator NextDC shed nearly half its market capitalization on Wednesday after sharply cutting its forward forecasts and putting future expansion on hold. Delays to electricity network upgrades (by Jemena Electricity Networks) at its major Melbourne M3 facility mean about A$140 million ($98 million) of contracted customer revenue will be deferred this financial year, with the next capacity increase now expected only in 2028. NextDC cut its 2027 net revenue outlook to A$475-$500 million from A$615-$640 million, cut 2027 underlying EBITDA guidance to A$245-$265 million from A$385-$410 million (both excluding the affected M3 contracts), shelved all new development projects and land acquisitions 'for the foreseeable future,' and said it will evaluate capital recycling including potential site sales. The stock closed down 41.7% — its worst session since listing in 2010 — and its lowest since January 18.