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Opening Call:

European stock futures were lower in tandem with declines in Asian stock benchmarks. U.S. Treasurys yields were little changed, the dollar weakened. Oil futures and gold gained.

Equities:

Stock futures were tracking lower early Tuesday amid ongoing artificial-intelligence investment concerns and elevated oil prices.

Investors are becoming more selective instead of treating the entire ecosystem as one trade, said Chris Weston, head of research at Pepperstone.

"Concerns about financing the AI buildout contributed to a 2% decline in the S&P 500 last week, setting up an important test as the corporate earnings season gathers pace," UBS Chief Investment Office Chief Investment Officer Mark Haefele said.

"Results will show whether strong profit growth can restore confidence in the equity rally, while flash purchasing managers' indices will provide timely signals on global activity and price pressures."

Forex:

The U.S. dollar weakened. Financial markets appear to have been caught in a "tug of war between risk-on momentum in U.S. technology shares and a cascade of geopolitical headwinds emanating from Europe and the Middle East," UOB's Global Economics & Markets Research team said.

Artificial intelligence is now "a two-way USD story," OCBC Group Research strategists said. On the one hand, the AI boom "supports the dollar when it lifts U.S. growth and returns." On the other hand, the relationship "can reverse when financing concerns hit equities and yields," the strategists added.

Bonds:

Recent moves in fixed income have been eye-watering, particularly in Europe where we have seen sovereign bond yields breaching quarter-century highs and wider spreads in some echelons of corporate credit, said Neuberger's Maya Bhandari in a note.

"Pressure has also been bubbling under the hood; for example, in the past month we have seen the biggest weekly widening in Franco-German spreads since German reunification in 1990. As a result, broad European rates premia have moved to their highest positive "spread" to European equities since at least 2011, which is highly unusual, the co-chief investment officer said. However, she reckoned that this is unlikely to last.

Energy:

Oil prices edged higher. "The Trump administration continues to talk up its efforts to support oil flows, with Energy Secretary Chris Wright saying they had recovered to about 80% of their pre-conflict levels," ANZ Research analysts said.

However, "efforts to support the fuel market are likely to fall short," they said, pointing to "rising supply risks in the Middle East."

While Persian Gulf oil flows improved in the second week of October, the recovery may be under threat amid increased attacks, the analysts said.

Metals:

Gold gained early Tuesday. "The relationship between energy prices, inflation expectations, and Federal Reserve policy remains central to gold's near-term direction," Naeem Aslam of Zaye Capital Markets said.

Lower oil prices could favor bullion by easing inflationary pressure and expectations for tighter monetary policy. But persistent geopolitical tension and high energy costs could mean interest rates remain restrictive for longer. "This would increase the opportunity cost of holding non-interest-bearing assets such as gold."

Copper edged lower. While prices rose on expectations that President Trump might impose tariffs on the metal, some investors now doubt they will materialize, said ANZ Research analysts. That said, continuing supply-side issues are likely to limit the downward pressure on prices.

A major copper smelter in South Korea might cut output as a global shortage of copper concentrate squeezes margins, which could reduce supply of the metal, the analysts added.

Iron ore prices declined, weighed by high port inventories in China and weakening steelmaking demand, said Anliang Futures analysts. Steelmakers' losses have curbed their appetite for restocking after preholiday purchases ended. Also, port inventories continued to build, keeping pressure on prices.

The market will watch for changes in hot-metal output and the pace of inventory drawdowns, while persistent macro headwinds and lackluster domestic demand remain key downside risks, they added.

TODAY'S TOP HEADLINES

Stock Pickers Burned by the AI Boom Think Their Moment Has Finally Arrived

AI skeptics like Timothy Casaletto are having a tough stretch.

The artificial-intelligence frenzy that fueled a record run for stocks has left the biggest fund he manages starkly underperforming the S&P 500. The Vanguard Dividend Growth Fund is up 55% over the past four years, compared with a return of 126% for the S&P 500, through Friday.

Trump Says He Would Be Open to Meeting With Putin and Xi

WASHINGTON-President Trump said Monday that he would be open to meeting with the leaders of Russia and China to discuss denuclearization.

Trump's comments came after The Wall Street Journal reported that Russian President Vladimir Putin has proposed that he, Trump and Chinese leader Xi Jinping meet next month to talk about Ukraine in an attempt to negotiate an end to the four-year conflict that would favor Moscow.

Marine Le Pen Seizes on French Chaos to Present Herself as Leader in Waiting

PARIS-The riots sweeping France have rocked the country's political establishment, but one person is positioned to emerge from the chaos with a stronger hand: Marine Le Pen.

For more than a decade, the far-right leader has cast France as a nation adrift, buffeted by waves of immigration and lawlessness that have torn at the country's social fabric. As bands of hooded rioters in dark clothing have descended on city centers across France, raiding city halls and looting thousands of stores, Le Pen has sought to present herself as the sole candidate in this spring's presidential election willing to restore order.

Vance Declines to Endorse Netanyahu in Re-Election Bid

Vice President JD Vance declined to back Benjamin Netanyahu in Israel's coming elections, a break from President Trump who has given the Israeli prime minister his backing.

Trump said in a post on Truth Social on Sunday that Netanyahu "has been a Great Warrior Prime Minister, and an even greater Partner for Peace in combatting the Islamic Republic of Iran." The Oct. 27 election is the first national election since Hamas attacked Israel on Oct. 7, 2023, and will be a referendum on Netanyahu's response.

Forget Tech. Energy Will Be The Big Winner This Earnings Season.

The energy sector will kick off its earnings season on Tuesday-and what a season it will be. Earnings per share for energy companies in the S&P 500 are set to jump 128%, based on the latest estimates compiled by FactSet. That's roughly twice as much as tech.

Energy's year-over-year growth probably won't be quite as high as the second quarter, when earnings jumped 146% on the back of international oil prices that averaged $98 per barrel. In the third quarter, average oil prices slumped slightly to $91. But in some ways the third-quarter gains are even more surprising-most analysts expected that the Iran War would begin to dissipate by the middle of the summer. And yet here we are, still deep into a war with no obvious end in sight.

SpaceX earnings will be all about AI - for better or for worse

SpaceX is set to report third-quarter earnings on Tuesday, with artificial intelligence likely to be the star of the show.

From a financial standpoint, SpaceX SPCX is expected to report a return to profitability, with earnings per share of 13 cents compared to a loss per share of nine cents in the June quarter, according to FactSet data. Sales are expected to have been $12.8 billion, up 64% versus the same period a year earlier.

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Expected Major Events for Tuesday 05:00/FIN: Sep Labour force survey, incl unemployment

06:00/UK: Sep UK monthly unemployment figures

06:00/GER: Sep PPI

06:00/SWI: Sep Trade Balance

07:00/SPN: Aug Trade Balance

07:30/POR: Aug Balance of Payments

08:00/EU: Aug Euro area balance of payments

08:00/POL: Sep Average gross wages

08:00/POL: Sep PPI

08:00/POL: Sep Industrial Production Index

08:00/ICE: Sep Harmonized CPI

08:30/UK: Sep Monthly Insolvency statistics

09:00/EU: Aug Construction output

09:00/ITA: Aug Balance of Payments

09:00/LUX: Sep Unemployment

09:05/GER: Oct ZEW Indicator of Economic Sentiment

10:00/POR: Sep PPI

10:00/UK: Sep Aluminium Production report

12:00/HUN: Oct Hungarian interest rate decision

17:59/POR: Aug ICSG Copper Report

17:59/UK: Adzuna UK Job Market Report

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October 20, 2026 00:15 ET (04:15 GMT)

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