EMEA Morning Briefing: Worries Over Middle East Tensions Resurface

MARKET WRAPS

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EU flash consumer confidence indicator; France business survey; trading updates from Barclays, Nokia, Nestle, Kering, SEB, Roche, L'Oreal, Hermes, Swedbank, Galderma, J Sainsbury, InterContinental Hotels, Prada, LSE, Rentokil Initial

Opening Call:

European stock futures were lower early Thursday, mirroring declines in Asian stock benchmarks. U.S. Treasurys yields and the dollar edged lower. Oil futures rose and gold fell.

Equities:

Stock futures in Europe tracked lower as concerns over Middle East tensions resurfaced amid the ongoing earnings season.

Meta's results overnight were in focus. "Strong AI-related earnings helped ease concerns over the sustainability of the AI-investment boom," Commerzbank Research analysts said. However, "renewed Middle East tensions tempered risk sentiment."

Meanwhile, the spotlight returned to Middle East geopolitical developments. Although President Trump has said that the U.S. won't attack Iran before U.S. midterm elections on Nov. 3, the U.S. military has been preparing a range of options to strike Iran, The Wall Street Journal reported, citing officials familiar with the planning.

Separately, Saudi Arabia's energy ministry said on X that the country intercepted a drone that attempted to target Saudi Aramco's Shaybah oil field on Wednesday.

Forex:

The dollar, an effective measure for AI market sentiment, could see further mild downside in the near-term if AI concerns persist, said Matthew Ryan, head of market strategy at Ebury.

However, Ryan expects bouts of AI-related anxiety to prove temporary, with the broader investment case remaining intact. Still, markets remain sensitive to negative news, he said.

Bonds:

U.S. Treasury yields edged slightly lower amid continued artificial-intelligence-related credit concerns. Such concerns and "expectations for an exit from reflationary policy are improving supply/ demand conditions for long-term bonds globally," Nomura's Naka Matsuzawa said. This is driving flattening along the yield curve, the strategist said.

Energy:

Oil strengthened early Thursday amid concerns over a re-escalation of the Middle East conflict.

Oil flows out of the Persian Gulf in October nearly returned to levels seen before the start of the Iran war, but traders remain wary about a fragile recovery.

"Yes, we are starting to see recovery, but the issue is a large portion of those barrels have to take a more convoluted route," said Ben McMillan, chief investment officer at IDX Advisors.

"You have a lot of oil still going through over-the-ground pipelines, shuttle tankers and even dark-fleet tankers, so there's still a premium in getting oil out of the Gulf, and there's an elevated cost to do so because the shipping is not fully resumed," he said.

Metals:

Gold prices fell. High oil prices have been a key driver of weakness in gold given the risk to inflation, Antonio Di Giacomo of XS.com said. "Inflation can encourage demand for wealth preservation, but it can also support higher interest rates," he said. "Concerns about a restrictive monetary policy response are limiting the metal's appeal."

Copper was lower. Prices were likely to stay rangebound in the near term, Nanhua Futures analysts said. "Uncertainty surrounding U.S. Federal Reserve's policy trajectory, volatility in the U.S. dollar index, and pending U.S. copper tariff policies could amplify price fluctuations," they noted.

Iron ore prices fell. A weak demand outlook and ample supply continue to weigh on the market, Baocheng Futures analysts said. Chinese steelmakers' profitability remains under pressure, prompting mills to curb production and keeping ore consumption subdued, they said. Port arrivals in China have risen sharply, and shipments from major miners have rebounded, adding to supply pressure.

TODAY'S TOP HEADLINES

Iran's Fleet of Shadow Tankers Has Run Out of Oil After Monthslong U.S. Blockade

For most of the war, Iran had an invaluable cushion: dozens of oil tankers holding millions of barrels of crude sitting safely in waters in Asia. Tehran steadily sold the oil to China, bringing in billions of much-needed cash.

Now, that floating storage is gone. By mid-October, the reserves were fully depleted, according to analysts at Kpler, as a U.S. naval blockade prevented Iran from replacing the crude it normally sells to Chinese refineries.

Diplomats Race to Head Off Escalation With Iran

DUBAI-Middle East mediators are scrambling to revive talks with Iran, fearful that hostilities could flare anew as the U.S. moves another aircraft carrier to the region and Israel warns that it has prepared plans for possible new strikes.

President Trump has said the U.S. won't attack Iran before U.S. midterm elections on Nov. 3. But he has also sounded hawkish notes, threatening Sunday on social media that unless Iran rapidly changes its behavior, the U.S. and Israel "will soon finish the job."

Elon Musk's Starlink Speed Cap Has Scrambled Ukraine's Defenses

KYIV, Ukraine-As six Ukrainian drones buzzed toward a Russian army warehouse in occupied eastern Ukraine on Monday, the pilots found their connections disrupted.

Any time they flew faster than 100 miles an hour, the video feed cut out-the result of new limits put in place last week for Ukrainian drones using Starshield, a military version of Elon Musk's Starlink satellite-internet service. Musk himself imposed the limits, The Wall Street Journal has reported.

Musk Says Tesla Aims to Begin Humanoid Robot Sales Next Year

Tesla Chief Executive Elon Musk said the carmaker could be ready to start shipping its Optimus humanoid robots to outside companies by the end of next year, and that its fleet of autonomous taxis will soon become a significant driver of revenue.

On Tesla's third-quarter earnings call Wednesday, Musk told investors that the company's Robotaxi fleet would soon prove lucrative as usage of the service surges "exponentially." Demand for its old-fashioned human-owned cars is growing because Tesla's Full Self-Driving (Supervised) automated driving assistance system, or FSD, is now a key selling point, he said.

Meta Will Split Stock, Create New Class to Fund AI Spending

Meta Platforms is getting creative to fund its massive investments in artificial intelligence.

The company reported record revenue for the third quarter and said it would create a new class of nonvoting stock to raise the capital it needs for developing and serving AI models. The new shares will be issued as a dividend to holders of common and supervoting shares, with an effective date of Jan. 19, 2027. The effective 2-for-1 stock split won't affect Chief Executive Mark Zuckerberg's voting control or the voting power of other shareholders, the company said.

IBM Reports Higher Profit as Some Delayed Deals Come Through

International Business Machines reported a higher third-quarter profit and growing revenue across its software and infrastructure segments, as the company looks to prove to investors that its disappointing second-quarter showing was just a blip.

IBM's second-quarter profit was hit by mainframe deals that fell through, weighing on the company's software and infrastructure segments. Around two-thirds of those deals have since closed during the third quarter, and IBM is optimistic about most of the rest, Chief Financial Officer Jim Kavanaugh said.

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Expected Major Events for Thursday 04:30/NED: Sep House Price Index

04:30/NED: Oct Consumer confidence survey

06:00/NOR: 3Q Business tendency survey

06:00/DEN: Oct Consumer expectations

06:00/NOR: Sep Labour force survey SA, incl unemployment

06:00/EU: Sep New Passenger Car Registrations in Europe statistics (EU27 + EFTA3)

06:30/HUN: Sep Employment & unemployment

06:45/FRA: Oct Monthly business survey (goods-producing industries)

08:00/POL: Sep Agricultural prices

08:00/POL: Sep Retail Sales

10:00/UK: Oct CBI Industrial Trends Survey

11:00/TUR: Turkish interest rate decision

12:00/POL: Sep Broad money M3

14:00/EU: Oct FCCI Flash Consumer Confidence Indicator

17:59/POR: Aug ICSG Copper Report

23:01/UK: Oct UK Consumer Confidence Survey

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October 22, 2026 00:15 ET (04:15 GMT)

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