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Briefing.com Summary:
*The AI trade is back on after a more encouraging update about OpenAI's annualized revenue run rate.
*Apple is weak after reportedly telling suppliers to lower their production of iPhone 18 components.
*Oil prices are down and sovereign bond yields have eased.
The tech sector and the AI trade got a little scare yesterday when the Financial Times published a report suggesting OpenAI's annualized revenue run rate was tracking to $50 billion, or roughly $20 billion less than previous estimates had suggested it would be. That report precipitated some selling interest, most of which is being unwound this morning after Bloomberg reported that OpenAI is on track to meet or exceed $70 billion in annualized revenue by the end of the year.
The nuance, Bloomberg said, is that the $50 billion reported yesterday was a projection of OpenAI's annual sales based on a shorter period.
The market looks amenable to accepting this explanation. Currently, the S&P 500 futures are up 30 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 240 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 72 points and are trading 0.1% above fair value.
Helping the AI rebound trade is the acknowledgment from Lumentum's (LITE) CEO that his company's optical components are completely sold out through early 2029.
The equity futures market, however, has to contend with the drag in Apple's (AAPL) shares after Nikkei reported Apple is telling suppliers to lower their production of iPhone 18 components due to weaker than expected demand following price hikes. AAPL is down 2.3% in pre-market trading.
Fellow Dow component American Express (AXP) is off 1.8% in the wake of news that it has agreed to pay a $350 million penalty to resolve regulatory reviews by banking regulators.
Separately, Delta Air Lines (DAL) is trading 1.9% lower after coming up shy of Q3 EPS estimates, hurt by volatility in fuel prices, and issuing an FY26 EPS outlook of $5.10-5.60, the midpoint of which is below the current FactSet consensus estimate. On the bright side, the company's CEO told CNBC that Delta is not seeing any slowdown in bookings.
Other corporate news items drawing attention include SpaceX's (SPCX) move to acquire a low-band spectrum license portfolio up to 14 megahertz of paired spectrum in the 800 MHz band, which is hitting the stocks of AT&T (T), T-Mobile (TMUS), and Verizon (VZ), and Humana (HUM) popping on an upgrade to four stars from 3.5 stars with CMS's release of its Medicare Advantage and Part D star ratings. CVS's (CVS) Aetna business fell from four stars to 3.5 stars.
Something else that is falling this morning is oil prices. WTI crude futures are down 1.1% to $90.52/bbl, and Brent crude futures are down 1.4% to $102.83/bbl. Also, most sovereign bond yields have taken a lower turn. The 10-yr note yield, thus far, has not joined the party. It is up one basis point to 5.24%.
The move in oil and the rebound in the AI trade, though, have been enough to carry the equity futures trade and to set the table for a positive start to today's session, which will also include the preliminary October University of Michigan Consumer Sentiment report (Briefing.com consensus: 48.1; prior 48.1) at 10:00 a.m. ET.
