Oil Flows Improve, for Now: 8 Key Items Shaping the Stock Market Monday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to lower open when equities begin trading later this morning.

1. A new wave of attacks on vessels around the Strait of Hormuz is threatening a recovery in Middle Eastern oil exports — just as Gulf producers have pushed crude shipments back toward prewar levels. The swift rebound in shipments in recent weeks has been driven by U.S. naval protection and earlier waves of strikes that knocked out Iranian radar and communications along the contested strait. The United Arab Emirates and other producers have set up an elaborate system of shuttle runs in which tankers load inside the Persian Gulf, exit Hormuz and transfer the crude to vessels waiting outside the waterway… The new strikes expose the fragility of the recovery in oil flows and come as President Trump, who has claimed full U.S. control over Hormuz, weighs renewed military action against Iran. (WSJ)

Oil prices are moving lower on Monday morning as rising Middle East crude exports and a release of oil stocks by the Group of Seven nations boosted supplies. That would suggest Iran’s hold on the oil market is weakening, but that could also mean a renewed effort on its part to regain control of the flow. Such moves would likely increase the probability for another round of blows between the U.S. and Iran. We’ll continue to monitor those developments as well as crude supply constraints.

And while crude is flowing better than it has in several months, Saudi Aramco (ARMCO) shared it view that with nearly 3 billion barrels of oil supply lost since the conflict began, it could take up to two years to rebuild global oil inventories. The company added that if the U.S.-Iran war continues, the supply squeeze could worsen. To us that suggests that the probability of a sharp and sustained drop in oil prices back to pre-war levels between $55 to $60 per barrel of West Texas Intermediate Crude isn’t all that high.

2. Taiwan’s Foxconn, (the world’s largest contract electronics maker, reported on Monday a 47% jump in third-quarter revenue year-on-year that beat market estimates, fuelled by strong AI-related demand. Revenue for the July-September quarter was T$3.03 trillion ($95.4 billion), well above an LSEG SmartEstimate of T$2.83 trillion that gives greater weight to forecasts from analysts who are more consistently accurate. Strong AI demand led to robust revenue growth ⁠for its cloud and networking products division, while smart consumer electronics, which include iPhones, posted significant growth, the company said. (Reuters)

That performance from Foxconn (FXCOF) is both a welcome and positive data point for companies benefitting from the AI and data infrastructure tailwind. It also sets the stage for Marvell’s (MRVL) Investor Day on Tuesday. Sales at Foxconn are expected to climb further as capital spending expands from hyperscalers to neocloud, sovereign AI and enterprise buyers. Foxconn will report its full Q3 2026 results on November 12. As we wait for Marvell’s event to begin, we’ll be looking out for Taiwan Semi’s (TSM) September revenue report.

3. Schneider Electric will acquire US engineering software provider PTC in a $23.7bn deal that marks the French industrial conglomerate’s biggest takeover. The all-cash transaction of $205 a share values PTC’s equity at about $22.6bn and represents a 42 per cent premium to the last closing price… The deal, first reported on Sunday by the FT, will boost Schneider’s offering of software solutions that can aid manufacturers with designing industrial products and engineering specifications. (FT)

The Schneider Electric SE (SBGSF) announcement above, Cenovus Energy (CVE) buying Athabasca Oil (ATHOF), and reports that Advanced Drainage Systems (WMS) will acquire StormTrap Investments show companies are continuing to execute deals to plug competitive, geographic or technology holes in their businesses. Those and other deals, including Nvidia Corp.’s (NVDA) acquisition of Hugging Face worth about $12.93 billion, the merger of NextEra Energy Inc. (NEE) and Dominion Energy (D), and Vertiv Holdings Co. (VRT) acquisition of UtilityInnovation Group for about $1.45 billion, remind us there is more to investment banking fee generation than just IPOs.

4. Service providers in the eurozone became notably more aggressive when setting their prices in September, with charges increasing at the sharpest pace since February 2024. In comparison, cost inflation quickened to a four-month high. (S&P Global)

That’s from S&P Global’s Final September Eurozone Services PMI report out earlier on Monday morning. It sets the stage for the analogous report for the U.S. out later on Monday morning as well as ISM’s September Service PMI. Following the sharp increase in ISM’s September Manufacturing Price sub-index, the incoming inflation findings for the Service sector, which accounts for 85% to 90% of U.S. GDP, could re-shape timing expectations for the Fed’s next expected rate hike.

Market expectations for a Fed rate hike in October plummeted after the weaker than forecasted September Employment Report, but including Monday’s data we will still have a few more pieces that could alter that viewpoint. The September CPI will be published on October 13 and the September PPI the following day.

5. Hermès International SCA was hit with its first sell ratings in more than a year, as analysts at Goldman Sachs Group Inc. and UBS Group AG warned the Birkin-maker’s era of impressive growth is coming to an end. The Paris-based company’s shares fell as much as 3%, extending this year’s decline to more than 40%. The stock is on course for its worst annual performance since going public in 1993. (Bloomberg)

Looking at Tematica’s array of targeted exposure and thematic models, Luxury Buying Boom was one of the worst performers, falling nearly 15%. No surprise, given the comments about consumers trading down, even the more well-off ones as they feel the tinge of higher living costs. Back in May, Morgan Stanley cuts its 2026 luxury goods spending growth forecast to 2.5%, down from its prior forecast of 4% to 5%. With inflation pressures still blowing, the sector looks like one to avoid for now, however, it will bear watching for a time when those inflation pressures fall.

6. Chipmaker Qualcomm and chip tech firm Arm Holdings, long at loggerheads, will once again be in court on Monday with Qualcomm accusing Arm of withholding chip testing ‌tools that were due under contract. Qualcomm also alleges that Arm leaked to the media its 2024 threat to terminate a vital license agreement in a way that damaged discussions for a chip deal between Qualcomm and Meta Platforms.

ARM (ARM) has denied breaching the contract, and Qualcomm (QCOM) is seeking ⁠to quit paying royalties — potentially worth billions of dollars — to Arm for up to five years. The jury trial is expected to be a five-day event, which means potential developments late this week that could reshape consensus EPS figures for Qualcomm and ARM.

7. Economic data today per TipRanks: S&P Global Final Services PMI (September), ISM Services PMI (September).

8. Companies reporting today per TipRanks: AM – There are no market moving earnings reports expected, but we will be watching for positive as well as negative pre-announcements.

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At the time of publication, TheStreet Pro Portfolio was long MRVL and NVDA.