SpaceX’s Spectrum Move Hits Wireless Carriers: 8 Key Items Shaping the Stock Market Friday

These are the early headlines and other items poised to influence the market at the start of trading Friday. As we share this collection of market drivers, U.S. equity futures point to a positive start to the final day of trading this week.

1. Oil retreated after President Donald Trump said the US wouldn’t attack Iran before the November midterm elections, cooling fears over further escalation that could jeopardize Middle East energy flows. Brent fell near $103 a barrel, after surging more than 4% on Thursday. Trump’s comments allayed worries stoked by an Atlantic report that the White House had asked the Pentagon to draw up strike options for before the polls. (Bloomberg)

That dip in oil prices and Treasury yields remaining steady at least so far this morning, are giving some lift to equity futures. However, it’s Friday and that means being mindful that weekend developments are likely to shape how the markets begin trading Monday morning. With that in mind, Hurricane Isaias is headed for the Gulf Coast landfall Friday night with life-threatening storm surge, rainfall flooding and high winds. It is then expected to move inland over the Southeast this weekend.

Damage reports and how that may impact refining capacity will be something to watch for as will any fresh developments between the U.S. and Iran, and how that may affect traffic through the Strait of Hormuz.

2. Delta Air Lines cut its annual profit forecast by nearly a quarter at the midpoint on Friday as surging fuel costs overwhelmed strong travel demand and higher ticket prices, sending its shares down 3% in premarket trading. The downgrade underscores a growing challenge for US carriers: whether passengers will absorb further fare increases if fuel prices remain elevated. (Reuters) The airline now expects full-year earnings per share of between $5.10 and $5.60, down from a range of $6.50 to $7.50… Fuel expenses jumped 62% to $4.1 billion in the third quarter compared to the year-ago period. That’s with an average fuel price of $3.61 per gallon. It’s probably going to get worse—Delta’s guidance factors in an expected price of $4.25 per gallon in the fourth quarter. (Barron’s)

After yesterday’s quarterly results from PepsiCo (PEP), Delta Air Lines (DAL) was the other earnings report we flagged for this week that would reveal the impact of higher energy prices. The pair reinforce our view that higher energy and related prices have yet to be fully baked into H2 2026 and potentially 2027 consensus EPS figures for companies that count those as key inputs and have no offsets, like Energy Surcharges found at Waste Management (WM).

3. OpenAI is expecting to reach or exceed $70 billion in annualized revenue by the end of the year, according to people familiar with the matter, driven largely by growth in its enterprise business. The ChatGPT-maker’s annualized revenue was roughly $50 billion at the end of September, the people said. The figure represents a projection of OpenAI’s yearly sales based on a shorter period… Some media outlets reported last month that OpenAI was already projecting nearly $70 billion in annualized revenue, based on investor estimates. The Financial Times reported Thursday that the discrepancy came from OpenAI’s investors attempting to calculate OpenAI’s annualized revenue using the same methods as Anthropic. (Bloomberg) Nvidia-backed cloud-computing company Firmus Grid scrapped plans for Australia’s largest initial public offering in almost 30 years, a new sign that investors are growing leery of lofty valuations for companies exposed to artificial-intelligence demand. Firmus, which sells Nvidia-powered computing capacity to large technology companies such as OpenAI and Meta Platforms, pulled plans to raise $5 billion after investors balked at its proposed $30 billion valuation. Firmus said it would instead pursue further private investment. (WSJ)

The back and forth in the media about would be OpenAI revenue reminds us that understanding how a company recognizes revenue, especially compared to its competitors is critical. It also serves as a reminder about understanding the puts, takes, and the source of estimates.

The pulled IPO for Firmus Grid is the latest indication the IPO window is shut at least for now, and it likely raises questions about Anthropic’s expected IPO between the midterm elections and the Thanksgiving holiday. Will it happen? At what offering price and valuation? Reasonable questions, and the basis for some of those answers may come next week when Anthropic holds a pre-IPO day on October 14. More insight will come with the company’s publicly files its S-1 with the SEC and conducts its IPO roadshow. And with Morgan Stanley (MS), Goldman Sachs (GS), JPMorgan (JPM) and other investment banks reporting next week, we’ll be interested in their comments about that offering and prospects for the larger IPO market.

4. Lumentum Holdings Inc.’s optical components are “completely sold out” through early 2029 on demand from tech companies clamoring for faster AI data centers, according to its chief executive officer. Lumentum is unable to meet about 70% of demand for some products through next year and won’t be able to address 30% of demand for some other products through 2028, Michael Hurlston said in an interview in Tokyo Friday. Just six months ago, Hurlston said Lumentum was on track to sell out its capacity by 2028. (Bloomberg)

Lumentum’s (LITE) comments speak to the multi-year forecast laid out by Marvell (MRVL) earlier this week and reaffirms our longer-term position about the multi-pronged tailwind for networking chips and equipment. In our view, while the market is focusing on AI and data center in near to medium term, autonomous driving, connected robotics and other developments will accelerate the speed of data creation and consumption through networks. And, yes, Hurlston’s comments are lifting the Lumentum’s shares in the Portfolio’s recently reconstituted EPS All-Stars basket, and several others across the Portfolio as well.

5. SpaceX struck a deal on Thursday to acquire a nationwide low-band spectrum portfolio, moving Elon Musk’s satellite venture closer to mounting a direct, orbital challenge to legacy wireless giants across the United States… By pairing nationwide low-band airwaves with high-frequency space capacity, SpaceX is positioning Starlink Mobile to bypass conventional cell towers entirely and challenge the wireless oligopoly on both broad coverage and in-building reliability. The deal raises the stakes for legacy carriers, transforming satellite direct-to-device connectivity from a supplementary safety feature for remote dead zones into a full-scale commercial rival capable of unseating terrestrial cellular networks. (Reuters)

This arguably expected move by SpaceX (SPCX) to eventually compete with the likes of AT&T (T), Verizon (VZ), T-Mobile (TMUS) and others is weighing on shares of those carriers. During the “Market Hang” discussion I participated on earlier this week at Yahoo! Finance, I raised this very concern while explaining why in many respects the Starlink business is one of the more important SpaceX pieces.

The knee-jerk reaction is on data connectivity to devices like smartphones, but the other area that SpaceX and eventually Amazon’s (AMZN) Leo will aim to disrupt in a more meaningful way is the one found at Verizon, but also Comcast (CMSA), Charter (CHTR) and other cable companies – home broadband.

6. Apple has told some suppliers to cut production of components for its newly launched iPhone 18 Pro and iPhone 18 Pro Max, as soaring memory chip costs and price increases have dampened consumer demand, Nikkei Asia reported on Friday. The iPhone maker has turned more conservative on shipments since early September, with component orders for October being slashed by at least 15% compared with what was originally requested, Nikkei reported, citing multiple people ⁠familiar with the matter. (Reuters)

Candidly, we are not surprised that initial orders for Apple’s (AAPL) new iPhone 18 Pro and Pro Max models are less than expected. While higher prices have some role in that, the greater factor is the growing buzz around Apple’s iPhone Duo. Orders for the first foldable iPhone begin on October 16 and the device hits shelves on October 23. In our view, aggregate orders across these new iPhone models are what matter more. To the extent that the mix for those orders skews toward the higher priced Duo, and there is reason to think that will be the case, the better for Apple’s revenue. It would also help reinvigorate Apple’s product design reputation.

Before we get to the Duo, however, Apple will hold another product event on October 13 with the tagline “Welcome Home.” As that suggests, Apple will showcase several new Home products, including refreshed HomePods and Apple TV devices, most likely with Siri AI added. Of greater interest will be the company’s expected HomePad and related connected home product that include a doorbell, thermostat, smart deadbolt lock, and indoor and outdoor security cameras. Those products would challenge Alphabet’s (GOOGL) Nest and other connected device vendors.

7. Economic data today per TipRanks: Prelim. Michigan Consumer Sentiment Index (October).

8. Companies reporting today per TipRanks: AM – Delta Air Lines (DAL).

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At the time of publication, TheStreet Pro Portfolio was long AAPL, AMZN, GOOGL, LITE, MRVL, MS, and WM.