Oil Near $110 Tests US Equities as Iran Talks Stall

Brent is back near $110, but peace-deal talk has yet to make Gulf shipping safer. Strong AI earnings are helping stocks look past the oil shock for now. The question is whether that confidence lasts beyond the opening bounce.

Why Is Oil Rising When Everyone Is Talking About Peace?

Reuters recorded Brent futures at $110.85 (+1.9%) and WTI at $99.95 (+2.2%) earlier on Wednesday. The early optimism around Pakistan-mediated talks has given way to a familiar problem: Both sides are still negotiating the conditions.

Brent cash is testing $110.20–113.64 on the 4H chart, with the 50 EMA (1 SD) near $108.89. A sustained break above resistance would strengthen the upside case; losing that EMA band would weaken it.

Crude is only part of the bill. Shipowners face security and insurance costs, while expensive diesel makes moving goods dearer. A peace headline cannot remove those costs unless vessels can travel more safely.

US–Iran: What Are Both Sides Waiting For?

The latest position is not a complete breakdown in diplomacy.

Iranian Foreign Minister Abbas Araghchi said indirect contacts through Pakistan and Qatar were continuing over a seven-day proposal to reopen the Strait of Hormuz. He said Washington wanted additional conditions; US acceptance of the whole plan has not been independently confirmed.

Tehran wants the US naval blockade on Iranian ports lifted, relief for oil-export sanctions and other existing commitments honoured before wider negotiations. Washington wants its concerns over uranium enrichment addressed. The disagreement is partly over what happens first: Safer shipping or nuclear concessions.

Pakistan’s army chief met Iranian leaders on Tuesday, but President Masoud Pezeshkian reiterated that Iran would not resume formal talks until its demands were met.

Reports of renewed military threats and vessel attacks explain why traders are cautious.

Some traders see 20–27 October as a potential deal window ahead of US midterms… because that’s when Washington will have the greatest incentive to sign terms, in order to lower inflation and win over the public. That is an opinion, not an official deadline.

So what does the market ultimately want to see?

It would be an actually agreed to peace agreement, signed. Following that, lower tanker risk, normalisation of Hormuz strait flows, and oil and bond yields falling together.

For now, US rates are still elevated near decade highs; and until they begin to break that 20D-EMA (1sd) and truly begin to cool, yields will continue to pressure equities and AI.

SpaceX Reignites AI Hopes, but Funding Is the Catch

SpaceX gave the AI trade fresh momentum. Third-quarter revenue jumped 161% from a year earlier to $14.6 billion, including $7.56 billion from “Super Intelligence”.

Which is code for artificial intelligence but Musk has decided to follow Donald Trump’s new naming convention for AI but you get the idea.

Net profit reached $4.4 billion and reported earnings were $0.35 a share. The stock rallied, drawing attention back to AI demand.

On the 4H chart, SPCX has moved back above the $160 area and its anchored VWAP resistance. The next visible supply zone is $172–176. A move back under the 50 EMA near $154 and the $150 area would weaken that rebound.

The catch is spending. SpaceX’s Super Intelligence unit recorded $16.44 billion in quarterly capital expenditure against $7.56 billion in revenue. That does not cancel out the demand story, but it raises the obvious question…

How quickly will the spending turn into cash returns?

SMH faded after gapping higher, so the earnings boost has not yet become a convincing recovery across chip stocks.

Stocks Are Bouncing. Is the Rebound Broad Enough?

Tuesday’s S&P 500 gained 0.28% and the Dow rose 1.02%. The Nasdaq Composite was almost flat at −0.02%, while the Russell 2000 climbed 1.65%. A welcome bounce, but the charts still need confirmation.

The US500 CFD was near 7,737 around the chart observation, testing the 7,743–7,817 record-high zone after a rising-wedge breakdown. Rejection there would keep the 100-day EMA band and June-high support at 7,569–7,624 in play.

The Nasdaq 100 is near its daily 100 EMA at 29,363 and retesting an old trendline from below. The Russell remains below its 20-day EMA near 2,800. AI earnings are attracting buyers, but the wider market still needs to join in.

Housing Is Weakening, but Inflation Is Not Cooperating

US pending home sales fell 7.3% in September, while housing starts slipped 5.2% to an annualised 1.221 million. Longer Treasury yields eased a little during Wednesday’s session, but the 10-year remained near 5.1%. That offers some relief for stocks, not proof that Fed cuts are coming.

The UK offered another warning: September inflation rose from 3.1% to 3.5%, with motor fuel a major driver. US gasoline prices also jumped 9.1% month-on-month in September. The problem is familiar: Growth is slowing in places, but fuel is still making inflation uncomfortable.

What Matters Now

• Oil inventories: Early reports of Wednesday’s EIA release show commercial crude stocks down 3.06 million barrels and gasoline down 2.95 million, while distillates rose 1.68 million. The diesel build complicates the shortage story; it does not erase the Gulf risk.

• Iran talks: Watch for specific, reciprocal terms, confirmed changes to the blockade and safer vessel movements. A preliminary headline alone is not enough.

• Meta and Tesla: Earnings after Wednesday’s US close will test margins, AI spending and forward guidance. Meta’s daily chart is under pressure near its 20 EMA band, with the $650 area an important conditional support test.

• Fed and bond yields: The 27–28 October Fed meeting must weigh weak housing against energy-driven inflation. The direction of the 2Y and 10Y yields will help show which risk the market is pricing.