U.S. Stock Futures Rise and Brent Falls About 2% as Trump Says No Iran Strike 'Today' and Mediators Travel to Tehran, Ahead of Wednesday Fed Decision
Early Monday, S&P 500 and Nasdaq-100 futures were up roughly 0.3% to 0.6% depending on the source and time, while Brent crude traded near $114.5. Investors were looking ahead to the Fed's Wednesday rate decision, where Bank of America is in the minority calling for a hike, and to earnings from Microsoft, Alphabet and Amazon.
Futures Edge Up as Brent Slips 2% Toward $114.5
Early Monday, October 26, 2026, U.S. stock futures rose. S&P 500 futures were up about 0.3% to 0.4%. Nasdaq-100 futures were up about 0.3% to 0.6%, depending on the source and the time of day[1][2].
Those gains are small, and they follow a Friday drop in the S&P 500. They look like relief, not a change of trend. Oil moved too. Brent crude, the global benchmark, fell about $2, or roughly 2%, to about $114.5 a barrel. One early print had it down $2.21, or 1.89%, at $114.51[3]. U.S. West Texas Intermediate (WTI) fell to about $101[3][8].
Here is the tension. Oil is still far above pre-war levels. Brent ended last week up 6%, and WTI was up 2.3%, after Houthi attacks on Saudi Arabia raised supply fears[3]. A 2% dip sits on top of a big climb.
Who gets credit for the dip
On Sunday, President Trump told reporters, "there will not be a strike today" on Iran. He also said it was "getting to be decision time" on whether to make a deal or resume attacks[2][4]. Qatari mediators traveled to Tehran the same day[3].
Outlets disagree on which event moved the price. Benzinga led with Trump's quote as the cause, and its headline put the oil retreat right after it[4]. Reuters tied the drop to hopes that hostilities would ease, and it cited the Qatari mediation[3].
The White House has reason to like the first reading. Its stance is that pressure forces Tehran to choose between a deal and force. On that view, "decision time" is leverage, and "no strike today" leaves room for talks[2][4]. An official briefed on the matter said the administration coordinated the Qatari effort[3].
Gulf states see it differently. A war on their doorstep threatens their oil output, their airports and their people. They argue that diplomacy, not deadlines, lowers risk[3]. Senior Saudi, Turkish and Pakistani officials were due to meet Iranian leaders Monday[3].
Neither account removes the risk. The Houthis said they hit an airport and oil sites in Saudi Arabia on Saturday[3]. That keeps a risk premium in the price even when talks make progress.
Wednesday at 2:00 p.m.
The bigger test comes Wednesday, October 28. The Federal Reserve announces its rate decision at 2:00 p.m. ET, with a press conference at 2:30 p.m.[9]. The Fed's benchmark rate is 3.75% to 4.00%, after a quarter-point hike on September 16[7].
Most of the market expects a hold. Readings published around Monday put the odds of a hold at roughly 86% to 91%[8][12]. A Reuters poll found 94 of 100 economists expecting a hold in October. All 100 expected a hike in December.
Bank of America is in the minority. In an October 19 client note, it said it still expects a quarter-point hike this week. It acknowledged that this is a minority view[5][6]. At that point it put the odds near 20%[5].
Why a hike is on the table at all
Bank of America's case starts with the committee itself. Most members backed two hikes this year. So why not make the second one now and keep a third open for December[5][6]?
The bank also points to core PCE, the Fed's preferred inflation gauge. It leaves out food and energy, so it shows whether price rises are spreading beyond gasoline. The bank says core PCE "could plausibly end the year at 3.4%," against a 2% target[5][6].
It also warns that a "booming nominal economy" makes it easier for businesses to pass energy costs on to customers[5]. Its note says inflation "has gotten worse since the Sep meeting"[5][6]. A forecasting desk also builds its standing by making clear calls that differ from the pack. Bank of America itself said it has "low conviction" about how Fed Chair Kevin Warsh thinks, but gives him "the benefit of the doubt"[5].
The other camp, which most market pricing reflects, starts from what an oil jump is. It is a supply shock. Prices rise because there is less oil, not because people are spending too much. A hike works by making borrowing costlier, which cools spending. But it can't pump more oil. So hiking into a supply shock could slow hiring without fixing what is pushing prices up.
The Fed has its own pressures. It wants to keep its credibility on inflation without setting off a recession or a market slide just before the November 3 midterms. Keeping a December move possible lets it wait for more data[5][13]. It also faces pressure from an administration that wants low rates[13]. A surprise hike would raise costs for mortgages, cards and businesses. A hold with hawkish language would keep that risk alive.
Big Tech's AI bill meets higher rates
The same week brings earnings. Microsoft and Alphabet report Wednesday, October 28. Amazon reports Thursday, October 29[9].
The two stories connect through how stock prices work. A stock price is today's value of profits expected years from now. Higher interest rates shrink that value. They hit hardest the companies whose profits sit furthest in the future, like AI builders[9][10].
Those firms are spending heavily. Hyperscalers are expected to spend more than $800 billion on capital projects, known as capex. That means money for data centers and chips. Higher rates raise the return those projects must earn[9].
Bulls say the spending is building real capacity. They point to cloud demand, with bookings running into 2028, as proof the payoff is coming. They add that cooler oil and a Fed on hold support stocks[9][10]. Companies want to show the spending is turning into revenue. Investors want evidence it will earn an acceptable return[9].
Last week gave a warning. Meta's shares fell after AI spending turned its free cash flow negative. Free cash flow is the cash left after running the business and paying for new equipment[9][10]. These firms are a large part of the S&P 500, so their reports could move the whole index.
Same morning, different headlines
Outlets chose different threats to lead with. Reuters and Bloomberg wrote plain, market-focused pieces. Reuters used "edge up," a verb that fits a move under 1%. Bloomberg flagged a heavy week of earnings, AI-funding worries and central-bank meetings[1][2].
Fox Business ran a segment titled "Trump's Iran warning rattles oil market as Fed signals more hikes." That puts the threat and the Fed's hawkishness first. The segment is undated, and it doesn't reflect Monday's oil pullback[11]. Another Reuters story, carried on Yahoo Finance, framed the week around a "rickety AI market rally"[10].
Smaller outlets leaned further. 24/7 Wall St. labeled Bank of America's call a minority view. But its phrase "sticking with" casts the call as contrarian conviction[5]. Hoodline's "Oil Tops $111" headline used figures from an earlier session, so it can mislead about the current price[14]. I couldn't find dedicated Monday coverage from The New York Times, The Washington Post, The Guardian, The Wall Street Journal or the New York Post.
One label is unsettled. Reuters calls last week's Brent level "near six-month highs." Bloomberg's copy calls it the "highest close since mid-2022," which matches AP's description[2][3].
What's next is Wednesday. The Fed's call, Tehran's answer to the mediators, and the first Big Tech earnings all land within days of each other. Each could undo Monday's small gains.
Summary
U.S. stock futures rose early Monday, October 26, 2026. Oil prices fell back from last week's highs. S&P 500 futures were up about 0.3% to 0.4% and Nasdaq-100 futures about 0.3% to 0.6%, depending on the source and time, after the S&P 500 fell on Friday[1][2]. Brent crude, the global oil benchmark, was down about $2, or roughly 2%, at about $114.5 a barrel[3]. On Sunday President Trump told reporters, 'there will not be a strike today' on Iran. He also said it was 'getting to be decision time' on whether to make a deal or resume attacks[4]. Qatari mediators traveled to Tehran the same day[3]. Reuters tied the oil decline to hopes of easing hostilities, while Benzinga credited Trump's remark.
The week has two big tests. On Wednesday, October 28, the Federal Reserve announces its interest-rate decision at 2:00 p.m. ET[9]. Its benchmark rate now sits at 3.75% to 4.00%, after a quarter-point hike on September 16[7]. Most traders expect the Fed to hold. Bank of America disagrees. It still expects a quarter-point hike this week, arguing that inflation 'has gotten worse since the Sep meeting'[5][6]. Microsoft and Alphabet also report earnings Wednesday, and Amazon reports Thursday[9].
The main dispute is over what the Fed should do about an inflation surge driven by oil. One camp, including Bank of America, says the Fed must act before high energy costs spread into all prices. The other camp, which most market pricing reflects, says a rate hike cannot produce more oil. On this view, a hike would only slow an economy already under strain. A second, related question is whether Big Tech's huge AI spending can still be justified when borrowing costs are rising[9][10].
The Event
In early trading Monday, October 26, 2026, Nasdaq-100 futures rose about 0.3% to 0.6% and S&P 500 futures about 0.3% to 0.4%, depending on the source and time[1][2]. Brent crude futures fell about $2, or roughly 2%, to about $114.5 a barrel. U.S. West Texas Intermediate (WTI) crude fell to about $101[3][8]. The day before, President Trump told reporters that 'there will not be a strike today' on Iran[4]. Qatari mediators traveled to Tehran the same day[3].
Undisputed Facts
- Brent crude futures were down $2.21, or 1.89%, at $114.51 a barrel on Monday morning, after settling nearly $3 higher on Friday[3].
- Brent ended last week up 6%, and WTI ended it up 2.3%, after Houthi attacks on Saudi Arabia raised supply fears[3].
- President Trump said on Sunday that 'there will not be a strike today' on Iran, and that it was 'getting to be decision time' on a deal or renewed attacks[2][4].
- The Fed's target range is 3.75% to 4.00%, set by a quarter-point hike on September 16[7].
- The Fed announces its decision Wednesday, October 28, at 2:00 p.m. ET, with a press conference at 2:30 p.m.[9].
- In an October 19 note, Bank of America said it still expects a Fed hike in October, a call it acknowledged was a minority view[5][6].
- Alphabet and Microsoft report earnings Wednesday, October 28, and Amazon reports Thursday, October 29[9].
The Pressure
Strip away the moralizing and blame. What structural realities persist regardless of which narrative wins?
- Energy supply shock
- Brent near $115 reflects real supply risk from Houthi strikes on Saudi facilities and from the U.S.-Iran standoff. A presidential remark can shave about 2% off the price for a day, but the risk premium remains while attacks continue[3].
- Fed's inflation constraint
- The Fed has already hiked once, in September. Bank of America's projection that core PCE plausibly ends 2026 at 3.4%, against a 2% target, shows why the hiking debate is live even if the Fed holds this week[5][7].
- AI capex payback
- Hyperscalers are expected to spend more than $800 billion on capital projects. Higher rates raise the return those projects must earn to justify their cost, so this week's earnings and the Fed decision interact[9].
- Midterm calendar
- With the November 3 midterms a week away, the White House has an interest in lower gasoline prices. That shapes how it talks about strike timing[4][13].
Material realityBefore any Fed decision or earnings report, a few things are fixed. Oil is far above pre-war levels, with Brent near $114.5 and WTI near $101[3][8]. The Fed's policy rate is 3.75%-4.00% after a September hike[7]. Gulf energy sites are still being attacked[3]. Monday's futures moves were small, under 1%, and came after Friday's decline. So they show relief, not a change of trend[1][2]. Market-implied odds of an October hike have fallen sharply. Bank of America put them at about 20% on October 19[5]. Readings published around Monday put a hold at roughly 86% to 91%[8][12]. A Reuters poll of economists found 94 of 100 expecting a hold in October, and all 100 expecting a hike in December.
Narrative as a weaponThree actors are shaping how this story is read. The White House wants Trump's words seen as the switch that moves oil: 'no strike today' as restraint, 'decision time' as leverage. Gulf mediators and the regional press want the price relief credited to diplomacy. Bank of America and the outlets that amplify it want the October hike treated as a live risk, though market pricing puts it at a small minority chance. U.S. right-leaning business TV leaned on threat and hawkishness. Reuters-sourced coverage on mainstream portals leaned on doubts about AI spending. Each choice of emphasis is a forecast in disguise. Note one conflict: Reuters calls last week's Brent level 'near six-month highs', while the Bloomberg copy on The Edge Malaysia calls it the 'highest close since mid-2022', consistent with AP's description of the October 23 settlement. Readers should treat those 'highest since' labels as unsettled[2][3].
How Each Side Sees It
Each major actor’s view — how it frames things, its underlying incentive, and how it’s materially affected. Tap a side to read it.
Frames it asThe Fed's job is stable prices and maximum employment. It has already raised rates once this cycle, in September, and has kept the option of doing more[7][13]. Officials have signaled no urgency to hike again right away[8]. The case for waiting goes like this. An oil price jump is a 'supply shock': it raises prices because there is less oil, not because people are spending too much. A rate hike works by making borrowing costlier, which cools spending. But it cannot pump more oil. So hiking into a supply shock can slow hiring without fixing what is pushing prices up.
WhyThe Fed wants to keep its credibility on inflation without setting off a recession or a market slide just before the November 3 midterms. Keeping a December move possible lets it wait for more data[5][13].
Impact on themA surprise hike would raise borrowing costs for mortgages, cards and businesses. A hold with hawkish language would keep that risk alive for December. Either way, the Fed faces political pressure from an administration that wants low rates[13].
Frames it asBank of America argues that the Fed already accepted the case for more than one hike, since most of the committee backed two hikes this year. So why not make the second one now and keep a third open for December[5][6]? It points to core PCE, the Fed's preferred inflation gauge. That measure leaves out food and energy, so it shows whether price rises are spreading beyond gasoline. The bank says core PCE 'could plausibly end the year at 3.4%' against a 2% target[5][6]. It warns that a 'booming nominal economy' makes it easier for businesses to pass energy costs on to customers[5].
WhyA forecasting desk earns its standing by being right when it is out of consensus. A strong, clearly argued call also builds its brand with clients who trade on rates. Bank of America itself said it has 'low conviction' about how Warsh thinks, but gives him 'the benefit of the doubt'[5].
Impact on themIf the Fed holds, the bank's call misses, though its December view may still hold up. If the Fed hikes, clients who positioned with Bank of America gain, and the market reprices sharply[5][15].
Frames it asThe bullish case holds that AI spending is building real capacity, and that cloud demand, with bookings running into 2028, shows the payoff is coming[9][10]. Bulls say a cooler oil price and a Fed on hold support stocks. The skeptics' case turns on how stock prices work. A stock price is today's value of profits expected years from now. Higher interest rates shrink that value. They hit hardest the companies whose profits sit furthest in the future, like AI builders. So rising rates and huge capital spending ('capex', money spent on data centers and chips) together raise the bar for proof[9][10].
WhyCompanies want to show that their spending is turning into revenue. Investors want evidence that more than $800 billion in expected hyperscaler spending will earn an acceptable return[9].
Impact on themMeta's results last week showed the risk. Its shares fell after AI spending turned its free cash flow negative. Free cash flow is the cash left after running the business and paying for new equipment[9][10]. Wednesday's and Thursday's reports could move the whole index, since these firms are a large part of the S&P 500.
Frames it asThe White House presents its stance as pressure that forces Tehran to choose between a deal and renewed force. On this view, Trump's 'decision time' message is leverage, not recklessness, and Sunday's 'no strike today' remark leaves room for diplomacy[2][4]. It coordinated the Qatari mediation effort, according to an official briefed on the matter[3].
WhyThe administration wants a deal on its own terms, lower gasoline prices before the November 3 midterms, and a credible threat of force, all at once[3][4].
Impact on themEach Trump remark moves oil prices within hours. That gives the White House influence over prices, and also makes it visibly responsible for them[4][14].
Frames it asRegional states argue that a war on their doorstep threatens their own oil output, their airports and their people, as the Houthi strikes on Saudi Arabia show. They say diplomacy, not deadlines, is what lowers risk[3]. Qatar sent mediators to Tehran on Sunday. Senior Saudi, Turkish and Pakistani officials were due to meet Iranian leaders on Monday[3].
WhyThey want to end attacks on Gulf energy infrastructure and keep shipping open. OPEC producers in the Gulf benefit from high prices only while they can still export[3].
Impact on themSaudi facilities remain under attack, and the Houthis said they hit an airport and oil sites on Saturday[3]. That keeps a risk premium in oil even when diplomacy makes progress.
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The Bias Ledger average rating 3.7
The same story, as framed by outlets across the spectrum, ordered least to most biased. The bias score (1 = straight, 10 = heavily spun) is an AI assessment of that framing — click an outlet to see its track record. The tell is the word choice or omission that reveals the angle.
| Outlet | Vantage | Bias | How they frame it | The tell |
|---|---|---|---|---|
| Reuters | U.S./global center (wire) | 2 | US stock futures edge up as oil falls heading into earnings barrage | Plain and sequenced. The verb 'edge up' fits a sub-1% move. It ties the oil decline to Qatari mediation and hopes of easing hostilities, both attributed. |
| Bloomberg | U.S. center, business | 2 | US equity futures climb as crude oil price dips | Market-focused and figure-heavy. The version I checked puts the futures gains near 0.3% and flags a heavy week of earnings, AI-funding worries and central-bank meetings. |
| 24/7 Wall St. | U.S. retail investing site | 3 | BofA Is Sticking With an October Rate Hike Even as Markets Bet Against It | Accurately labels BofA's call a minority view. 'Sticking with' casts it as contrarian conviction, which gives an outlier forecast more prominence than its market weight. |
| Benzinga | U.S. retail-trader financial media | 4 | 'There Will Not Be a Strike Today,' Says Trump on Iran: Oil Prices Retreat, Dow Futures Rise | Leads with Trump's quote as the single cause. It skips the Qatari mediation that wire reports gave equal weight. |
| Fox Business | U.S. right | 5 | Trump's Iran warning rattles oil market as Fed signals more hikes | 'Rattles' and 'signals more hikes' put threat and hawkishness first. The segment is undated and does not reflect Monday's oil pullback. |
| Hoodline | U.S. local news aggregator (AI-assisted) | 6 | Oil Tops $111 as Iran Strike Fears Rattle Wall Street | Says investors were spooked 'nationwide' and frames the piece around fear. The figures come from an earlier session, so it can mislead about the current price. |
References
- US Stock Futures Edge up as Oil Falls Heading Into Earnings Barrage — Reuters · Global wire service, commercially owned by Thomson Reuters; center
- US equity futures climb as crude oil price dips — Bloomberg · Business wire owned by Bloomberg L.P.; center, market-focused
- Oil drops from near six-month highs on hopes Iran war hostilities to ease — Reuters · Global wire service; republished by a Pakistani business daily
- 'There Will Not Be a Strike Today,' Says Trump on Iran: Oil Prices Retreat, Dow Futures Rise — Benzinga · U.S. retail-trader financial media, ad- and subscription-funded
- BofA Is Sticking With an October Rate Hike Even as Markets Bet Against It — 24/7 Wall St. · U.S. retail investing site, ad-funded; summarizes a bank client note
- Why BofA still sees an October Fed rate hike — Investing.com · Trading-platform news site, ad- and brokerage-funded; relays bank research
- Federal Reserve Interest Rate Predictions Next Week: October 27–28, 2026 — Norada Real Estate · Real-estate investment marketing blog; secondary source, low authority
- Catalyst-filled trading week ahead; oil prices ease - what's moving markets — Investing.com · Trading-platform news site, ad- and brokerage-funded
- Alphabet and Microsoft Earnings Will Put Investors' AI Stress to the Test — The Daily Upside · U.S. business newsletter, ad-funded; center
- Earnings flood, Fed meeting will test rickety AI market rally — Reuters · Wire copy on Yahoo Finance, a portal owned by Apollo Global Management; center
- Trump's Iran warning rattles oil market as Fed signals more hikes — Fox Business · U.S. right-leaning business network, owned by Fox Corp.
- Dow Jones futures rise on easing Middle East tensions, Fed rate pause bets — FXStreet · Forex-trading news site, broker-advertising funded
- Analysis: Everyone expects the Fed to hold rates in October. Kevin Warsh could surprise us all — CNBC · U.S. business network owned by Versant; center, market-focused
- Oil Tops $111 as Iran Strike Fears Rattle Wall Street — Hoodline · U.S. local news aggregator, AI-assisted, ad-funded
- Bank of America revamps interest-rate forecast for rest of 2026 — TheStreet · U.S. financial news site owned by Arena Group; center