Brent Tops $115 as Fed Is Expected to Hold Rates Today
Brent crude topped $115 a barrel on Wednesday morning. According to TipRanks, Brent was up 1.1% at $115.10 as of 8:20 a.m. ET, with WTI up 1.8% at $101.70. Two reports drove the move: a WSJ report on a possible US campaign against Iran, and a Houthi attack on Saudi Arabia's Ras Tanura refinery.
Per the WSJ, the US told Gulf allies to prepare for a short, intense military campaign against Iran after the midterms. Oil is adding pressure on rates this morning. The 10-year Treasury yield is back above 5%, within 1 basis point of Tuesday's close.
The Fed announces its rate decision at 2:00 p.m. ET (9:00 p.m. in Istanbul). Swaps cited by Bloomberg price a 9.4% chance of a hike today, with the policy rate at 3.75%-4.00% since September's quarter-point hike. The real question is December: swaps put hike odds at 82%, rate futures at about 75%.
Chair Kevin Warsh holds a press conference at 2:30 p.m. ET (9:30 p.m. in Istanbul). September CPI came in at 3.7% year over year, above expectations. Oil above $115 makes it harder for Warsh to close the door on December.
Overnight news from Asia supported the AI trade. SK Hynix reported third-quarter operating profit of about $62.5B (83.3 trillion won, at roughly 1,330 won per dollar), up 632% year over year. The result landed on top of Tuesday's AI rally and spread to memory stocks.
After Tuesday's (October 27) close, Visa reported fiscal fourth-quarter revenue of $12.1B, up 13%, and adjusted EPS of $3.48. It guided fiscal 2027 EPS growth to low double digits to low teens, and shares fell 1.1% after hours. beat with EPS of $7.68 against $7.49 expected, while missed at $2.15 against $2.25.
