The Midday Tape
Geopolitical headlines out of the Strait of Hormuz are whipsawing futures in real time, while underneath the noise a genuine rotation out of crowded winners and into defensives and small caps is taking hold.
Hormuz headlines are driving the tape, not fundamentals.
Traders spent the morning trading S&P futures (SPY) off dueling reports: Qatar pushing a diplomatic reset between Washington and Tehran, a diplomat denying that "deal is close" framing, and Secretary of State Rubio saying oil flow through Hormuz is nearly back to pre-war levels. Oil (USO) is down nearly 1% on the session as Energy Secretary Wright talks up domestic refinery expansion and a roughly $967 million DOE grid investment. The result: energy is the lone sector in the red today while defensives lead the tape, a classic risk-off tell even as the S&P (SPY) itself is modestly higher. Housing data added to the mixed macro picture, with starts firmer but pending home sales down 7.3%, a soft spot for rate-sensitive sectors even as Treasurys (TLT) catch a bid.
Earnings beats are doing the heavy lifting in financials and industrials.
KeyCorp (KEY) is higher after a Q3 beat and FY26 guidance above estimates, one of the clean wins of the morning. Hasbro is up sharply after topping estimates, raising FY28 sales guidance, and doubling its FY26 buyback target. RTX disclosed a record $340 billion order backlog, with its engine aftermarket business surging 21%, a number now drawing direct comparisons to GE Aerospace's own strong repair demand, which is lifting the airline group (UAL, DAL, AAL) alongside the drop in crude.
Michael Burry's rotation call is playing out in real time.
His warning of a 2000-style unwind out of market winners lines up with what's on the tape: the Russell (IWM) is outperforming the Nasdaq (QQQ) today while megacap names like Apple (AAPL) and Alphabet (GOOGL, GOOG) sit in the red. Semis are under separate pressure after SK Hynix dropped 30% on China competition fears and Solidigm IPO doubts, even as Nomura calls it a buying opportunity. CoreWeave (CRWV) is a standout laggard, with bond yields spiking to 15.5% and shares sinking to 17-month lows, a credit-market crack in the AI infrastructure trade worth watching.
Crypto and single names are moving on their own catalysts.
Bitcoin tapped $83,000 on Iran-deal optimism, dragging XRP and ETH higher and putting a bid under Strategy (MSTR). Tesla (TSLA) is up nearly 2% on renewed chatter about a potential SpaceX (SPCX) tie-up.
Still ahead this afternoon:
Capital One, Interactive Brokers, Intuitive Surgical, United Airlines, Alaska Air and Netflix all report after the close, with Netflix drawing extra attention on ad-revenue expectations. Expect more Hormuz-driven futures swings into the bell.
Bottom line: this is a headline-driven, rotation-heavy session, defensives and small caps over megacap tech, earnings beats getting rewarded individually while energy and AI-credit names take the hit.