Daily · US-Iran War, AI Capex, and Market Volatility · October 23, 2026

Key points

US-Iran Conflict and Energy Markets

US Permanent Representative to the UN Mike Waltz told the Financial Times that the United States will maintain its war with Iran until a meaningful agreement on the nuclear program is reached. The administration is increasing economic pressure through sanctions while seeking to eliminate Iran's stockpile of highly enriched uranium. Waltz noted the conflict could remain unresolved for another year, and media reports indicate that US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu are discussing resuming offensive operations after the November 3 US midterm elections.

Energy markets have reacted sharply to these developments. December Brent futures on ICE Futures peaked at $114.72 per barrel on October 23, up 5.4% intraday, marking the first time Brent traded above $114 since May 5. As of 8:09 MSK, December Brent was at $113.92, while December WTI futures on NYMEX rose to $100.32. UBS analyst Giovanni Staunovo noted that the market fears escalation could trigger new supply disruptions. The Strait of Hormuz, a chokepoint for approximately 25% of global oil and 20% of LNG supplies, remains a focal point of risk, with Iran's Islamic Revolution Guards Corps claiming attacks on vessels in the Persian Gulf.

The conflict has also affected physical supply chains. Saudi Aramco ordered staff to evacuate its Dhahran headquarters and work remotely after the site was attacked by Houthi rebels, the first such evacuation since the war began. Drone strikes killed two people at the Shaybah oilfield. Meanwhile, a divergence has emerged between futures and physical markets: while Brent futures hit five-month highs, physical Middle East crude prices softened, with Iraq's Basrah Medium sold at a $10 per barrel discount to the Dubai benchmark, reflecting continued flows out of the Persian Gulf via ship-to-ship transfers offshore Oman.

AI Capex Selloff and Tech Earnings

The Nasdaq Composite fell 2.6% on Thursday, its steepest drop since June 5, as investors grew wary of AI-related capital spending. Meta dropped nearly 7% after raising its projected capital spending for the year to $135 billion to $145 billion in its latest earnings report, despite net profit falling short of expectations. Other major tech stocks also declined: Amazon fell 4.6%, Nvidia dropped 4.4%, and Intel and Advanced Micro Devices both fell about 8%. The sell-off extended to Asian markets, with Japan's Nikkei 225 falling more than 2% and South Korea's KOSPI dropping as much as 3.5%.

Investors rotated into safe-haven assets, including Japanese government bonds, as concerns over mounting debt in AI-related sectors grew. Gartner forecasts global AI investment to reach $2.7 trillion in 2026 and $3.6 trillion in 2027. In response to the volatility, SK Hynix halted its review of a potential US IPO for its subsidiary Solidigm, citing market conditions and regulatory scrutiny in South Korea. The decision follows reports that the listing could violate rules restricting dual listings.

American Express also reported significant workforce changes, announcing it is cutting 5% of its global workforce and taking a $336 million restructuring charge to "prepare for AI." CEO Stephen Squeri stated the move aims to make the company leaner and more agile. Similarly, Barclays confirmed plans to trim 5,000 jobs, roughly 5% of its staff, in a tech-driven cost initiative. These moves signal that major financial institutions are restructuring around AI automation, a trend likely to become a board-level agenda item across the sector.

LNG Supply and Energy Infrastructure

QatarEnergy struck a deal with US exporter Cheniere Energy to buy 4 million metric tons of liquefied natural gas annually through 2054. The purchase price is indexed to the US Henry Hub price plus a fixed fee, with deliveries expected to begin in the 2030s. This agreement comes as Qatar's domestic LNG export capacity remains constrained following an Iranian bombing of its Ras Laffan production facility, which damaged two production lines and took out about 17% of its export capacity. It will take approximately three years to repair the damage.

The deal cements US LNG dominance in a market reshaped by the Iran war and Hormuz disruption. Cheniere CEO Jack Fusco stated the company looks forward to supplying QatarEnergy from both Sabine Pass and Corpus Christi. Shares of Cheniere have gained 26% since the start of the Iran war, while Venture Global, which is in advanced talks with QatarEnergy to supply 3 million metric tons annually, has seen shares rise 40%. The agreement represents less than 1% of global LNG trade but signals a structural shift in supply chains away from Middle Eastern chokepoints.

In related energy developments, Shell, PETRONAS, PetroChina, Mitsubishi Corporation, and KOGAS approved the Final Investment Decision for the LNG Canada Phase 2 expansion, doubling the facility's capacity to 28 million tons per annum. This locks in a major new Pacific-routed LNG supply source for Asia, reducing dependence on Middle East chokepoints. Additionally, the US Department of Justice filed a lawsuit seeking to block Alaska from certifying the winner of its US Senate election if incumbent Republican Sen. Dan Sullivan loses, citing concerns over voter confusion involving a candidate with the same name as the senator.

Geopolitical Escalations and Diplomacy

Tensions in the Black Sea escalated after a drone struck the Comoros-flagged commercial vessel Khoryv approximately 13 nautical miles off Romania's coast, killing one sailor and leaving three missing. Romanian President Nicușor Dan called the attack "another example of the tragic consequences of Russia's aggression against Ukraine." European Commission President Ursula von der Leyen described the attacks as "reckless" and in defiance of international law. NATO announced it would deploy additional patrol aircraft, radar systems, and intelligence personnel to the region.

In Ukraine diplomacy, US President Donald Trump stated that Elon Musk restored Ukraine's access to Starlink, though Ukrainian officials disputed whether full functionality was restored. The episode has prompted a congressional inquiry into how SpaceX's satellite technology was "degraded for Ukraine without notice." Meanwhile, Russian President Vladimir Putin confirmed Russia is ready to resume trilateral negotiations with the US and Ukraine on security guarantees after a final peace agreement. A meeting of Putin, Trump, and Chinese President Xi Jinping could take place in November at the APEC summit in Shenyang, though analysts suggest China would likely focus on symbolic diplomatic gains rather than pushing for an immediate end to the conflict.

In the Middle East, Israeli Prime Minister Benjamin Netanyahu ordered a full lockdown of the West Bank following a shoot-out near Hebron that wounded five Israelis. The move comes ahead of Israeli elections and has raised concerns about regional stability. Additionally, France is deploying 70,000 police nationwide for new protests this weekend, with President Macron postponing a visit to Nigeria and Senegal. The unrest, initially sparked by high school conditions, has broadened into a nationwide show of anger against the government, with polls showing Marine Le Pen as the front-runner in the upcoming presidential election.

Regulatory and Financial Developments

The Bank of Russia held its key rate at 14% but raised its forecast for the average 2027 rate to 12.5-13.5% from 10.5-12.5%, signaling that borrowing costs will remain elevated longer than previously expected. Governor Elvira Nabiullina noted that inflation expectations are close to their maximal values over the past two years. The ruble strengthened, with the official dollar rate set at ₽80.5381 for October 26, the first time below ₽81 since August.

In the US, the Treasury Department proposed expanding the Outbound Investment Security Program to cover North Korea, Russia, Iran, and Cuba, restricting US investments in semiconductors, AI, quantum, and other sensitive technologies. The proposal seeks to implement the Comprehensive Outbound Investment National Security Act. Additionally, President Trump invoked the Defence Production Act to fund oil production, refining, and fuel storage, citing constrained financing and supply chain limitations.

HSBC debuted its first stablecoin, RedCoin (RCHKD), on its PayMe app for over 3.3 million users in Hong Kong. The token is fully backed by high-quality liquid assets and supports peer-to-peer transfers and merchant payments. HSBC plans to integrate the stablecoin into its mobile banking app by year-end, enabling subscription to tokenized investment products. In Japan, the Ministry of Internal Affairs and Communications unveiled draft guidelines requiring 13 major social media operators to screen monetization users and label harmful AI-generated content during election periods.

Our read

The convergence of a prolonged US-Iran conflict and a sharp correction in AI-driven tech valuations creates a dual pressure on global risk assets. Energy prices are decoupling from physical supply flows, with futures pricing in geopolitical risk while physical markets remain relatively stable due to alternative shipping routes. For decision-makers, this divergence suggests that hedging strategies must account for both the premium in paper markets and the actual availability of physical cargoes. In technology, the Meta capex increase has triggered a reassessment of AI investment sustainability, leading to a rotation into defensive assets and a pause in major IPOs like Solidigm's. Financial institutions are responding by restructuring workforces around AI automation, signaling that efficiency gains will come at the cost of headcount. Geopolitically, the escalation in the Black Sea and the West Bank lockdown raises the risk of further supply disruptions, while diplomatic efforts in Ukraine remain fragmented. Investors should monitor the November 3 US midterms as a potential catalyst for renewed military action against Iran, which could further spike energy prices and widen the gap between futures and physical markets.

This analysis was produced automatically by a large-language-model system from the public sources listed below. It is AI-generated content: it reflects the sources and the model's processing, not an editorial opinion, and may contain inaccuracies. It is not investment, financial or legal advice and contains no call to action; base decisions on the original sources and on advice from qualified professionals.

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