Midterm voting opens as chip selloff spreads and Australia hikes

The Financial Times leads with voters preparing to deliver a verdict on the president, with races across the nation deciding whether Republicans keep their majorities in Congress. The Wall Street Journal frames the same contest as control of Congress on the line on the final day of voting, with Republicans hoping to defend their majorities against Democratic efforts to take the House and Senate. The Economist, in its midterm coverage, argues that Alaska, not Michigan, could decide the Democrats' Senate hopes, and asks whether the midterms could reshape American politics far beyond Congress.

Two cautions belong in any morning reading of the vote. First, prediction markets cited in morning reporting put Democrats at roughly a 75 percent chance of gaining control of the Senate, a market price, not a result. Second, the market consequence is policy timing, not a single trade: a divided or changed Congress changes what can pass on spending, taxes, and regulation, but the vote itself does not settle the oil, rates, or artificial intelligence questions that moved markets on Monday. Results are expected from 6 p.m. ET, according to The Economist's live results note.

Asia's story on Tuesday is a chip story. The Asia market wrap for November 3 reports the KOSPI down 3.59 percent to 5,648.79, giving back Monday's rebound, and the Taiex down 3.59 percent to 43,307.54. Samsung fell 4.15 percent and SK Hynix fell 5.03 percent in Seoul, on the United States chip selloff and doubts about artificial intelligence spending, with foreign investors net sellers of 1.53 trillion won. Tokyo was closed for Culture Day, so there is no Nikkei close for Tuesday.

Elsewhere in Asia the picture diverged. India's Sensex rose 1.62 percent to 76,917.85 and the Nifty 50 rose 1.58 percent to 23,810.85, a fourth straight gain. Hong Kong's Hang Seng added 0.57 percent to 23,525.97, a third straight gain. Australia's ASX 200 rose 0.34 percent to 8,886.80 despite the rate hike. Mainland China fell, with Shanghai down 0.82 percent to 3,608.10 and Shenzhen down 1.21 percent to 10,876.99, and Singapore's Straits Times eased 0.65 percent to 5,269.29.

Europe opened lower after closing higher on Monday. Early reports put the Euro Stoxx down about 0.9 percent, the DAX down about 0.9 percent, the CAC 40 down about 0.5 percent, and the FTSE 100 down about 0.3 percent at the open. By midday in London, the London midday report put the FTSE 100 down 0.5 percent at 10,708.64, with mining shares weighing, and the CAC 40 down 0.2 percent. The DAX midday report put Frankfurt down 0.63 percent at 25,818.22, with SAP down 2.95 percent, while Bayer rose 4.20 percent after a stronger pharmaceutical outlook. Monday's European closes, for context, were the FTSE 100 up 0.29 percent to 10,761.33, the DAX up 0.63 percent to 25,981.09, and the CAC 40 up 0.98 percent to 8,047.69.

In Canada, the S&P/TSX closed Monday at 35,801.09, up on the day, led by gold and real estate shares. Tuesday's Canadian focus is earnings after the close, with Suncor reporting, covered below.

The Reserve Bank of Australia decision for November 3 lifted the cash rate by 25 basis points to 4.85 percent, its fifth increase this year, on a six to three vote. The three dissenters preferred to hold at 4.60 percent, placing greater weight on downside risks as the housing market weakened and unemployment rose. Governor Michele Bullock said it was unclear what the next move would be. Markets seized on the less hawkish tone, pushing the Australian dollar about 0.3 percent lower to 0.6977 United States dollars, and strengthening bets that the bank will leave rates unchanged at its December 8 meeting.

The bank's updated forecasts explain the tension in the vote. Headline inflation is set to hit 4.5 percent in the fourth quarter, before easing back to the target band of 2 to 3 percent in the second half of next year, and the bank now does not expect inflation to fall below 3 percent until late 2027, about nine months later than it forecast in August. Unemployment rose to 4.7 percent in September, and the bank now expects it to keep rising. The decision is therefore a hike with a divided board, not a unanimous tightening signal.

No Bank of Canada, Federal Reserve, European Central Bank, Bank of England, or Bank of Japan decision is due today. The standing rates are the Federal Reserve at 3.75 to 4.00 percent, the Bank of Canada at 2.50 percent, the European Central Bank at 2.50 percent, and the Bank of Japan at 1.25 percent. The Bank of England decision is due Thursday, November 5, widely expected to be a 25 basis point increase to 4.00 percent, its first hike since 2023. The United States 10 year yield traded around 4.89 to 4.92 percent in morning snapshots, and reported futures pricing put the chance of a December Federal Reserve quarter point increase at about three quarters. In Europe, nominations to succeed European Central Bank President Christine Lagarde are due from member states by Friday, with eurozone finance ministers set to discuss them on November 9.

Monday's plunge is the anchor for Tuesday's oil market. West Texas Intermediate fell 7.36 percent to settle at 96.46 dollars a barrel, and Brent fell 7.63 percent to settle at 104.77 dollars a barrel, on hopes for talks between the United States and Iran in Doha. Tuesday's move so far is a partial retracement, not a new trend: the Reuters report on the Qeshm Island strike puts West Texas Intermediate up 1.66 percent at 98.06 dollars and Brent up 1.76 percent at 106.61 dollars by 0744 GMT, after a United States official said on Monday that the United States had struck Iran's Qeshm Island, described by some officials as defensive and aimed at preventing attacks on commercial ships in the Strait of Hormuz.

A senior Iranian official told Reuters on Tuesday that both countries were far from reaching a deal to end the war, and that Tehran would not accept Washington's excessive demands. That statement, alongside the strike report, is why the risk premium is coming back into the price even though no settlement has changed hands. Until tankers move freely through Hormuz, oil remains a headline market: diplomacy headlines pulled more than 7 percent out on Monday, and escalation headlines are putting part of it back on Tuesday.

Metals moved the other way on Tuesday morning. In the commodities wrap at 12:36 GMT, gold traded 1.16 percent lower at 3,923.50 dollars an ounce and silver 3.36 percent lower at 49.18 dollars an ounce, giving back part of Monday's rebound, while West Texas Intermediate gained 0.74 percent to 97.17 dollars and Brent gained 0.29 percent to 105.07 dollars. Natural gas closed Monday down 1.45 percent at 2.8560 dollars per million British thermal units. Copper was reported at 14,161 dollars a tonne, down 0.16 percent, in a separate morning snapshot, so this edition does not present a single copper settlement as settled.

Shopify reported third quarter revenue of 3.74 billion dollars, up 32 percent from 2.84 billion dollars a year earlier, just shy of the 3.75 billion dollars expected, according to the Shopify third quarter report. Net income rose to 462 million dollars, or 36 cents a share, from 264 million dollars a year earlier, and adjusted earnings were 49 cents a share against 47 cents expected. Gross merchandise volume reached 119.15 billion dollars, up 29 percent. For the fourth quarter, the company expects revenue to grow at a low thirties percentage rate, with gross profit dollars growing at a high twenties rate. Shopify shares fell in early trading on Tuesday, with snapshots differing by timing, including a fall of 8.70 percent by 9:53 a.m. ET in one report.

Pfizer reported third quarter revenue of 16.583 billion dollars, broadly stable against 16.654 billion dollars a year earlier, according to the Pfizer third quarter report. Adjusted diluted earnings were 0.87 dollars a share, against about 0.73 dollars expected, while reported diluted earnings fell 9 percent to 0.56 dollars. Revenue excluding Comirnaty and Paxlovid grew 7 percent on an operational basis, and revenue from launched and acquired products rose 32 percent operationally. Pfizer raised full year 2026 revenue guidance to 62.0 billion to 64.0 billion dollars, from 60.5 billion to 62.5 billion dollars, and adjusted earnings guidance to 2.95 to 3.05 dollars, from 2.80 to 3.00 dollars.

Apple remains the cautionary tale from Monday's results. The company reported a record September quarter, with revenue of 114.5 billion dollars and earnings of 2.10 dollars a share, but guided holiday quarter gross margin to 45 to 46 percent, against 46.9 percent expected, citing rising memory costs. The Financial Times headline puts it plainly: Apple warns that unprecedented memory chip costs will hit margins. Apple shares fell about 4.24 percent in premarket trading in one morning summary, and about 4.5 percent in another, a range that reflects different snapshots, not a single settled print. Palantir, which beat on revenue and raised guidance on Monday, also slipped in premarket trading, with reports ranging from about 3 percent in extended trading on Monday to larger premarket falls on Tuesday. The market is rewarding profit and guidance conversion, not revenue growth alone.

After the close today, Advanced Micro Devices reports, the next chip test, and Suncor reports after the close as well, with a webcast on Wednesday, November 4. Suncor's report will cover oil sands, upgrading, offshore production, refining, and Petro-Canada retail, according to the Suncor release announcement. Analyst estimates for Suncor differ by source, so this edition does not present a single consensus figure as settled.

Premarket chip trading on Tuesday was a partial rebound. The SOXX semiconductor exchange traded fund rose 2.70 percent in premarket trading after falling 3.79 percent on Monday, with SanDisk up 4.90 percent, Micron up 3.56 percent, Advanced Micro Devices up 3.00 percent, Intel up 2.85 percent, and Nvidia up 1.67 percent, according to the premarket summary. That bounce sits next to Asia's falls: Samsung down 4.15 percent and SK Hynix down 5.03 percent in Seoul, and the Philadelphia Semiconductor Index down 3.37 percent on Monday after falling 7.2 percent on Friday.

The tension is the same as on Monday. Memory prices are helping memory makers' revenue outlook and hurting device makers' margins, as Apple's guidance shows. Investors are therefore splitting the chip trade, rewarding the memory and component names in premarket trading while still selling the device and platform names whose margins absorb those costs. Advanced Micro Devices after the close will test whether that split holds into the evening.

Anthropic's amended filing on Monday, already covered for its 895.4 billion dollars in purchase commitments and leases, contains a second item that drew attention on Tuesday. The filing's risk factors say the company's increasing use of artificial intelligence systems to accelerate its own research and development may cause model capabilities to advance more rapidly than its ability to develop corresponding safety measures, and that internal estimates for future models indicate it may imminently meet its Responsible Scaling Policy definition of dramatically accelerated progress attributable to artificial intelligence, according to the Anthropic filing summary. The filing adds that no current model has been designated as having crossed that line, and that the company is still assessing the data. That distinction matters: the language describes an estimate about future models, not a shipped capability change today.

The Financial Times headlines on Tuesday sharpen the funding side of the same debate: Anthropic reveals 900 billion dollars in artificial intelligence spending commitments ahead of its initial public offering, OpenAI slashes its funding target by 10 billion dollars as technology anxieties mount, and Apollo lends a record 114 billion dollars as it piles into artificial intelligence financing. The Financial Times also reports that Nvidia orders data centre clients to reduce China exposure. Each of those items is reported in headline form in this edition, without detail beyond the headline, because the underlying articles were not opened in full for this edition.

The Economist's technology coverage adds a longer view: Google's 500 billion dollar bloodbath reflects the danger it faces from artificial intelligence, and do not expect supersize profits from Anthropic soon. Together, the headlines describe a market that is no longer debating whether artificial intelligence spending is large, but whether it earns its keep, and on what timetable.