Iran vows to bar U.S. warships; envoy warns — October 25, 2026

Top U.S. Stories

• Iran draws a line in the Gulf. Iran’s armed forces chief of staff said on state TV Saturday that U.S. warships will not be allowed into the Persian Gulf “under any circumstances,” while U.S. Ambassador to Turkey Tom Barrack warned Washington could strike Iran as soon as this weekend. President Trump distanced himself from the remark, having earlier pledged no strikes before the midterms. Why it matters: With Brent already at its highest since June 2022, any weekend military action could set the tone for oil and stocks on Monday.
• Fed week ahead. The Fed is widely expected to hold at its Oct. 27–28 meeting, but CME FedWatch shows a 78% chance of a December hike, as higher oil prices feed “higher for longer” expectations. Why it matters: A hawkish tone would keep mortgage and borrowing costs elevated heading into the holidays.
• Big Tech earnings test. Microsoft, Alphabet and Amazon report next week, after Meta fell 7% as heavy AI spending pushed quarterly free cash flow negative. Why it matters: Investors want proof the AI capex boom is paying off.
• Midterm sprint. With the Nov. 3 election nine days away, President Trump is rallying in Georgia on Saturday and Michigan on Sunday.
• Gulf diplomacy on hold. The EU-GCC summit planned for Oct. 24 in Riyadh was postponed amid Houthi attacks on Saudi Arabia.

Compass Insight

Markets closed last week weighed down by two forces: expensive oil and doubts about the payoff from AI spending. The weekend added a third — sharper rhetoric between Tehran and Washington. The key for investors is to separate words from actions: a war of statements is not the same as renewed strikes, and Monday’s open will likely hinge on which one the weekend delivered. In the short run, watch oil, the Fed’s Oct. 28 statement and Big Tech guidance. Over the longer run, the bigger question is whether energy-driven inflation forces the Fed into hikes just as AI enthusiasm cools — a combination that would pressure both bonds and growth stocks. Diversification and patience matter more than prediction right now.

Markets

Friday closes: the Dow fell 652.82 points to 52,215.16, the S&P 500 slipped 0.52% to 7,623.68 and the Nasdaq lost 0.21% to 25,955.34. Brent settled at $116.72, its highest since June 2022. Gold slipped below $4,000 and headed for a steep weekly loss as rate-hike bets rose. USD/JPY stood at 156.80 (ECB reference rate, Oct. 23). In Japan, the Nikkei ended at 62,693.16, and the Bank of Japan meets Oct. 29–30.

Stocks in Focus

• Airlines (United, Delta): fell Friday on rising fuel costs — the sector most exposed to weekend Gulf headlines.
• Meta: down 7% after earnings as AI capex pushed quarterly free cash flow negative.
• Microsoft, Alphabet, Amazon: reporting next week; capex guidance is the focus.

Auto-generated and AI-written. Not investment advice.