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Apple margin outlook pressures tech as reported U.S. strike lifts oil
Apple's weak margin forecast pressures tech shares as a reported U.S. strike on Iran's Qeshm Island lifts oil prices.
Key points
- Apple forecast a gross margin of 45-46% as it contends with a global memory chip crunch.
- Apple reported EPS of $2.10 against $1.99 expected and revenue of $114.48 bn against $113.39 expected.
- A U.S. official told The Wall Street Journal Washington has carried out 'limited strikes' against Iran in recent weeks.
Why it matters. Apple's margin outlook is expected to pressure the tech sector, while oil prices are climbing after a significant sell-off on Monday as the Iran strikes developed.
Apple shares came under premarket pressure after a gross margin forecast of 45-46% overshadowed EPS of $2.10 against $1.99 expected and revenue of $114.48 bn against $113.39 expected. Morgan Stanley cut its Apple price target to $350 from $355, while JPMorgan lowered its target to $355 from $360. Iran said it is ready to respond 'forcefully' to U.S. strikes that reportedly hit Qeshm Island overnight, pushing oil higher.
Latest updates
Apple margin outlook pressures tech as reported U.S. strike lifts oil
Midterm voting gets underway amid volatility across stock and oil markets This is CNBC's Morning Squawk newsletter. Subscribe here to receive future editions in your inbox. Hello, this is Leonie Kidd with today's edition of Morning Squawk. Investors will need to divide their attention today. On the one hand, Apple will put pressure on the tech sector, after its disappointing margin forecast overshadowed a solid set of earnings. But the oil trade is also heating up, with crude prices accelerating gains through overnight trade, following a surprise attack on Iran's Qeshm Island. And, of course, it's midterm day! Happening now: Correction territory The nerves around AI stocks are rippling into Asian trade , with the tech-heavy South Korean and Taiwanese markets both trading sharply lower, and chip stocks down across Europe. The Nasdaq-100 closed in correction territory on Monday, more than 10% below its Oct. 6 record high. Futures are flat , but with more action in the oil markets and midterm voting underway, it's set to be another unpredictable session. Analysis: Futurum Group's Daniel Newman told CNBC that the next leg of the AI trade is not earnings-dependent, saying, "A ceasefire could do more for the AI trade this month than any earnings print. Lower oil takes pressure off a December hike and cuts the cost of capital for everyone building data centers." Coming up: Squawk Box .