Apple and Palantir fall before the open as Seoul sinks on AI costs and oil tips up

Apple and Palantir are lower before the open, South Korea's market sank overnight, and oil is higher after a reported U.S. strike on Iran as Americans head to the polls for the U.S. midterm elections.

At 6:46 a.m. ET, Dow futures were down 400 points, or 0.8%, as Apple fell, CNBC reported. S&P 500 futures were down 0.1% while Nasdaq-100 futures were up 0.3%.

On Monday the Nasdaq composite fell 1.1% and the S&P 500 fell 0.5%, while the Dow rose 0.4%.

In overnight trading, South Korea's Kospi finished the day down 3.6%. Chipmakers Samsung Electronics and SK Hynix led the fall, the Chosun Ilbo reported, after plans by companies including Meta and Oracle to raise large sums stoked concern that artificial intelligence spending would become a burden. Taiwan's market fell as well.

According to CNBC, Apple was down 4% before the open after the release of its fiscal fourth-quarter results. The company said September-quarter revenue was $114.5 billion, up 12% from a year earlier, and profit was $2.10 a share, up 14%. It forecast December-quarter revenue growth of 7% to 10%, ahead of the 6.1% analysts expected.

While sales were strong, the company reported a slimmer margin than expected. Apple forecast a gross margin of 45% to 46%, below the 47.9% it just reported and short of the 46.3% average estimate.

Memory costs were higher than in the June quarter, Apple said, while iPad sales missed estimates.

Software provider Palantir was down 7.8% before the open, said CNBC. Revenue topped $2 billion, but growth in the value of its U.S. commercial contracts slowed.

On Monday night, fellow technology firm Oracle priced a $20 billion sale of stock and debt, $10 billion of each. The company is raising the money to finance its artificial intelligence buildout. The shares were priced at $116, 2.6% under Monday's $119.10 close.

Speaking in Hong Kong on Tuesday, Jon Gray, Blackstone's president and chief operating officer, said more of the money will have to come from shareholders, CNBC reported.

"There's going to be more equity needed across this space to keep up with these enormous demands," Gray said.

Emmanuel Roman, chief executive of Pimco, the bond manager, said about $550 billion of AI debt had already been issued this year. He cited an estimate from Bill Ford, chief executive of the investment firm General Atlantic, that AI spending could reach about $10 trillion over five years, CNBC reported.

"At some point in time, it's going to be too much," Roman said.

Americans vote today. A big Democratic win, especially in the Texas governor's race, could add to an AI stock sell-off if limits on data centers, the buildings full of the computers that run AI, gained momentum nationally, according to CNBC. Texas is a key hub of that construction, the report said. Goldman Sachs strategists said a Democratic Congress might limit tax breaks for data centers, but a nationwide pause looks unlikely in any outcome.

The next set of results on the demand for chips in the buildout come from Advanced Micro Devices, which reports later Tuesday.

Oil after the U.S. strike on Iran

At 7:04 a.m. ET, West Texas Intermediate (WTI), the U.S. crude benchmark, was at $98.65 a barrel, up 2.3% from Monday's close. Brent, the international benchmark, was at $106.60, up 1.7%.

WTI fell 7.4% on Monday to $96.46 a barrel, the biggest daily loss since July 27, CNBC reported. President Donald Trump said Iran wants to "make a deal and that could happen." Iran's President Masoud Pezeshkian said Tehran was seeking dialogue, Iran's state news agency reported, according to CNBC.

U.S. officials told The Wall Street Journal the United States hit Iran's Qeshm Island late Monday, after that talk of a deal, and that recent operations have been "limited strikes," CNBC reported Tuesday morning. Reuters reported that some officials described the strike as defensive, meant to keep Iran from attacking commercial ships in the Strait of Hormuz.

On Tuesday, a senior Iranian official told Reuters the two sides remained far from a deal, and that Tehran would not accept Washington's "excessive demands."