The S&P 500 Index ($SPX) (SPY) is down -1.15%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.19%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -2.19%. December E-mini S&P futures (ESZ26) are down -1.36%, and December E-mini Nasdaq futures (NQZ26) are down -2.47%.
A heavy bout of risk-off selling has pushed both tech stocks and the broad market lower. Investors have resumed dumping chip and AI-related stocks, and the broad market has fallen as they reduce stock exposure and cover losses. Both gold and crypto are also trading lower as investors lick their wounds and raise cash. Bonds have benefited, with the 10-year T-note yield down by a hefty -11 bp.
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Tech stocks led the charge lower on fresh unwinding of chip and AI-related stocks. Meta (META) fell by more than -5% even after CEO Zuckerberg said the company’s AI investment is starting to pay off. Tesla (TSLA) is fractionally lower after trimming its capex plans. Lam Research fell more than -9% after the chip company delivered disappointing guidance.
Stocks are also being undercut by a rally of more than +2% in WTI oil prices after the US State Department yesterday afternoon said it was evacuating non-essential personnel and families from Saudi Arabia, leading to speculation about whether the US might be planning new military attacks on Iran and/or the Houthi militia in Yemen. Also, there were several attacks in the past two days by the Houthi militia on targets in Saudi Arabia, including an oil field, a port, and an airport in Dammam.
Stocks are supported by the prospect of solid quarterly earnings. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +25% from a year earlier, up from a July estimate of 22%. As of Tuesday, 60 of the S&P 500 companies have reported results, with 83% beating estimates.
Markets are discounting a 9% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets are lower today. The Euro Stoxx 50 is down -1.8%. China's Shanghai Composite closed down -1.48%. Japan's Nikkei-225 Stock Average closed sharply lower by -2.65%.
Interest Rates
December 10-year T-notes (ZNZ6) are up +28 ticks. The 10-year T-note yield is down -11.2 bp to 5.007%. T-note prices are seeing safe-haven demand tied to the sharp sell-off in stocks and increased tensions in Saudi Arabia as the US State Department evacuates non-essential personnel. Also on the bullish side, the 10-year breakeven inflation expectations rate is down -3.7 bp to 2.331%.
European government bond yields are lower. The 10-year German bund yield is down -7.9 bp to 3.342%. The 10-year UK gilt yield is down -4.6 bp to 5.332%.
Markets are discounting a 3% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
The Magnificent Seven are all trading lower today except for Apple (AAPL), which is marginally higher. Aside from the sharp sell-off in Meta, Amazon (AMZN) and Nvidia (NVDA) are down more than -3%. Alphabet (GOOGL) is down more than -2%.
Meta (META) is down by more than -5% after the company, in its earnings report yesterday afternoon, raised its target to $825 billion from $700 billion of future spending commitments, mostly related to computing power and AI-related infrastructure. The higher spending plans were positive for companies that deliver those services but raised questions about whether Meta will achieve a sufficient return for investors on that massive investment level. The company also announced a new class of nonvoting stock that could be used to raise more capital, although that could dilute earnings per share for current investors. Revenue and earnings were better-than-expected, with Q3 revenue rising +26% to $64.6 billion and earnings of $3.83 a share beating the $3.57 consensus.
Tesla (TSLA) is down -0.5% after Wednesday afternoon’s mixed earnings report and concerns about the company’s lagging capex investment. Q3 revenue of $28.05 billion was down -0.2% y/y and was slightly below the consensus of $28.13 billion. Q3 adjusted EPS of 48 cents/share was better than the consensus of 44 cents. Tesla’s self-driving subscriptions rose +67% y/y to 1.74 million, above expectations of 157 million. Tesla’s main bullish driver this week was Elon Musk’s attempt to force a merger of SpaceX and Tesla, folding Tesla's mixed prospects into the bigger SpaceX rocket-and-AI theme.
LAM Research (LRCX) is down more than -9% after its guidance for adjusted fiscal Q2 earnings was slightly weaker than expected. The negative Lam news helped lead to a broad sell-off in chip stocks, with KLA (KLAC) down more than -8%. GlobalFoundries (GFS), Marvell Technology (MRVL), and AMD (AMD) are down more than -7%.
Crypto stocks are trading lower today with Bitcoin’s sell-off of more than -3%. Iren Limited (IREN) is down more than -9%, and Galaxy Digital (GLXY) and Riot Platforms (RIOT) are down more than -8%.
IBM (IBM) is down -0.8% on doubts about its growth sustainability, even though the company’s IT services results improved.
Procter & Gamble (PG) is up more than +6% on above-consensus sales and earnings and relief that the company’s limited price hikes didn’t put a bigger dent in earnings.
Spotify Technology (SPOT) is up more than +8% after earnings and guidance suggested improving profit margin trends.
Las Vegas Sands (LVS) is down more than -1% on disappointing earnings.
Earnings Reports (10/22/2026)
MSC Industrial Direct Co Inc (MSM), PulteGroup Inc (PHM), Comcast Corp (CMCSA), Valero Energy Corp (VLO), Lazard Inc (LAZ), Carpenter Technology Corp (CRS), Lockheed Martin Corp (LMT), Popular Inc (BPOP), Roper Technologies Inc (ROP), Huntington Bancshares Inc/OH (HBAN), Spotify Technology SA (SPOT), Honeywell International Inc (HON), PG&E Corp (PCG), Blackstone Inc (BX), Quest Diagnostics Inc (DGX), Norfolk Southern Corp (NSC), Tractor Supply Co (TSCO), Old Republic International Cor (ORI), Snap-on Inc (SNA), Pool Corp (POOL), Allegion plc (ALLE), Dow Inc (DOW), American Airlines Group Inc (AAL), TTM Technologies Inc (TTMI), Procter & Gamble Co/The (PG), CBRE Group Inc (CBRE), NVR Inc (NVR), Viking Therapeutics Inc (VKTX), Nasdaq Inc (NDAQ), Dover Corp (DOV), Ryder System Inc (R), Union Pacific Corp (UNP), Boyd Gaming Corp (BYD), VeriSign Inc (VRSN), Robert Half Inc (RHI), Kinsale Capital Group Inc (KNSL), Newmont Corp (NEM), Kilroy Realty Corp (KRC), Columbia Banking System Inc (COLB), Rexford Industrial Realty Inc (REXR), Deckers Outdoor Corp (DECK), SS&C Technologies Holdings Inc (SSNC), SLM Corp (SLM), Western Digital Corp (WDC), RingCentral Inc (RNG),
Appfolio Inc (APPF), Bloom Energy Corp (BE), Omnicom Group Inc (OMC), Comfort Systems USA Inc (FIX).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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