MARKET OPEN
Good morning, it’s Friday, October 23, 2026. Wall Street just asked AI who’s paying the bill.
The Nasdaq dropped 2.60% and the S&P 500 lost 1.21% Thursday, while the Dow and Russell 2000 managed modest gains.
Meta’s spending plans lit the fuse. Brent crude then touched $114.72 overnight, its highest level since May 4, after Houthi attacks in Saudi Arabia.
The setup: Tech is trying to stabilize this morning. But with oil above $110 and the Fed meeting next week, the money that left AI yesterday is going somewhere. Today we follow it.
➤ What Happens After Election Day Could Matter More →
(from Stansberry Research)
FUTURES SNAPSHOT
S&P 500 | 7,682.50 | -0.29% |
Nasdaq | 29,106.00 | -0.14% |
Dow Jones | 52,733.00 | -0.63% |
Bitcoin | $81,688.20 | +0.42% |
Ethereum | $2,398.83 | +0.67% |
Gold | $4,038.50 | -0.54% |
Oil (Brent) | $114.23 | +0.94% |
VIX | 19.68 | +3.42% |
Futures are mixed after Thursday’s tech selloff, with Brent near $113.90 and WTI above $100.
What’s moving the market: AI financing fears, Middle East oil risk, and a sharp bond rally. Yesterday’s ten-year move was the biggest Treasury rally in more than two years.
TODAY’S CATALYSTS
Before open — American Express, SLB, Autoliv, Booz Allen earnings
9:45 AM — S&P Global Flash PMIs (Oct)
10:00 AM — UMich Consumer Sentiment & Inflation Expectations
Most important: The 10:00 inflation expectations read. Forecasts call for one-year expectations of 4.7%, which the Fed sees as its soft spot. A hotter number revives rate-hike talk ahead of next week’s meeting.
In partnership with Stansberry Research
A New Kind of Civil War is Coming After Election Day?
Across America, there's been violence, protests, lawsuits, cancelled projects, and campaigns to impose statewide moratoria to stop AI's impact on cities and small towns across the nation.
And Whitney Tilson believes these frustrations are only going to get worse. In fact, at midnight on November 4th, the day after our upcoming midterm elections, he believes it's all going to come to a head.
And it will have huge implications on your portfolio.
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THE BIG STORY
Meta Just Showed You the Price of AI
Meta posted Q3 revenue of $64.60 billion, up 26%. It also narrowed its 2026 capex outlook to $135–145 billion and reported negative free cash flow of $2.12 billion. The company also announced new non-voting shares to help fund its AI expansion. The stock fell nearly 7%.
The damage spread. Nvidia fell 4.4%, AMD dropped 8.1% and CoreWeave sank 10%. Lam Research added pressure by citing supply chain constraints on near-term shipments.
Here’s the tell: Tesla moved the other way, cutting its 2026 capex forecast to about $20B from over $25B.
What this means for investors: The market isn’t questioning AI’s potential. It’s questioning the cash. Companies that can fund AI from free cash flow will be treated very differently from those that need to raise capital to keep up.
BREAKING NEWS
Oil Crosses into Danger Territory
Saudi Aramco ordered the evacuation of its Dhahran headquarters Thursday as fighting with the Houthis intensified. The State Department also ordered non-emergency government employees to leave Saudi Arabia.
Oil is up on top of it. ING analysts called re-escalation the most likely path, saying the risk premium is likely to stay embedded in prices.
You can already see it in earnings. American Airlines expects Q4 fuel near $4.70 per gallon, almost double last year’s price. Meanwhile, Valero posted its highest-ever quarterly profit.
In partnership with Stansberry Research
FCC Rule Change Could Fast-Track New Elon Device
New FCC Rule Change Could Make It Easier to Launch Elon's Next Big Project.
PORTFOLIO INSIGHTS
If the 10-year stays below 5% → Homebuilders, REITs and dividend payers rallied Thursday as yields tumbled. Income investors may want to lock in today’s yields before they slip further.
If Brent holds above $110 → Refiners benefit; airlines and consumer discretionary feel the squeeze.
If AI spending keeps rising without matching cash flow → Expect continued pressure on chips and AI infrastructure names.
TODAY’S BIG IDEA
Defense Stocks
The opportunity: Defense contractors with record order books.
Why now: Lockheed’s backlog jumped 27% sequentially to a record $292 billion, following strong numbers from Northrop and RTX earlier this week.
Bull case: Multi-year contracts give revenue visibility that AI names can’t offer right now.
Risk: Budget politics around the midterms, and valuations already reflect some good news.
Watch: Whether defense keeps outperforming if Middle East tensions cool.
RISK RADAR
The Next Fed Move Could Be Up
Most investors still think in terms of rate cuts. The market doesn’t. Traders are now fully pricing a quarter-point hike by January, even after yesterday’s bond rally.
The odds of a hike at next week’s meeting have fallen to about 10.5%. But with oil above $100, that number can move fast.
Watch: Today’s inflation expectations and Wednesday’s Fed decision.
THE WATCHLIST
META -7.0% — Capex and new share class spooked investors. Bill Ackman defended the stock as undervalued. Watch whether buyers step in.
WDC -7.9% AH — Adjusted EPS of $4.64 crushed the $4.09 estimate, and it still fell. A clear sign of AI selling regardless of results.
AXP — Reports before the open. Analysts expect $4.50 EPS on $20.12B revenue. A clean read on affluent consumer spending.
FOLLOW THE MONEY
Investors are pulling money from individual stocks at a record pace. BofA clients pulled a net $14.8 billion from single stocks, the largest outflow in the firm’s data, while buying $2.8 billion of equity ETFs.
At the same time, Goldman says hedge fund short leverage has climbed to the 99th percentile of the past five years.
That matters because crowded short bets can fuel sharp rebounds on any good news.
CHART OF THE DAY
Thursday's Great Divide: AI Sold, Everything Else Held
Category | Thursday % change |
|---|---|
Semis (SOX) | -6.7 |
Tech (XLK) | -3.3 |
Nasdaq | -2.6 |
S&P 500 | -1.21 |
Dow Jones | 0.02 |
Russell 2000 | 0.11 |
Staples (XLP) | 3.0 |
Thursday wasn’t a market crash. It was a rotation. Semis plunged while six of eleven S&P sectors rose, led by Consumer Staples up over 3%.
The SOX is now down more than 26% from its June record, yet still up 52.2% this year.
🔔 OPENING BELL HOT TAKES
Western Digital, Bloom Energy and Deckers all fell after hours, two of them despite beating estimates. CNBC
Meta’s EPS would have been $7.40 without a $9.9 billion charge tied to an $18.6 billion settlement with 52 attorneys general. Kiplinger
Moderna fell over 20% after an alleged leak of Phase 3 melanoma vaccine data developed with Merck. Yahoo Finance
Elon Musk reportedly invested about $1 billion in Skydance. CNBC
Treasuries had their best day in over a year, with the 10-year back below 5% for the first time in a month. Market Index
THE BOTTOM LINE
The AI trade isn’t broken, but investors now want to see cash, not just spending. Oil above $110 and a Fed that may hike are the bigger risks for retirement portfolios right now.
Stay balanced, favor companies that fund growth themselves, and let volatility hand you better entry points.
P.S. Just last week, the FCC granted a key approval for Elon. That means another piece of this story just fell into place.
It's all developing very fast, and you're going to hear more and more about it in the coming weeks. Learn where to move your money here.