Market Review: October 16, 2026

Closing Recap

Friday, October 16, 2026

US equity futures continued yesterday’s trend overnight, with the S&P showing modest gains while the Nasdaq slipped again. Fed rate hike concerns appear to have been absorbed efficiently but ai build-out and revenue growth anxiety have taken over for now sinking technology stocks. On current earnings growth forecasts, the ai trade names are not carrying daunting forward valuations, but investors will have to wait for the next round of earnings to get a new read on the longevity of that growth so some skittishness may persist or even deepen the recent rotation. 

Early gains were short-lived as the S&P quickly went red while the Nasdaq faded further to about -1% within the first half hour of trading. That said, early breadth favored advancers by 11:9 with IWM (-0.12%) versus SPY (-0.06%) and QQQ (-0.90%). SPY breadth favored advancers by 17:6 while QQQ breadth was neutral. Sector-wise, Materials (+1.67%), Utilities (+1.10%) and Financials (+1.03%) were early outperformers while Health Care (+0.02%), Communications (-0.52%) and Technology (-1.16%) paced the underperformers with 9 sectors gaining versus just 2 declining, so some very sector-specific selling.

In sentiment metrics, today’s Fear and Greed Index dipped back to 30 (Fear) from last week’s 35 (Fear) and last month’s 53 (Neutral). This is consistent with yesterday’s bull-bear spread in the American Association of Individual Investors (AAII) weekly survey which slipped to -2.9% vs +1.3% last week. Bulls dropped to 38.7% from 40.3% while Neutrals fell to 19.7% from 20.8% and Bears climbed to 41.6% from 39%.

Heading into the final hour of trading, US equities had extended losses despite 6 of 11 S&P sector ETF’s still being in the green. Consumer Discretionary (-0.84%), Communications (-1.89%) and Technology (-3%) led the underperformers, and the market, lower. Today broke a 55-day streak without a daily decline of more than 1% in the S&P 500. It was the longest streak in more than six years. That said, per @MikeZaccardi, the equal-weighted S&P had its best week vs Tech since 2009. Stock markets closed at their lows of the week with Friday’s sharp decline. For the week, the S&P 500 fell -1.95%, the Nasdaq declined -4.48%, and the Dow climbed 0.67%. Dow records second straight weekly gain for first time since early August while the S&P 500 and Nasdaq record biggest weekly percentage drop since week ended June 26 and biggest daily percentage decline for the Nasdaq since July 23 as the PHLX semi index (SOX) falls for 8th day, matches longest losing streak since 2006.

• Industrial output for September rose +0.7% vs. consensus +0.4% and vs Aug +0.1% as mining output +0.2% (aug +0.5%), Utilities output +3.5% (aug +1.5%). September capacity use rate 76.9% (consensus 76.5%) vs Aug 76.4% (previous 76.3%).

• WTI crude futures eased slightly overnight as headlines indicated Iran had signaled openness to dialogue, but prices bounced back aggressively intraday. By early afternoon WTI futures were up more than 2% after hitting highs above $101/bbl. More ballistic missile and drone intercepts by the Saudi-led coalition and reports of NATO weighing response to Black Sea drone attacks contributed to the gains. December WTI crude settled off its highs at +$2.52/bbl, or +2.61%, at $99.02. Brent Crude futures settle at their highest since May 19 and WTI crude the highest closing level since September 17th
• Benchmark Treasuries finished their best week since mid-February, before the start of the war in Iran. Yields on 10-year Treasury notes dropped 14.6 bps this week to settle at 5.097%, their largest weekly decline since the week through Feb. 13 and down from highs  5.31% just the prior Monday. A tech selloff earlier this week prompted investors to pivot to safer assets, boosting Treasury prices. The 2-year yield fell -5.5 bps this week to 4.734%, now down 3 straight weeks.

• Casino & Gaming sector: Deutsche Bank lowered estimates in Vegas/Macau preview, saying recent operating fundamentals across both Las Vegas and Macau have weakened, driving negative estimate revisions and a meaningful decline in share prices. The average share price decline across MGM, WYNN, and LVS over the last two months has been ~27% (vs. SPX -1%), while our 2026 and 2027 estimates have been revised lower by ~2.5% and ~4.0%, respectively. They continue to prefer the more stable Regional Gaming and Las Vegas Locals markets.

• Tankers & Shippers: INSW has agreed to buy Bruton in a series of transactions that values its smaller peer at about $370 million. International Seaways said the acquisition would add Bruton’s four very large crude carrier, or VLCC, vessels, to its fleet of roughly 70 vessels that provide seaborne transportation services for crude oil and refined petroleum products.
• Transport sector: in intermodal, JBHT posted mixed Q2 as EPS $1.82 missed est. $1.86 while revs grew by 20.4%, 240bps above consensus, driven by 57.0% revenue growth at the ICS Brokerage operations and topped consensus. While revenues topped expectations, so did costs, with increases of 59% in fuel, 32% in purchased transportation, and 46% growth in Insurance/claims.
• Chemical sector: EMN was downgraded to Neutral from Overweight at JP Morgan (tgt to $66 from $82 as thinks commodity values could soon cease to work in favor of Eastman as the price of propane is now $1.07/gal up from $0.74/gal at the end of August and the spot price of polymer grade propylene has moved lower from $0.41/gal to $0.39/gal and says the narrowing of spreads could lower annual EBITDA by about ($90M).
• Nuclear/Utility sector: NI signed a new long term energy agreement with MSFT for its previously announced northwest Indiana campus; deal increases total expected NIPSCO electric customer savings to approximately $1.75B. broader Utility space (XLU) was stronger after Treasury yields held the prior day pullback.

• Brokers & Exchanges: IBKR Q3 adj EPS $0.67 vs est $0.68 on NII $1.154B vs est $1.128B and revs $1.914B vs est $1.888B; raises dividend to $0.15; Q3 Net interest income +19% y/y to $1.15B, primarily on higher average customer margin loans and credit balances; Q3 customer accounts grew 35% y/y to 5,576,000, while customer margin loans jumped 36% to $105.2B.

• Crypto sector: MSTR shares fell after MSCI said the bitcoin buyer could be removed from its global indexes under new rules. MSCI said that non-operating companies will be ineligible for its Global Investable Market Indexes from the close of Nov 30. CRCL is entering 40 emerging and developing countries as blockchain adoption is set to scale significantly, Reuters reports.

• Financial Services: Oppenheimer downgraded EFX to Perform from Outperform in Q3 credit serviced preview reflecting weakening mortgage fundamentals, potential elimination of the tri-merge requirement, which its analysis suggests could reduce EPS by mid-single digits and limited incremental upside from Government

• MDXH preliminary Q3 revenue $22.7M, below consensus $24.55M saying experienced unexpected turnover within our sales force catalyzed by aggressive targeting from recruiters; suspends FY26 revenue guidance of $110M-$115M.
• OMER shares fell after the company announced that the European Medicines Agency’s CHMP issued a negative opinion on its marketing authorization application for narsoplimab in TA-TMA, following re-examination of its original negative opinion from June.
• RHHBY said it received approval from the U.S. FDA to market its Enspryng drug as a treatment for rare autoimmune condition thyroid eye disease in adults; said this marks the second indication in the U.S. for Enspryng, which was already authorized in 2020 for autoimmune disease neuromyelitis optica spectrum disorder.

• AI Data Centers/Neocloud sector: CRWV shares and bonds were set for steep weekly losses on Friday, highlighting investor worries over the cloud-computing company’s $50 billion debt load that has rippled across the AI industry. Recent CPI/PPI inflation data boosted bets on interest-rate hikes, raising the chances of higher payout on borrowings by data center/AI infrastructure firms with huge debt. Shares track to fall over 15% this week.
• Anthropic’s anticipated $2T valuation ahead of a planned November IPO is facing investor resistance, with some reportedly considering a valuation closer to $1.5T, Reuters reported. The reassessment follows the company’s latest financial disclosures, as some investors question whether revenue growth can justify the cost of AI development. Anthropic reported Q3 revenue of $16.8B, up 45% from the prior quarter, slower than its more than doubling of revenue in Q1-Q2.
• Media sector: NFLX shares fell as M Science cuts Q3 subscriber add estimates to 3.80 million from 5.10 million, below the 4.10 million consensus; NFLX also named former Disney executive Peter Rice as chief content officer, replacing 10-year veteran Bela Bajaria
• Software sector: VRNS to be acquired by Proofpoint in a $6.3B transaction as shareholders to receive $49.75 per share in cash; until deal closes, Proofpoint & Varonis will continue to operate as separate and Independent companies. WDAY was downgraded to hold from buy at KeyBanc, with analysts expecting a longer timeline before the adoption of Ai products takes hold