Market Review: October 21, 2026

Closing Recap

Wednesday, October 21, 2026

U.S. stock markets put in a solid day, as investors rotated back into Technology (XLK +1.68%) and Industrials (XLI +0.91%) while more defensive sectors that have led in recent weeks such as Healthcare (XLV), Consumer Staples (XLP) and Utilities (XLU) lagged on the day as Wall Street awaits key earnings after the bell from Tesla (TSLA) and Meta (META) in the AI space. In addition to those two, IBM, LRCX and TXN are also expected to report in the tech space tonight. Shares of SpaceX (SPCX) advanced today along with AI server company SMCI after positive results and guidance, helping revive the Ai trade for today at least, but commentary/spending/results from META tonight can quickly change things. Investors are also focused on the Fed’s October 27-28 policy meeting and next week’s US Personal Consumption Expenditures (PCE) report for clues on future rate moves. The Fed remains in their “blackout” period ahead of next week’s decisions, and economic data has been quiet this week after last weeks hotter inflation readings. Major U.S. averages did pull back in the final hour of trading, paring gains as oil stocks jumped and yields edged higher. One of the quieter yet very impactful stories of the day was that Major websites in US and Europe go dark as operators race to protect systems from hackers. The vulnerabilities, dubbed “PHP2Shell,” affect PHP, an open-source programming language that works behind the scenes to run websites, including those built on WordPress, Drupal and Joomla. Nearly 70% of websites use PHP, according to cybersecurity firm Cloudflare. PHP developers released emergency security patches Wednesday, warning that temporary safeguards cannot fully protect vulnerable systems.

• Cryptocurrencies rebounded nicely today as Bitcoin rose over 2% nearing $85,000 midday, while Ethereum prices climbed over 2.5% topping $2,500 after being under pressure in recent trading sessions. Bitcoin looks to be taking some of its cues from the stock market. It’s not a new sentiment, but one that’s seeing a resurgence after bitcoin briefly started to move higher despite weakness in AI stocks last month.
• U.S. Treasury yields edged higher as investors await more economic data before the Federal Reserve’s October interest rate meeting next week. The U.S. 2-year yield, which is sensitive to short-term interest rates, hovers around 4.823%, up 3.8bps today. The U.S. 10-year yield rose 3 bps to 5.145%. The Treasury auctioned off $13 billion in reopened 20-year bonds this afternoon. Yields have been sensitive to movements in the equity markets in recent days, as concerns about the impact of higher borrowing costs on AI infrastructure stocks such as CoreWeave have weighed on stocks and increased the safe-haven appeal of Treasuries, sending yields lower.

• Restaurant sector: CMG was downgraded from Buy to Hold at TD Cowen and cut tthat32 from $44 as worries Oct. sales are shaping up to miss the Q4 inflection point that it had previously expected over an easy monthly compare.
• Auto sector: in tires, Michelin (MGDDY) shares fell overseas after reported a drop in Q3 sales volumes, falling -0.6% on year versus a company-compiled consensus looking for 0.6% growth.

• Waste sector: UBS upgraded shares of CLH from Neutral to Buy (tgt to $375 from $325) driven by potential earnings upside from capital deployment and improvement in fundamentals. The firm also downgraded CWST from Buy to Neutral (tgt to $95 from $122), reflecting a reduction in its earnings outlook driven by lower assumed M&A activity. UBS now expects management to focus on smaller acquisitions, reducing its cumulative 2026-30E EBITDA/share forecast by 7%.
• Chemical sector: IPAR announced 3Q sales results of $430M (flat) vs. consensus $423.8.0M noting they estimate the Middle East conflict to have represented a 1 point headwind to sales this quarter; total sales were flat y/y at $430M, with growth driven by a +4% increase in European-based operations, which helped offset a -7% decline in U.S.-based operations.
• Space sector: SPCX reported $14.6B in revenue for Q3, (+161% YoY) vs. est. $12.72B and $4.4B in net income, buoyed by a surge in its AI business and steady growth at its Starlink satellite-internet unit. Connectivity and Super Intelligence (SI) revenues jumped 69% and 830% y/y, respectively.
• Elon Musk says a merger of his two companies, SPCX, would be "a good idea" and that they formed special committees to discuss a union. U.S. listed space-linked stocks rally premarket after SpaceX reports first quarterly profit as publicly traded company with names like FLY, RKLB, LUNR, PL and SATS all seeing volatility.
• US crude and gasoline stocks fell last week, while distillate inventories rose, the US Energy Information Administration (EIA) said. Crude inventories fell by 3.06 million barrels to 412.5 million barrels in the week vs analysts’ expectations for a 820,000-barrel draw. Crude stocks at the Cushing, Oklahoma, delivery hub rose 987,000 barrels in the week, the EIA said.
• U.S. gasoline stocks fell by 2.95 million barrels in the week to 205.3 million barrels, the EIA said, compared with analysts’ expectations for a 443,000-barrel draw.​ Distillate stockpiles, which include diesel and heating oil, rose 1.68 million barrels in the week to 104.3 million barrels, versus expectations for a 1.16 million-barrel drop, the EIA data showed.

• Consumer Finance; COF reported PPNR beat and materially better than-expected; Domestic Card’s NCO rate was 3.98% (below consensus), and the company released $225mn of reserves, including a $250 million release in Domestic Card. In research, ALLY was downgraded to In Line from Outperform at Evercore after results and downgraded SYF to In Line from Outperform with a price target of $78, down from $80 as expects potential earnings headwinds and macro volatility to limit incremental upside catalysts to the shares and argues that the valuation seems fair.
• Insurance sector: CB reported operating EPS of $7.66, beating consensus of $6.79, helped by better-than-projected favorable prior period reserve development ($511 mln vs. $138 mln est.; driven by North America Personal P&C and Overseas General) and a slightly stronger underlying P&C combined ratio (83% vs. 84% est.), partially offset by higher-than-expected catastrophe losses ($705 mln vs. $390 mln est.), while NII ($1,791 mln) was broadly in line.

• ROIV announced positive results from phase 3 trials evaluating a treatment for non-infectious uveitis; said brepocitinib met the primary endpoint for two phase 3 trials, with a once-daily 45 mg dose showing a statistically significant benefit in time to treatment failure vs. a placebo.
• Managed care sector: ELV raised its annual profit forecast after posting better-than-expected quarterly results due to higher premiums and lower medical costs, as sees its annual profit forecast to be at least $29 per share, vs. prior of at least $27 per share; Q3 medical loss ratio was 90.6% vs. est 91.17%; raises FY26 operating cash flow view to ‘at least $6.5B’ from prior view ‘at least $6B.
• Life Science & Tools sector: TMO Q3 slightly ahead of consensus, with Q3 organic revenue growth above expectations (+6% vs +4.3% consensus). Products and services revenue came in above estimates while life sci was slightly below; DHR shares fall after Q3 revs rose 9% y/y to $6.55B, just below the $6.56B overall consensus as its diagnostic and life sciences segments ($2.88B and $1.87B in revs respectively) failed to offset weakness in its biotech segment ($1.8B vs. est. $1.87B); sees Q4 adj core revenue ex: respiratory revenue to increase in the 4% to 5% range y/y vs Q3 growth of 5.5% (shares of other comps were volatile including AVTR, A, WAT, ILMN, MTD).
• Medical Equipment & Devices: ISRG shares tumble after mixed results as posted +14% worldwide da Vinci procedure growth modestly bettering consensus of +13.4% and system installations coming in considerably ahead (546 vs the Street’s 476) but U.S. procedures disappoint, where +10% growth once again fell short of buy-side consensus of ~+12%. COR to acquire American Oncology network to strengthen support of community Oncology in a deal that values Aon at $2.40B enterprise value including up to $100M CVRS.

• META reports after the close. Meta plans to introduce new nonvoting stock to fund its AI investments without diluting CEO Zuckerberg’s control, reports Semafor citing sources
• SMCI shares jumped after guides Q1 revs at $18.5B-$19.50B vs. guidance of $14.5B-$15.50B primarily due to increased demand for AI platforms and sees Q1 gross margins estimated at 12.0%-12.5% versus guidance of 10.4%-10.8% (DELL, HPE rise in sympathy).
• Anthropic posted a staggering -$80.7B net loss in the first half of 2026, up from -$13B a year earlier and nearly double its full-year 2025 loss of -$42B. -$72B of the loss stems from non-cash accounting adjustments reflecting changes in the value of convertible notes and other financing instruments, leaving an estimated -$8.7B loss after these charges are excluded. At the same time, revenue surged to $16.3B from just $1.1B a year earlier, but computing and infrastructure spending nearly quadrupled to $9B, exceeding the $7.3B spent throughout 2025.
• NVDA & AMKR are planning to expand advanced packaging capacity by over 300% by 2028 while Nvidia’s other partners target 15x more optical-engine capacity. Nvidia is also putting $1.1B upfront to secure additional chip testing capacity as Jensen Huang says, "demand is extraordinary."
• MBLY was downgraded to Underperform at RBC Capital citing two structural concerns: Base ADAS displacement risk as OEM architectures shift toward centralized compute, and near-total premium product dependence on Volkswagen, a customer it thinks could actively move away from MBLY.
• MU’s Taiwan unit and a union representing workers at its Taichung operations have reached a labor agreement, prompting both sides to withdraw from mediation scheduled for Oct. 22. The agreement covers multiple issues, but its terms were not disclosed.
• Neocloud/Data center sector: Truist said compute commentary from SPCX Q3 is supportive of continued pricing power and shorter payback periods for Ai Cloud providers (CRWV, NBIS). Despite market concerns relating to financing for Ai Cloud providers this past week, Truist believes SPCX’s Q3 represents the first data point during the earnings season to support the bull case for Ai Cloud providers. IREN announced that it has established IREN Europe and secured the civil works license for its planned AI data center in Badajoz, Extremadura, Spain. The project is planned to deliver approximately 300MW of capacity, with initial operations targeted for 2028. APLD was reinstated with a Buy rating and $35 PT at Roth on asymmetric upside from secured equipment, a repeatable AI factory design, and improving market lease economics.

• DOCN was upgraded to Overweight from Neutral at Piper (cuts tgt to $126 from $142) saying the recent share-price pullback creates an attractive entry point given accelerating AI-driven growth, AI-startup exposure and potential upside to LT revs.
• PEGA shares fell after announced disappointing Q3 results, with EPS of $0.35 (consensus $0.47) on revenue of $393M (consensus $422M), a growth of 3% Y/y (consensus 11%) as cloud revenue of 219M (consensus $230M) was a 19% Y/y increase (consensus 25%); the company said continues to see GTM challenges, with management commenting that new Acv growth through the first three quarters of 2026 “did not reflect the opportunity they see in the market.
• ZM was upgraded to Outperform at Oppenheimer with $130 tgt after they attended the Zoomtopia conference in the last two days and were impressed by the company’s range of new services, as were its customers. OPCO gains confidence in its transition from video meetings to a broader Ai communications and workflow platform.

• Telecom sector: AT&T Corp. (T) shares fell as Q3 adj EPS $0.65 topped est. $0.60 as revs rose 5.3% y/y to $32.3B vs. consensus $31.65; added 379,000 net monthly bill-paying wireless subscribers during Q3, vs. the 383K consensus; now expects annual adj EPS of about $2.40, compared with its prior forecast of $2.25-$2.35; said 442,000 new fiber internet users and 327,000 new fixed wireless subscribers added in the third quarter; said fiber ARPU fell 4% in Q3 due to introductory pricing, discounts for bundled Wireless and Broadband customers.