Market Review: October 23, 2026

Closing Recap

Friday, October 23, 2026

US equity futures extended declines overnight following yesterday’s roll in both the S&P and Nasdaq on ai buildout funding concerns. Both indices then hit fresh five-week lows early in the regular session. The good news, perhaps, is Fed expectations are finding more agreement on no change in October with a hike more likely in December (71% implied probability). The current implied rate now stands at 4.098% for December 2026, and 4.514% for December 2027. Following a couple early rally attempts, stocks were mixed into mid-morning with breadth favoring decliners by 2:1 as small caps underperformed with IWM (-0.57%) versus SPY (-0.27%) and QQQ (+0.46%). SPY breadth favored decliners by 7:2 while QQQ breadth similarly favored decliners by 8:5. Sector performance remained tilted negative, though with some reversal versus yesterday. Energy (+2.26%), Technology (+0.87%) and Real Estate (+0.25%) were early outperformers among S&P sector ETFs, while Consumer Discretionary (-1.31%), Industrials (-1.33%) and Consumer Staples (-1.70%) paced the underperformers with 3 sectors gaining versus 8 declining.

In sentiment today, the daily Fear & Greed Index registered Extreme Fear at 20/100 versus last week’s 22 (also Extreme Fear), and down from last month’s 32 (Fear) reading. By comparison, yesterday’s bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was also lower week/week at -8.9% vs -2.9% last week. Bulls slipped to 36.9% from 38.7% while Bears rose to 45.8% from 41.6%. Interesting, though, that NAAIM’s survey of investment professionals continues to hold up, rising to 87.7, its highest since late September (88.1), from 74.5 the prior week. The reading remains in the middle of its range since May (71.8 to 102.7). The index represents the average exposure to US Equity markets reported by NAAIM members and ranges from −200% (2x short) to +200% (2x long).

Heading into the final hour of trading, the Nasdaq had ridden the rollercoaster down and up but was back to flat while the S&P remained in the red. As has been the case recently, performance was particularly narrow with only Energy, Technology and Real Estate seeing gains and breadth broadly in favor of decliners. Next week we ramp up earnings and get a Fed rate decision, so expect plenty of catalysts and volatility potential. Key items for next week include: FOMC rate decision next Wednesday the 28th (2 day meeting starts Tuesday) – widely expected to hold rates steady, earnings from AMZN, BA, KO, V, GOOGL, MSFT, LLY, SBUX, ABBV, CVX, XOM among many others; also GDP and core PCE inflation data late in the week; ECB and BOJ holding Central bank policy meetings and also in the AI space, Oracle (ORCL) holding its Ai event midweek. For the week, the S&P 500 fell -0.47%, the Nasdaq declined -0.71%, and the Dow climbed 0.41%.

• University of Michigan surveys of consumers 1-year inflation outlook final Oct 4.7% vs prelim 4.7% and final Sept 4.6% and University of Michigan surveys of consumers 5-year inflation outlook final Oct 3.5% vs prelim 3.5% and final Sept 3.4%.
• University of Michigan surveys of consumers sentiment final Oct 48.0 (consensus 46.3) vs preliminary Oct 46.3 and final Sept 48.1; current conditions index final Oct 46.7 vs prelim Oct 44.7 and final Sept 50.9; expectations index final Oct 48.8 vs prelim Oct 47.3 and final Sept 46.3.

• WTI crude futures gained overnight and extended gains into the regular session as concerns grew over escalation with Iran and throughout the Middle East. Comments from Trump did nothing to de-escalate as he said we could end the war in Iran very quickly and take all of the oil but was non-committal on an actual path forward before noting the US would not attack prior to mid-term elections. Also supporting today’s rise was another tanker strike by an unknown projectile in the Strait of Hormuz near Oman. December WTI crude settled +$3.80/bbl, or +3.82%, at $103.27. Brent Crude futures settle at $116.72/bbl, up $3.55, or 3.14% (for the week Brent rose 6.2% and WTI crude 4.3%).
• Treasury prices declined this week as a sharp pullback in Tech stocks led to a rally in safe haven assets. The benchmark 10 year yield rose 3.5 bps today to settle at 4.987%, but was down 11 bps on the week, falling for a third straight week (down 29 bps over that stretch). The 2 year yield fell 5.4 bps on the week to 4.68%, down 4 straight weeks into the FOMC meeting next week, and down 18bps over that stretch.

• Homebuilders: the sector soared on Thursday (DHI, KBH, LEN, TOL, PHM) as a massive pullback in Treasury yields eased mortgage rates, giving a boost to the housing/mortgage industry. Today, NVR was downgraded to Underperform from Buy at Bank America after a disappointing Q326 in which orders and absorption were much weaker than it expected.
• Construction & Materials: FIX reported a strong Q3 with revenue and EBITDA growth exceeding expectations while organic revenue was +46% vs Keybanc’s +33% with a stronger outperformance in Electrical. BTB of 2x was also very strong with Electrical at 2.4x and Mechanical at 1.8x. Margins came in below expectations with Electrical margins ~200 bps lower q/q and Y/y.

• Auto sector: auto supplier ALV shares fell after Q3 adj EPS $2.19 missed the $2.31 consensus estimate while sales were little changed y/y, down to $2.69B vs. est. $2.73B; Q3 adj operating margin slipped to 9.7% versus 10.0% y/y; now sees full year adjusted operating margin expectation to around 10.5%, the low end of our range of around 10.5%-11%; LKQ shares tumbled after withdraws FY26 guidance, citing weak performance in Europe; guides Q3 adj EPS in the range of $0.47-$0.53, below consensus of $0.69 citing Europe underperformance on ERP implementation disruptions in Germany and volume declines in UK and Benelux.

• Power sector: BE reported Q3 revs of $1.24B, ahead of consensus $1.07B, coming with improving GM at 34.5%, and op margin was 23.1% while raised guidance once again, now targeting revenue of $4.4B $4.6B, the raise being 12% at the midpoint, and at $450M, it’s ~2.5x the 3Q beat; Backlog continues to grow faster than revenue, despite 3Q revenue increasing 138% y/y.
• MLPs/Pipeline sector: HESM upgraded from Market Perform to Outperform at Raymond James as argues the Chevron/Bakken contract-reset selloff overstates distribution risk. Reset reduces projected 2027 EBITDA by roughly $400m, yet pro-forma cash flow supports the ~$3.20 expected annual payout, roughly a 10.7% yield at report reference price.

• MRNA sees continued pressure after leaked cancer-vaccine trial details disappointed investors; showed MRNA mRNA cancer vaccine, intismeran autogene, reduced the risk of melanoma recurrence or death by 42% in a Phase 3 trial. After two years, 82% of patients who received the vaccine alongside MRLK’s Keytruda remained cancer-free vs. 70% on Keytruda alone.
• RDY has expanded its portfolio of generic versions of Ozempic with two new brands, according to product photographs and marketing materials reviewed by Reuters, after supply disruptions hit sales of its original Obeda injection in India’s semaglutide market.
• TNGX shares volatile after the chemotherapy-free combination of its experimental drug vopimetostat and RVMD recently approved Rasonque shrank tumors in 82% of patients with advanced pancreatic cancer, early-stage data presented at ESMO show. The Phase 1/2 trial enrolled 22 heavily pretreated patients whose tumors harbor MTAP deletions.
• ZYME enters into an exclusive global license and collaboration agreement with RHHBY for zw209, a trispecific T cell engager targeting dll3. Zymeworks to receive $55M upfront, $40M at phase 1B start, up to $718M in milestones,

• Railroad sector: U.S. railroads continued to benefit from shippers shifting cargo to rail from trucks, with UNP, CSX and NSC all posting higher quarterly revenues and profits this week. Soaring diesel prices and tight trucking capacity have spurred demand for more efficient rail. Intermodal containers and trailers transported by railroads increased 12.6% from a year earlier in the week ended Oct. 17, according to the Association of American Railroads. CSX, UNP and NSC reported volume increases of 5%, 6% and 3%, respectively, in the third quarter. The companies benefited from fuel surcharges, though fuel expenses weighed on margins.
• Airlines, Trucking & Freight sector: MRTN shares fell after earnings miss as costs came in higher than expected from the broad based fuel headwinds felt in the TL industry, along with health Insurance claims and driver wage increases. Higher oil prices had a negative impact on airlines with UAL, AAL, DAL, LUV and others falling today.

• Towers sector: shares of towers AMT, CCI, SBAC were higher after headlines that SPCX seeks access to 80,000 US cell sites for Wireless network, while shares of traditional telco stocks TMUS, VZ, AT) tumbled. Bloomberg reported SpaceX is in talks with CCI to access at least 80,000 US cellular sites as it seeks to build a fourth nationwide wireless carrier. Bernstein said a potential SpaceX mobile network build-out would could create substantial leasing opportunities for tower companies while increasing competition and costs for existing telecom operators.

• Semiconductor stocks are testing their 200-day moving average for the first time in 16 months as concerns over returns on heavy AI spending weigh on technology shares. The iShares Semiconductor ETF (SOXX) fell 6.62% on Thursday, touching its 200-day moving average at $473.39, while the Philadelphia Semiconductor Index (SOX) also declined sharply.
• @bespokeinvest noted on X, “The 3x long semis ETF $SOXL is down 50% since October 5th when the semis made a short-term higher high. -50%.”
• RMBS announced a strategic partnership w/ChipAgents, a start-up focused on developing an autonomous semi design layer/platform across digital, analog, and 3D ICs. RMBS will adopt ChipAgents’ agentic AI platform across its chip design, IP development and verification workflows
• SKHY shares rose after scrapping plans for a US listing of its Solidigm unit after facing strong shareholder opposition and regulatory scrutiny over concerns that the move could undermine minority investor interests.
• In memory/HDD sector, WDC shares fell despite $4.64 adjusted EPS versus $4.11 expected; revenue $4.38B, +55% y/y; next-quarter revenue guide $5.0B–$5.2B, ahead of roughly $4.6B consensus – earnings strength overshadowed by AI-capex rerating and competition concerns.
• Software sector: RNG shares jumped after results as subscription revenue showed solid upside at $6.9M relative to the midpoint, its largest beat of the year, and the full year was raised by $10.5M at the midpoint. Ai ARR was up to 15% of total in a larger sequential jump than the Company had been putting up previously as the product portfolio both broadens and matures.