Mid-Morning Look: October 23, 2026

Mid-Morning Look

Friday, October 23, 2026

U.S. stocks opened lower as caution returned after a sharp pullback in AI-linked names, with telecom shares also under pressure on competition fears. Wall Street’s main indexes faced selling after Thursday’s slide—Nasdaq was down about 2.6%, the S&P 500 off 1.2%, and the Philadelphia Semiconductor Index (SOX) falling 6.7%—driven by renewed worries over AI financing costs, heavy capital spending, and questions around near-term monetization. AI shares have swung sharply this month. They came under pressure earlier amid CoreWeave’s debt burden and the rising cost of funding large infrastructure buildouts, then rallied midweek on upbeat results from SpaceX and Super Micro before reversing. Shares of tech were weaker early, but some segments of the AI space seeing a small bounce early.

The sell-off accelerated Thursday after Meta dropped nearly 8% on its first cash outflow in more than a decade and broader concerns over AI-related expenditures. Rising interest rates and intense capital demand have pushed financing costs higher, weighing on bond prices and equity valuations for some AI infrastructure players and raising doubts about future earnings.

Telecom stocks tumbled as well, with AT&T, Verizon, and T-Mobile falling after reports that SpaceX is in talks with cellular infrastructure companies about launching a nationwide wireless carrier. Cell-tower operators moved in the opposite direction—Crown Castle rose more than 10% and American Tower about 7%—while SpaceX shares gained roughly 2%. Under the surface, the recent action has looked less like a broad risk-off move and more like a rotation out of mega caps into other areas, leaving the S&P largely treading water amid the churn.

Macro factors added to the cautious tone. Brent crude traded above $114 a barrel—the highest since May—on escalating Middle East supply risks and reports of possible fresh military action involving Iran. Treasury yields held just under 5%, even as oil and inflation concerns lingered; part of the yield moderation has been linked to tightening financial conditions in the AI sector. U.S. growth has remained resilient, with Q3 on track to annualize in the 3% range, and AI-related investment continues to account for a large share of that expansion. Investors are also watching upcoming earnings and the Federal Reserve’s policy meeting next week for further direction.

• 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.

• Oil Services & Equipment: as oil prices hit fresh 15 month highs, with Brent around $115 per barrel, oil stocks are leading in the S&P with notable gains for COP, CVX, EOG, HAL, OXY, XOM; also, SLB Q3 adj EPS $0.64 vs. est. $0.62 and Q4 revs rose 6% Y/y to $9.44B vs. est. $9.28B; Q3 N.A. revs $2.4B; Data Center Solutions revenue jumped 76% y/y to $230M; see a very compelling outlook for 2027, with further upside as Middle East activity recovers.
• Auto Suppliers sector: ALV and GTNX fall after Q3 misses, with Autoliv narrowing its FY adjusted operating margin guidance to the low end of its 10.5%-11% range on tariff, raw material and logistics headwinds; LKQ plunges after withdrawing FY26 guidance and naming Salvatore Abbate as new CEO, citing European ERP disruption and UK/Benelux volume declines.
• 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.

• CCI +12%; shares of towers AMT, CCI, SBAC were higher after reports that SPCX seeks access to 80,000 US cell sites for Wireless network, while shares of traditional telco stocks TMUS, VZ, AT) tumbled amid fears of increasing competition and costs for existing telecom operators
• RHI +11%; after earnings as Q3 EPS $0.49 vs. est. $0.47; Q3 revs $1.36B, in-line with consensus $1.36B though guides Q4 EPS $0.36-$0.46 below consensus $0.47 and revs $1.285B-$1.385B vs. consensus $1.36B.
• RNG +8%; 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.
• SKHY +3%; after nixed plans for a U.S. listing of its Solidigm flash memory and storage business; news seen as possible positive because the market may have struggled to absorb this new supply. The South Korean memory giant faced pushback from shareholders.
• SLB +2%; Q3 adj EPS $0.64 vs. est. $0.62 and Q4 revs rose 6% Y/y to $9.44B vs. est. $9.28B; Q3 N.A. revs $2.4B; Data Center Solutions revenue jumped 76% y/y to $230M; see a very compelling outlook for 2027, with further upside as Middle East activity recovers.

• ALV -6%; 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; narrowed its full-year profitability guidance.
• BE -11%; more concerns in the power/AI/infrastructure sector, falling despite 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.
• DECK -3%; Piper downgraded to Underweight citing a rare Q2 sales miss while Decker’s lowered sales guide at both brands and EPS for the year; as athletic marketplace dynamics aren’t expected to meaningfully improve until next Summer/Fall.
• LKQ 18%; 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. Also appointed ex-Veritiv CEO Salvatore Abbate as CEO, effective December 15, 2026.
• MRNA -2%; 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. The sell-off could be partially due to concerns that SOC will instead favor neoadjuvant Keytruda therapy plus profit taking.
• MRTN -6%; 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.
• NCLH -4%; was downgraded to Underweight at JPMorgan and cut tgt to $11 ahead of earnings as sees an inline quarter but downside risk to second half of 2027 net yield estimates. The potential for prolonged geopolitical headwinds could constrain demand recapture in Europe.
• TNGX -16%; 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
• WDC -2%; despite the hard-drive maker reporting adjusted earnings per share of $4.64 versus $4.10 expected, and guiding quarterly revenue and earnings solidly above the Street. Management said it has “good visibility” with its top seven customers out to 2030 and 2031.