Calendar › Morning Rundown › 2026-10-22

AI spend doubts hit NQ. Saudi strike lifts Brent 2.7%

Rundown · 2026-10-22

Wednesday's tech rally has been fully reversed overnight. Meta's capex, Tesla's caution on robotics and chips, and IBM's warning that customers are questioning the return on AI spending all landed after Wednesday's close. NQ is −1.55% against Wednesday's settle and has not traded above it all night. It sits in the lower quarter of a 1.92% overnight range. ES is −0.93%, YM −0.60% and RTY −0.74%, so NQ is falling about 2.6 times as hard as YM. Quotes are as of 06:32 ET. Asia led the selling: Kospi −3.52%, Hang Seng −3.03% and Nikkei −2.65%. Oil is the second story. A Houthi drone strike near Saudi Aramco's Shaybah field and a deadly attack on a Saudi oil site have Brent +2.73% and December WTI +2.18%, both near the top of their overnight ranges. Gold is −1.04% even though the 10-year is about 6bp lower overnight and the dollar is softer. The yen is the strongest major, with USD/JPY −0.81%. Jobless claims at 08:30 are the only print before 10:00. Intel reports after the close.

Overnight

• Against Wednesday's settles, 06:32 ET. ES −0.93% · NQ −1.55% · YM −0.60% · RTY −0.74%. On Wednesday the Nasdaq-100 beat the Dow by about 0.4 points of %. This morning NQ trails YM by about a full point. That is the third session in a row where the lead between the two has flipped.
• Ranges as reference, not as a forecast. ES has ranged 1.13% and sits in the lower fifth. Its high is 0.02% below the settle, so ES has not traded above Wednesday's close. NQ has ranged 1.92% and sits in the lower quarter, with its high 0.05% below the settle and its low 1.97% below. YM has ranged 0.83% and sits in the lower quarter. It is the only one of the four that traded above its settle, by 0.05%, at the open. RTY has ranged 0.97% and sits in the lower third. All four opened at or near their highs and have sold off since.
• Asia sold the AI names. Kospi −3.52%, with SK hynix down more than 5% (TradingKey, as reported). That more than reverses Wednesday's 3.29% gain. Nikkei −2.65%, its lowest close since mid-September. Hang Seng −3.03%, Shanghai −1.48%, ASX 200 −0.43%. The Bank of Korea held at 3.00% in a unanimous vote, after hikes in July and August. Local coverage called it a hawkish hold.
• Europe is lower on oil and tech. DAX −1.12%, CAC 40 −1.51%, STOXX 600 −1.04%, FTSE 100 −0.56%. Reuters tied the drop to the oil jump, with the European tech index down about 2%. The FTSE is holding up best because of its energy weight.
• What broke while the US was closed. Three earnings reports and one attack. Meta beat on revenue but raised the low end of its 2026 capex guidance and reported negative free cash flow after a large legal settlement. Tesla beat on adjusted earnings, but its comments on robotics and chipmaking made investors cautious. IBM beat on earnings and revenue, but gross margin missed and its chief executive said customers are concerned about the return on AI spending. See Index Movers for all three. In the Gulf, the US ordered some diplomatic staff to leave Saudi Arabia after the attacks.

The Dollar & FX

• DXY −0.13% as of 06:09 ET, near its lowest since 1 October. The dollar is lower only against the yen. It is slightly higher against the euro, the pound and the Australian dollar. The yen alone is pulling DXY down.
• 6J is carrying the move: USD/JPY −0.81%, the yen's strongest day in about a month (Investing.com, as reported). Two things are driving it: equities are falling and US yields are down about 6bp on the 10-year. Both work in the yen's favour. The BoJ decides on 30 October and is expected to hold. Swaps reportedly put a December hike at about 75-80%.
• 6A: AUD/USD −0.21%. The Australian dollar was Wednesday's strongest major on RBA hike talk. This morning it is trading on risk sentiment, and the Kospi and Nikkei selloffs are weighing on it.
• 6C: USD/CAD −0.14%. CAD is a little firmer, in line with WTI up 2%. As on Wednesday, the oil move is much larger than the CAD move.
• 6E: EUR/USD −0.12% and 6B: GBP/USD −0.07%. Both are near flat. European equities are falling, but the euro and the pound are barely moving.
• Fed odds. The funds rate is 3.75-4.00% (Fed), and the FOMC decides on 28 October. The Fed is in its blackout period, so there are no Fed speakers today. CME FedWatch was reported at about 16-17% for an October hike on 22 October (Finimize, Mitrade). December is reported at 83-90%, depending on the source. We could not confirm a prediction-market figure for today, so this is a single-tracker reading. The market still sees a hike as likely, just not next week.

Energy & Metals

• CL: −0.68% Wednesday, +2.18% overnight. December WTI gave back all of Tuesday night's gain before the EIA report. The report showed a third straight crude draw. Overnight it has ranged 2.44%, sits in the upper third and has not traded below Wednesday's settle.
• Brent: +0.03% Wednesday, +2.73% overnight. It has ranged 2.64%, sits in the upper third and is near a five-month high, back through $110. Its low is 0.91% above Wednesday's settle.
• The catalyst is a strike on Saudi Arabia, not on shipping. A Houthi drone hit near Aramco's Shaybah field, and two people were killed in a drone attack on a Saudi oil field. A separate attack on Dammam airport killed one person and injured eight. Shaybah's operations were reported unaffected. The mechanism: two weeks of attacks on tankers had already priced in risk around Hormuz. This adds risk to Saudi production and infrastructure. No lost output has been confirmed, so the overnight move is a risk premium. Wednesday showed how quickly that premium can come out.
• GC: +0.18% Wednesday, −1.04% overnight. It has ranged 1.97% and sits in the lower third. Its high is 0.34% above the settle and its low 1.63% below. Silver is −2.74% and copper −2.12%, so this is broad metals selling, not just gold.
• Gold is again falling against its usual drivers. The 10-year is about 6bp lower and the dollar is softer, and gold is still down 1%. On Wednesday gold rose while oil fell. Overnight it is falling while oil rises. That fits the reading we gave on Wednesday: oil is pushing inflation expectations up, and a December hike is close to fully priced. But Treasuries are rallying at the same time, so they are not following that reading. That is a contradiction, and the open has to resolve it.

Where We Left Off

• Wednesday's RTH: S&P 500 +0.58%, Dow +0.69%, Nasdaq Composite +1.05%, Russell 2000 +0.27% (AP). MarketWatch matches all four. The Nasdaq-100 rose 1.13%.
• Treasury yields Wednesday: 10-year 5.13%, 2-year 4.81%, 30-year 5.42% (US Treasury, 21 October). That is +1bp, +2bp and unchanged.
• Tech led and defensives lagged. That was the reverse of Tuesday. The tech sector ETF rose 1.68% and staples fell 1-3% after a multi-day rally. Super Micro's guidance pulled the AI-hardware names higher. NVDA +2.54%, TSLA +3.41%, AAPL +1.32%. On the Dow, GS +2.25% and IBM +3.94% were among the largest point contributors. Gains faded in the final hour as oil and yields rose. The VIX rose 10.7% on an up day.
• What carries over: Wednesday's rally was a rebound into earnings, and the earnings came in after it. The Nasdaq-100 rose 1.13% on Super Micro's numbers. Overnight, the next three reports have taken all of that back. The VIX rose while the indices rose, which showed that demand for protection was already there before the results.

Yesterday's Data

• EIA crude −3.1M vs −0.8M expected, a third straight draw, as US production fell for a second week.

On The Calendar Today

Time ET · Event · Consensus · Prior · Hits

Pre-market · Earnings: PG, UNP, BX, VLO, LMT · n/a · n/a · YM · ES

08:30 · Initial jobless claims, w/e 17 Oct · 200K · 199K · USD · ES · GC

08:30 · Continuing claims, w/e 10 Oct · 1,720K · 1,710K · USD

10:00 · Conference Board leading index, Sep · −0.1% · −0.1% · USD

10:30 · EIA natural gas storage, w/e 16 Oct · 80 Bcf · 67 Bcf · NG

11:00 · Kansas City Fed manufacturing, Oct · n/a · 20 · USD

11:30 · 4-week and 8-week bill auctions · n/a · 4.000% / 4.050% · rates

12:00 · Freddie Mac 30-year mortgage rate · n/a · 7.40% · RTY

13:00 · 5-year TIPS auction · n/a · 1.955% · USD · GC

After close · Earnings: INTC, WDC, NEM · n/a · n/a · NQ · ES · GC

16:30 · Fed balance sheet · n/a · n/a · rates

Consensus: TradingEconomics. MarketWatch's calendar lists the same three Thursday releases (claims at 08:30, leading indicators at 10:00, Kansas City Fed at 11:00), so claims are the only 08:30 release. Earnings timings come from an earnings calendar and were not each confirmed with the company.

The fulcrum is the open itself, and claims are the only print that can move it before 10:00. Claims have stayed near 200K. A print close to that would leave futures trading on the AI earnings and oil. A sharp rise would add a growth worry to a market already selling risk, and with yields already 6bp lower, it would probably push them lower still. The 5-year TIPS auction at 13:00 tests demand for inflation protection with crude this high. Intel after the close is the next AI-spending report for NQ. Intel is −4.46% pre-market before it has reported.

Index Movers

Ranked by likely index contribution. Wednesday closes, and pre-market moves as of about 06:43 ET.

• NVDA +2.54% Wednesday, −1.91% pre-market. It is the largest weight in both cap-weighted indices and the biggest single drag on NQ and ES this morning. It is also a Dow member. It is trading on the same AI-spending doubt as SK hynix.
• TSLA +3.41% Wednesday, −3.82% pre-market. Adjusted earnings of $0.48 beat about $0.45 expected. The company cut 2026 capex to about $20 billion from more than $25 billion. Its comments on robotics and chipmaking turned the after-hours reaction negative (company results, as reported). It is in the Nasdaq-100 and the S&P 500, and it is the second-largest drag on NQ.
• AVGO +1.03% Wednesday, −2.64% and MSFT +0.20%, −0.86%. These are the next two NQ drags by weight. Neither reported overnight. They are being sold with the rest of the AI group.
• META +0.47% Wednesday, −0.70% pre-market. Revenue rose 26% to $64.6 billion, against about $63.3 billion expected. Capex was $34.9 billion in the quarter, and the low end of 2026 guidance rose to $135 billion. Free cash flow was negative after a $9.89 billion legal settlement (company results, as reported). An early after-hours gain has gone.
• IBM +3.94% Wednesday, −4.56% pre-market. Revenue was $17.1 billion, up 5% (IBM). Gross margin missed, and the CEO's comments on AI returns turned the stock lower during the call. This is the YM name. In the price-weighted Dow, IBM's pre-market drop and GS −1.19% are about equal-sized point drags. Together they are a larger YM drag than NVDA.
• PG −1.56% Wednesday, +1.24% pre-market ahead of its results this morning. It is a Dow and S&P 500 staple and the main offset for YM if the move holds.

What Would Change The Read

• Scoring Wednesday's calls. We asked whether NQ would hold above Tuesday's settle. It did. The Nasdaq-100 rose 1.13%. We asked whether the rotation would reverse or split. All four indices finished higher, so the chip news lifted the whole market. We asked whether gold would rise if oil fell. It did, +0.18% with WTI −0.68%. Overnight it has done the opposite, falling as oil rises. That makes two sessions in a row where gold has moved against oil.
• Whether NQ reclaims Wednesday's settle. It has not traded above it all night. If the cash session stays below it, the overnight read on AI spending is carrying into New York. If NQ trades back through it, Wednesday's rebound has survived the earnings.
• Whether YM keeps falling less than NQ. At −0.60% against −1.55%, the Dow is losing less mainly because tech is a smaller part of it. PG's report is the Dow-specific test before the open.
• Whether Brent holds its gain with no confirmed output loss. Shaybah was reported unaffected. Any confirmed damage to output would make the move about supply, not risk. Any headline about a settlement would take the premium out, as it did on Tuesday.
• Whether gold keeps falling as yields fall. If gold drops again while the 10-year rallies after the open, the oil-inflation reading is weakening. Metals are being sold alongside equities, which points to liquidation.
• The yen, if equities stabilize. USD/JPY is −0.81% on risk-off flows and lower yields. If the yen gives back gains while stocks are steady, the yen move was mostly about equity risk rather than the BoJ.

The Bottom Line

Three earnings reports have put the same question back on the table: how much AI spending can earn. Overnight the answer was to sell, from Seoul to the Nasdaq futures. NQ is down 1.55% and has not traded above Wednesday's settle all night, so the lead has flipped for the third session in a row. Oil has a new risk premium from a strike on Saudi Arabia itself, with no confirmed loss of output. Gold is falling against both lower yields and a softer dollar. With only jobless claims before 10:00, the session hinges on whether the cash open keeps NQ below Wednesday's settle.

_For informational purposes only. Not investment advice._