Market Summary

U.S. equity futures point to a modestly higher open on Monday, October 26, with S&P 500 futures up 21.00 points and Nasdaq futures up 131.00 points versus fair value as of 8:01 ET, ahead of a market open that remains closed at the time of this writing. The move follows a bruising finish to last week, in which the major averages posted a mixed close on Friday — the Dow fell 652.82 points (-1.2%) to 52,215.37, the Nasdaq Composite slipped 53.52 points (-0.2%) to 25,975.78, and the S&P 500 shed 39.75 points (-0.5%) to 7,623.75. For the week, the S&P 500 declined 0.5%, the Nasdaq Composite fell 0.7%, while the DJIA managed a 0.4% gain and the Russell 2000 outperformed with a 2.0% advance, underscoring a sharp divergence between mega-cap AI names and the broader market.

Today’s premarket relief is being driven largely by a pullback in crude oil, with WTI sliding $2.17 (-2.1%) to $101.15/bbl after Friday’s sharp surge, easing some inflation-cost concerns. Sentiment remains fragile around the AI trade, however, after SpaceX CEO Elon Musk warned that debt markets have largely cut off financing to AI data-center companies lacking substantial outside revenue, pressuring “neocloud” names in early trading. Investors are bracing for a pivotal week featuring Q3 results from Microsoft, Alphabet, and Amazon — critical readings on AI capex and returns — alongside the FOMC rate decision on Wednesday, where the CME FedWatch Tool assigns a 90.6% probability of unchanged rates.

Beneath the surface, WaveFinder breadth data shows a bearish primary sentiment backdrop, with decliners (1,286) swamping advancers (614) and only 25% of stocks trading above their 20-day moving average (48.52% above the 40-day), reflecting the technology-led volatility and broad market indecision that defined last week’s action.

Market Snapshot

Futures (vs. fair value, 8:01 ET):

S&P 500 futures: +21.00
Nasdaq futures: +131.00 (+90.00 per 05:59 ET early read)

Friday Close (10/23/26):

DJIA: 52,215.37 (-652.82, -1.2%)
Nasdaq Composite: 25,975.78 (-53.52, -0.2%)
S&P 500: 7,623.75 (-39.75, -0.5%)
Equal-Weighted S&P 500: -0.8%

Week-to-Date:

S&P 500: -0.5%
Nasdaq Composite: -0.7%
DJIA: +0.4%
Russell 2000: +2.0%
S&P Mid Cap 400: unchanged

Breadth (WaveFinder, 10/26/26):

Primary Sentiment: Bearish
Primary Bulls: 614 | Bears: 1,286
Above 20-day SMA: 25%
Above 40-day SMA: 48.52%
4% Sentiment / 9M Indicators: Neutral/flat (0 readings across bull/bear counts)

Sector Performance

Last Full Session (Friday, 10/23) — Ranked:
1. Energy: +2.5% (week: +1.6%, best weekly performer)
2. Information Technology: +0.4%
3. (Other sectors not individually detailed for Friday in source data)

Weekly Sector Performance (through 10/23):
1. Energy: +1.6%
2. Health Care: +1.5%
3. Real Estate: +0.9%
4. Utilities: +0.8%
5. Financials: +0.7%
6. Information Technology: -0.3%
7. Industrials: -1.9%
8. Communication Services: -6.2% (worst, pressured by Meta and wireless carriers)

Note: 7 of 11 S&P 500 sectors finished higher on the week despite index-level softness.

WaveFinder Sector ATR (Volatility, 10/26):

Utilities: 2.57% (rising, P95) — highest volatility
Consumer Staples: 2.37% (rising, P95)
Health Care: 2.36% (flat, P68)
Energy: 2.05% (flat, P89)
Materials: 0.92% (rising, P95)
Industrials: -0.73% (rising, P95)
Financials: -1.54% (rising, P63)
Communication Services: -1.65% (flat, P21)
Technology: -2.08% (falling, P0) — lowest/most compressed volatility
Real Estate: -0.38% (rising, P100)
Consumer Discretionary: -0.06% (rising, P79)

Key Earnings & Movers

Verizon (VZ): $44.72, +0.06 (+0.13%) — Beat Q3 earnings consensus, missed on revenue, raised FY26 earnings guidance above consensus.
Netflix (NFLX): $65.54, -0.31 (-0.5%) — Pressured by a Bloomberg report indicating users are spending less time on the platform.
SpaceX (SPCX): $148.29, +0.80 (+0.6%) — CEO Musk’s comments on AI data-center financing weighed on neocloud peers broadly.
Bloom Energy (BE): $193.09, -24.68 (-11.33%) on Friday — Strong revenue growth and raised FY26 outlook overshadowed by negative free cash flow and expansion costs.
Western Digital (WDC): $343.67, -10.52 (-2.97%) on Friday — Beat estimates but guidance concerns weighed on shares.
Palo Alto Networks (PANW): $380.55, +25.63 (+7.22%) on Friday — Among top S&P 500 performers as software stocks outperformed semis.
CrowdStrike (CRWD): $257.57, +19.63 (+8.25%) on Friday — Strength mirrored broader software sector outperformance.
Comfort Systems (FIX): Lower despite Q3 EPS +68.6% yr/yr to $13.91 and revenue +53.7% to $3.77 bln; record backlog of $17.81 bln (+90.0% yr/yr); investors focused on AI-spending sustainability concerns rather than results.
American Express (AXP): Trading lower despite Q3 adjusted EPS of $4.68 (+13% yr/yr, beat by $0.18); revenue of $20.06 bln slightly missed the $20.12 bln estimate; raised FY26 EPS floor to $17.60–$17.90.

Stock Spotlight

Comfort Systems (FIX) stands out as the most significant mover from the latest earnings batch, ranking among the top laggards in the S&P 500 despite delivering one of the strongest quarterly beats of the season. Q3 EPS surged 68.6% yr/yr to $13.91 while revenue jumped 53.7% to $3.77 billion, powered by a 90% yr/yr surge in backlog to a record $17.81 billion. Technology-sector customers — now 60.8% of total revenue, up from 45.8% a year ago — drove nearly 90% of the company’s overall revenue increase, reflecting FIX’s deep entrenchment in the data-center and AI infrastructure buildout.

Despite the blowout numbers, shares sold off as investors grew increasingly wary of FIX’s heavy dependence on AI-related capital spending amid broader market concerns about the durability and financing of the AI infrastructure cycle. Gross margin held flat yr/yr at 24.8% (though down 110 bps sequentially), and operating margin expanded 110 bps to 16.6%, showing genuine operating leverage. Briefing.com’s analysis suggests the stock’s negative reaction reflects “shifting investor sentiment” rather than deterioration in underlying demand — but it illustrates how thoroughly AI-adjacent names, even those with no direct AI-chip exposure, are being swept into the broader re-rating of the AI trade.

Bond Market & Treasuries

Overnight/Premarket (10/26, 08:04 ET):

10-Yr yield: 5.001% (-3/32 in price)
2-Yr: 4.71% (+3 bps)
3-Yr: 4.78% (+3 bps)
5-Yr: 4.83% (+2 bps)
10-Yr: 5.00% (+1 bp)
30-Yr: 5.32% (unchanged)

Treasuries are on track for a softer start in shorter tenors, with the long bond near unchanged. French OATs are outperforming after Moody’s affirmed the Aa3 rating Friday (Negative outlook maintained). A $69 billion 2-year note auction is scheduled for 13:00 ET today, kicking off this week’s supply slate.

Prior Session (Friday, 10/23): The 10-year yield rose 4 bps to 4.988%, still posting an 11-bp decline for the week — its third consecutive weekly gain in price — as yields fell below 5.00% intraweek for the first time since September 22 before Friday’s reversal. The retreat in yields supported rate-sensitive sectors; the iShares U.S. Home Construction ETF gained 4.8% on the week.

Commodities

WTI Crude: $101.19/bbl, -2.0% (down from Friday’s settle of $103.17, which was +3.7%/+$3.72 amid U.S.-Iran tensions)
Gold: $4,033.50/ozt, +0.6%
Copper: $6.521/lb, +0.2%
Brent crude (context from earlier in week): previously trading near $114.78/bbl amid geopolitical tensions

Crude’s pullback this morning is providing a tailwind to equity futures by easing inflation and input-cost concerns tied to last week’s spike.

Overseas Markets

Asia (mixed, AI-return concerns weighing on tech):

Nikkei (Japan): 62,189.65, -503.50 (-0.8%)
Hang Seng (Hong Kong): 23,211.81, +118.40 (+0.5%)
Shanghai Composite: +0.2%
Sensex (India): +0.5%
Kospi (South Korea): -1.5%
All Ordinaries (Australia): +0.2%

Technology and semiconductor shares faced pressure across Japan, China, and South Korea, while elevated crude prices supported energy shares in Hong Kong.

Europe (mostly higher):

STOXX Europe 600: +0.4%
DAX (Germany): +0.9%
FTSE 100 (U.K.): +0.5%
CAC 40 (France): +0.7%
FTSE MIB (Italy): +0.8%
IBEX 35 (Spain): -0.2%

Lower oil prices and easing bond yields are providing relief ahead of this week’s central bank decisions (Fed, ECB, BoJ) and a heavy earnings slate.

Economic Data

Japan (August): Coincident Indicator -1.8% m/m (expected -1.9%; prior +1.7%); Leading Index +0.4% m/m (as expected; prior +1.5%); Leading Index level 118.0 (as expected; prior 117.7)
Singapore (September): Industrial Production +3.4% yr/yr (prior +15.4%); -3.9% m/m (prior -1.0%)
Germany (October): Ifo Business Climate Index 90.2 (expected 90.0; prior 89.9); Business Expectations 91.6 (expected 90.0; prior 90.4) — beat; Current Assessment 88.8 (expected 89.9; prior 89.5) — miss
Spain (September): PPI +18.3% yr/yr (prior +13.2%) — sharp acceleration
U.K. (October): CBI Distributive Trades Survey -10 (expected -47; prior -55) — notable beat, less negative than expected

No U.S. economic data is scheduled for release today.

Looking Ahead

Today (10/26): $69 billion 2-year Treasury note auction results at 13:00 ET; no U.S. economic data on the calendar.
This Week: FOMC interest rate decision Wednesday (90.6% probability of unchanged rates per CME FedWatch); Bank of Japan and European Central Bank policy decisions also due this week; U.K. Autumn budget presentation Wednesday.
Key Earnings: Microsoft (MSFT), Alphabet (GOOG), and Amazon (AMZN) all scheduled to report this week — critical for assessing AI capital-spending commitments and returns following last week’s volatility.
Economic Data (per prior commentary): Advance Q3 GDP release expected Thursday (Briefing.com consensus 3.0%; prior 2.2%), with three Treasury note auctions scheduled across the week.
Geopolitical/Policy Watch: China’s Communist Party fifth plenum underway; France’s political landscape in focus after Le Pen’s presidential campaign launch; Brazil’s Lula narrowly reelected.