Morning Brew October 23 2026

Good morning.

Higher oil prices and renewed doubts about the AI story triggered a broad equity selloff. The S&P 500 fell 1.2% and the Nasdaq Composite dropped 2.6%, its worst session since June, as high-profile earnings reignited concerns about the AI spending race. Procter & Gamble helped support the Dow to close basically unchanged.

France’s 10-year yield has overtaken its U.S. counterpart. Bonds attracted safe-haven demand globally, but French debt apparently failed to qualify: its yield rose to 5.08%, while the U.S. 10-year fell below 5% to 4.96%. The European benchmark fell to 3.33%, Japan to 2.78% and Switzerland to 0.48%.

Brent crude rose to USD 114 a barrel following renewed attacks in Saudi Arabia and a complete lack of progress between the United States and Iran.It is trading at USD 114 this morning.

Ukraine The Wall Street Journal reports  President Trump called Elon Musk on Wednesday and asked him to lift restrictions on a military-grade version of Starlink in Ukraine that the SpaceX  chief had throttled, U.S. officials said.The system was working more normally Thursday, shortly after their conversation, U.S. and Ukrainian officials said. Some Ukrainian officials said the system wasn’t restored to full functionality but was working at higher speeds than under the cap.

U.S. refining remains under pressure from tight global supplies of refined fuels. The Energy Information Administration said refiners maintained higher-than-normal run rates this year, supported by strong margins. Refinery utilization averaged more than 95% between May and September, the highest for those months since 1998. The concern is that running so hard will eventually require substantial maintenance.

U.S. energy policy is responding to the pressure. On Thursday, President Donald Trump designated petroleum production, refining and related activities as essential to national defence. In a presidential memorandum, he also invoked part of the Cold War-era Defense Production Act, allowing financial incentives for oil-related activities, pipelines and liquid fossil-fuel storage projects.

Russian LNG remains another energy flashpoint. Senior Russian political and energy officials urged the EU on Thursday to reconsider its planned import ban, arguing that low gas-storage levels had left Europe in a precarious position.

Meta beat earnings expectations, but its shares fell 7% after AI-related expenditure drove its first cash outflow in more than a decade. The company also announced plans to issue non-voting shares through a two-for-one split to raise capital for AI investment.

Tesla fell 3.1% despite unexpectedly reporting positive quarterly free cash flow and cutting its 2026 capital-spending plans.

Procter & Gamble rose 5.6% after beating analyst estimates, supporting consumer staples and the Dow. However, the company warned that rising costs would take an increasing bite out of profit.

Semiconductors suffered particularly heavy losses. The Philadelphia Semiconductor Index, which has driven much of the bull market, plunged 6.7%, its largest daily decline since 23 June. It is now more than 26% below its record closing high on 22 June, yet remains up 51.5% year-to-date, compared with an 11.9% gain for the S&P 500.

U.S. trading volume reached 18,790 million shares, above the average of 17,190 million.

European equities followed the global risk-off mood. The Stoxx 600 fell 1%, its worst session since 1 October, while the DAX lost 1.1%, the FTSE 100 slipped 0.3% to 10,725 and Stockholm’s OMX fell 2.5%. ASML dropped 5%, making it the largest drag on the Stoxx 600. Siemens Energy lost 8.6%, Nokia fell 9.7% and AT&S plunged 18.6%.

SK Hynix on Friday put a planned U.S. listing of its Solidigm chip unit on hold because of market volatility. The move also follows concerns from South Korean authorities that the deal could undermine shareholder interests.

Japanese inflation added to the case for a near-term rate increase. Core consumer inflation exceeded the Bank of Japan’s 2% target in September for the first time in nine months, signalling broader price pressures.

Gold and silver fell sharply, with silver reaching its lowest level in 12 months. Gold is trading near 4,000 after breaking below support at 4,100.

FX sees the USD Index at 101.70, with EUR/USD at 1.12, USD/JPY down to 156.90 and GBP/USD at 1.3390. EUR/CHF is trading at 0.9210 and USD/CHF at 0.8215.

The U.S. administration cannot be happy with rising oil prices and the resulting inflation. Expect a flurry of activity, at least to project decisiveness. The key question is whether it will act before or after the midterm elections.

The outlook is less about today’s scheduled events, which I doubt will have a significant market impact, and more about overall sentiment. Traders will assess whether recent developments change the outlook for next week’s central-bank decisions and what U.S. inflation might bring.

Friday, 23 October 2026

Macro: UK retail sales; flash manufacturing and services PMIs for Germany, the euro area, the UK and the United States.
Corporate earnings: American Express, SLB, Eni and Volvo; Safran and Holcim report sales updates.

Monday, 26 October 2026
Macro: Germany Ifo business climate.
Corporate earnings: Verizon, Cadence Design Systems and Welltower.

Tuesday, 27 October 2026
Macro: U.S. durable goods orders, Conference Board consumer confidence and new home sales.
Central banks: Federal Reserve meeting begins.
Corporate earnings: Novartis and HSBC; Visa and Coca-Cola.

Wednesday, 28 October 2026
Central banks: Federal Reserve rate decision and press conference; Bank of Canada rate decision.
Corporate earnings: UBS, Deutsche Bank, Airbus and GSK; Unilever trading statement; Microsoft and Alphabet.

Thursday, 29 October 2026
Macro: U.S. advance Q3 GDP, personal income and spending, PCE inflation and initial jobless claims.

Friday, 30 October 2026
Macro: Euro-area flash Q3 GDP and preliminary October inflation; U.S. Q3 Employment Cost Index; month-end flows.
Central banks: Bank of Japan rate decision and Outlook Report.
Corporate earnings: Sanofi, AstraZeneca and BP; ExxonMobil, Chevron and AbbVie.

Risk-off sentiment has returned as yesterday’s optimism failed to carry into the Asian session. Higher oil prices, renewed worries about escalation in the Middle East and fading momentum in the AI trade are weighing on markets. The U.S. State Department has ordered some diplomats and family members to leave its missions in Saudi Arabia and plans to withdraw family members from several other U.S. missions in the region.

Asian equities are sharply lower, with South Korea’s Kospi down more than 3% and Japan’s Nikkei losing more than 2%. European and U.S. futures also point lower: the Nasdaq is down 1.5%, the S&P 500 0.8%, the Dow 0.5% and the DAX 0.4%. Gold is trading near 4,090 and silver near 56, while EUR/USD is at 1.1245, GBP/USD at 1.34 and USD/JPY at 157.70.

Oil and AI appear to be the main sources of concern. Brent is back above USD 110 a barrel, while the AI trade is struggling to build on yesterday’s recovery.

Bond yields are surprisingly  calm overall, but France remains the main concern. The French 10-year yield is trading above 5% for the first time since 2002, while its spread over German debt is the widest since the euro crisis 15 years ago.

Nestlé reported stronger-than-expected growth this morning, with organic sales rising 4%.

Website outages affected numerous government, hospital, school and other public-facing sites yesterday after two critical vulnerabilities were disclosed in PHP, the server-side programming language used across a large share of the internet and by platforms including WordPress, Drupal and Joomla. The disruption was largely precautionary rather than the result of a single network failure. Cybersecurity agencies advised operators to install emergency patches immediately or temporarily shut vulnerable systems because the flaws could allow attackers to execute code remotely and access servers or databases without authentication. Some older systems may remain offline while updates are tested and deployed.

U.S. equities advanced for a third consecutive session on Wednesday. The S&P 500 rose 0.6% to 7,757, its strongest daily gain since 9 October, while the Nasdaq 100 added 1.1% and the Dow gained 0.7% to 52,856. SpaceX surged around 8% on strong third-quarter results, Super Micro Computer jumped around 10% after preliminary earnings beat estimates and Nvidia gained around 3% in its best session in more than a month. Chipotle fell around 5% to its lowest level in nearly four years. After hours, Tesla lost around 3% despite a profit beat as capital-expenditure guidance disappointed, while Meta rose 2% after raising its spending outlook and announcing a new class of non-voting shares through a two-for-one stock split.

A US Court  ordered Meta to pay the state $25 billion after a jury found the company had misled consumers about the privacy of their data – one  the largest financial penalties in US history.

European equities also rallied on Wednesday, supported by upbeat corporate earnings and improving AI sentiment. The Stoxx 600 rose 0.9% to 644, its largest gain since 9 October, while the Euro Stoxx 50 climbed 1.4% to 6,208. The DAX gained 1.3% to 25,645, led by SAP and Adidas after the latter reported third-quarter operating profit 36% above consensus. The CAC 40 advanced 1.1% to 7,922.

Russia and Ukraine may return to U.S.-mediated peace talks as early as next month, according to the Kremlin. The announcement followed a meeting between Russian President Vladimir Putin and U.S. envoy Steve Witkoff as Washington renewed efforts to end the conflict.

The outlook remains difficult to read and highly headline-driven. Procter & Gamble’s guidance is the most important scheduled event today, while oil, the Middle East, Russia–Ukraine negotiations, the proposed Tesla–SpaceX merger, the U.S. midterms and broader risk sentiment remain the key drivers. The website outages may add to the cautious tone. Ahead of a heavy week of earnings, inflation data and central-bank decisions, markets are likely to remain volatile and sensitive to sudden shifts in the news flow.