SpaceX Jumps on Tesla Merger Talk and AI Lifts Nasdaq Futures; Netflix Slides

Good morning. This is Trade and Ticker. Wednesday, October twenty-first, twenty twenty-six. Let's get ready for the opening bell — everything you need before U.S. stocks start trading.

Daily Catalysts. Four things to watch today. First, SpaceX beat expectations and Elon Musk floated a merger with Tesla, and that's giving the A-I trade a lift. Second, Netflix is sliding after a weak forecast. Third, a busy morning for earnings, from A-T-and-T, Intuitive Surgical, Capital One, United Airlines, and Danaher. Fourth, Meta and Tesla report after the close, along with I-B-M, Texas Instruments, and Lam Research. We'll get into each of these as we go.

Let's start with U.S. futures. Tech is back in the lead this morning. As of about eight o'clock Eastern, Nasdaq futures are up about two-thirds of a percent. S-and-P futures are up about a quarter of a percent. And Dow futures are up a little more than a tenth of a percent. The Nasdaq is doing the heavy lifting.

That follows a day when the Dow led. On Tuesday, the Dow jumped about one percent, or roughly five hundred thirty points, on a big rally in health care stocks. The S-and-P added about three-tenths of a percent. The Nasdaq finished just about flat. Small caps did even better, with the Russell two thousand up more than one and a half percent.

Oil is higher again. Brent crude is trading near one hundred ten dollars a barrel, and U.S. crude is up too. The ten-year Treasury yield is a little lower, at about five-point-one percent.

In early trading, the A-I names are bouncing. SpaceX is up about eight percent. Super Micro Computer is up more than ten percent, with Dell up more than five percent and Hewlett Packard Enterprise up more than four. Nvidia, A-M-D, and Intel are each up about two percent. CoreWeave is up a few percent too. Tesla is up more than one percent. On the other side, Netflix is down more than six percent, Intuitive Surgical is down more than six percent, and A-T-and-T is down more than three percent. Capital One is up about three percent.

Now let's get into those four things to watch.

First, SpaceX. It reported third-quarter revenue of about fourteen-point-six billion dollars, up one hundred sixty-one percent from a year ago, and well ahead of the roughly twelve-point-seven billion Wall Street expected. It also posted its first profit as a public company, with net income of about four-point-four billion dollars. The biggest piece of the business is now A-I. SpaceX calls it Super Intelligence, and that segment brought in about seven-point-six billion dollars, more than half of all revenue. Then came the headline. On the call, Elon Musk said a merger of SpaceX and Tesla would be a good idea, and that both companies have formed special committees to look at it. A combined company would be worth about three and a half trillion dollars. Nothing has been agreed. But the results matter for the whole A-I trade. Last week, the worry was that the data-center build-out costs too much, with too much borrowed money. SpaceX and Super Micro are showing real demand. Super Micro now expects quarterly revenue between eighteen and a half and nineteen and a half billion dollars, up from its earlier range of fourteen and a half to fifteen and a half billion. That's the kind of number bulls have been waiting for.

Second, Netflix. Third-quarter profit beat, at eighty-seven cents a share, and revenue was in line. But growth is slowing, and the forecast for the fourth quarter came in below what analysts wanted. Netflix also cut its outlook for advertising revenue this year, to about two-point-seven billion dollars, down from about three billion. That comes days after the company laid off about six percent of its staff.

Third, the morning earnings. A-T-and-T earned sixty-five cents a share on an adjusted basis, ahead of forecasts. Revenue rose about five percent, to thirty-two-point-three billion dollars, and it added a record seven hundred sixty-nine thousand internet customers. It raised its profit outlook for the year to about two dollars and forty cents a share. Even so, the stock is lower. Intuitive Surgical, the maker of da Vinci surgical robots, grew revenue twenty-two percent, to about three billion dollars, and beat on adjusted profit. But it took a four hundred fifty million dollar charge tied to a legal settlement, and the stock is under pressure. Capital One earned six dollars and sixty-nine cents a share on an adjusted basis, well ahead of the five fifty analysts expected. United Airlines came in just short on profit and revenue, with fuel costs up sharply, and the stock is a little lower. Danaher is down after a slight revenue miss, even though it raised its profit outlook. And Philip Morris is down about three percent after a full-year forecast that came in below estimates. One more: the F-A-A has certified Boeing's largest 737 MAX jet, the MAX ten, which clears the way for deliveries. Boeing is up slightly.

Fourth, the big reports after the close. Meta is the one to watch for the A-I trade. Investors want to see that its huge spending on data centers is turning into ad revenue, and they'll be listening for its spending plans next year. Tesla reports too, and now every question on that call will come back to the SpaceX merger talk. I-B-M, Texas Instruments, and Lam Research also report. And at one o'clock Eastern, the Treasury sells twenty-year bonds. With the ten-year yield above five percent, a weak auction could push rates higher.

Here's what would make a higher open fade. Watch three things. First, if oil pushes past its recent highs and drags yields up with it. Second, if the bounce in chip stocks stalls again, since the chip index is still near two-month lows. Third, if a weak bond auction at one o'clock sends yields higher ahead of Meta and Tesla.

So here's the picture heading into the open. Nasdaq futures are up about two-thirds of a percent, with the S-and-P and the Dow pointing higher too. SpaceX and Super Micro are leading a rebound in the A-I names. Netflix, Intuitive Surgical, and A-T-and-T are lower after their reports. Oil is near one hundred ten dollars. And the big test comes after the close, with Meta and Tesla.

Quickly overseas. South Korea jumped more than three percent, and Tokyo was higher, while Hong Kong slipped. Europe is up more than half a percent.

We'll be back at lunch with how SpaceX and the A-I names are trading, and what to watch ahead of Meta and Tesla. Thanks for listening. I'm Trade and Ticker.