Nasdaq Futures Slide as Tesla and Meta Revive AI Spending Doubts; Oil Jumps

Good morning. This is Trade and Ticker. Thursday, October twenty-second, twenty twenty-six. Here's what you need to know before the opening bell.

Daily Catalysts. Four things to watch today. First, Tesla and Meta reported last night, and the A-I trade is giving back yesterday's gains. Second, oil is jumping on new tension with Iran and more attacks in Saudi Arabia. Third, a pile of morning earnings, led by Procter and Gamble and Lockheed Martin. Fourth, weekly jobless claims at eight-thirty, and Western Digital after the close. We'll get into each of these as we go.

Let's start with U.S. futures. The board is pointing to a lower open, and tech is taking the hit. As of about eight o'clock Eastern, Nasdaq futures are down about one and two-thirds percent. S-and-P futures are down about one percent. And Dow futures are down a little more than half a percent. The Nasdaq is leading the way lower.

That reverses a strong day. On Wednesday, the Nasdaq rose about one percent, the S-and-P added about six-tenths of a percent for a third straight gain, and the Dow climbed about seven-tenths of a percent, or roughly three hundred sixty points. Chip stocks jumped about two percent.

Oil is up sharply. Brent crude is up about three percent, to around one hundred twelve dollars a barrel, near a five-month high. U.S. crude is up about two percent, near ninety-nine dollars. Investors are buying bonds for safety, and the ten-year Treasury yield has slipped to a little above five percent. The market's fear gauge, the V-I-X, is up to about eighteen. Bitcoin is down about three percent.

In early trading, the A-I names are lower across the board. Lam Research is down about seven percent. I-B-M is down more than five percent. Tesla is down nearly four percent. Meta is down two to three percent. Intel and A-M-D are each down about four percent. Micron is down more than three percent, and Nvidia is down about two. CoreWeave is down about four percent. SpaceX and Super Micro, yesterday's big winners, are both lower. On the other side, energy stocks are higher with oil, Lockheed Martin is up about three percent, Procter and Gamble is up more than two percent, and Spotify is up about five percent after an upbeat forecast.

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

First, Tesla and Meta. Both beat expectations, and both are lower this morning. Tesla earned forty-eight cents a share on an adjusted basis, ahead of the forty-three cents analysts expected, on revenue of about twenty-eight billion dollars. It also turned out about one-and-a-half billion dollars in free cash flow, when Wall Street was braced for a big cash burn. The reason is spending. Tesla now expects capital spending this year of about twenty billion dollars, down from more than twenty-five billion. But its finance chief said spending will keep rising over the next few years, for robotaxis, the Optimus robot, A-I computing, and a new chip plant. Elon Musk said that chip plant, called Terafab, will need tens of billions of dollars through early twenty twenty-eight. And he said Optimus is still about a year away from shipping to outside customers. So investors got a lower bill now, and a bigger one later.

Meta's quarter was strong. Revenue rose twenty-six percent, to about sixty-four-point-six billion dollars, ahead of the roughly sixty-three-point-four billion expected. Its forecast for the fourth quarter, seventy-three to seventy-six billion dollars, was also above estimates. The stock rose about three percent after the bell. Then it rolled over. Meta raised the low end of its spending plan for the year, to a range of one hundred thirty-five to one hundred forty-five billion dollars. And it announced a new class of non-voting shares, which revived questions about how much money the A-I build-out will take. On top of that, a judge in New Mexico ordered Meta to pay a twenty-five billion dollar penalty in a data privacy case. The big picture: investors still reward A-I spending, but they want to see it pay off.

The rest of the A-I group is following. Lam Research, which sells chipmaking equipment, posted record revenue of about eight-point-two billion dollars. But its forecast for this quarter, about eight-point-six billion, was only a little better than expected, and the stock had run up a lot. I-B-M beat on profit and revenue and raised its software outlook. It's still down more than five percent.

Second, oil. The New York Times reported that the U.S. and Israel have drawn up plans for possible new strikes on Iran after next month's midterm elections. No decision has been made. Late Wednesday, President Trump said Washington is not negotiating with Tehran, and that something will happen fairly soon. There have also been more Houthi attacks in Saudi Arabia, and the State Department has told non-emergency staff to leave the kingdom. Higher oil is hurting airlines. American Airlines now expects a loss for the year, between one dollar and one dollar sixty cents a share on an adjusted basis, and the stock is down three to four percent.

Third, the morning earnings. Procter and Gamble earned two dollars a share on an adjusted basis, well ahead of the one eighty-eight analysts expected. Sales rose four percent, to about twenty-three-point-three billion dollars, led by laundry and home care brands like Tide. It kept its profit outlook for the year, and raised its sales outlook to reflect the purchase of vitamin maker Thorne. Lockheed Martin's sales rose eleven percent, to about twenty-point-seven billion dollars. It raised its outlook for the year and now sees sales of eighty to eighty-two billion dollars. Blackstone is a little lower after its quarterly earnings fell. And railroad C-S-X is up about two percent after a beat.

Fourth, the calendar. Weekly jobless claims come out at eight-thirty Eastern. After the close, Western Digital reports. That's a big name in the data storage trade, which has been one of the hottest corners of the A-I market.

Here's what would make a lower open worse. Watch three things. First, if oil pushes past its recent highs on more Iran headlines. Second, if the selling in chip stocks spreads, since the chip index only just broke a long losing streak. Third, if the selling in Meta deepens, which would weigh on the other big A-I spenders, Alphabet, Microsoft, and Amazon, before they report next week.

So here's the picture heading into the open. Nasdaq futures are down about one and two-thirds percent, with the S-and-P and the Dow pointing lower too. Tesla and Meta beat, but questions about A-I spending are back. Oil is near one hundred twelve dollars. And Procter and Gamble and Lockheed Martin are bright spots.

Quickly overseas. Asia fell hard, with South Korea down three and a half percent, Hong Kong down about three, and Tokyo down more than two and a half. Europe is down about one percent, and French bond yields are near their highest since two thousand two.

We'll be back at lunch with how Tesla, Meta, and the chip stocks are trading, and what to watch from Western Digital. Thanks for listening. I'm Trade and Ticker.