Analytical Reviews

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Meta, Tesla earnings to test AI trade
07:01 2026-10-19 UTC+00

Futures bounced today after Friday's Wall Street sell-off, giving the market a brief breather before a slate of earnings that could determine the next direction. Nasdaq 100 futures rose by 1.3%, and S&P 500 futures gained roughly 0.8%. The MSCI Asia Pacific trimmed morning losses and was down about 0.2%. Oil pulled back, with Brent falling by 1.8% to $107.90/bbl, pulling back from a five-month high.

This rebound follows a heavy week. The semiconductor index posted its longest losing streak since 2008, the VIX had its sharpest jump since June, and the Nasdaq 100 lost 5.5% on the week. Nvidia CEO Jensen Huang took the sell-off in stride and urged investors to focus on AI's long-term value. "All of this will pass," he said.

The upcoming earnings will be a test of that claim. Netflix reports on Tuesday; Tesla, Meta, and IBM report on Wednesday. Meta has become a bellwether for the AI theme, so its results will show whether massive infrastructure spending is paying off. Some investors fear that rising US inflation and AI-sector anxiety will amplify tech stock volatility and spill over across markets. Recall that bond market volatility remains elevated, and higher fuel and food prices add pressure on central banks.

Europe started the week softer. European equity futures and French 10-year yields fell after large protests in France over the weekend, and the euro weakened against most G10 currencies. Buyers returned to US Treasuries: the 10-year yield eased by 1 basis point to 5.06% and is about 17 bps lower on the week. Bonds are gradually reclaiming a safe-haven status, which could surprise those who had bet on further back-to-back yield increases this year.

Gold began the week higher, up about 0.4% to $4,181/oz as traders trimmed chances of a Fed hike this month after Fed Chair Kevin Warsh's remarks on Friday. Bitcoin gained more than 2% and moved above $82k.

The market views the Middle East with mixed signals. Escalation pushed oil to five-month highs, but signs that regional supplies are holding near pre-conflict levels helped prices retrace. Oil above $107 remains a problematic backdrop for inflation and central banks and is the main driver of rate worries.

All told, the futures bounce looks more like a technical pause than a structural reversal. In my view, Meta and Tesla results will determine whether the market gets a reason to buy dips. Disappointing reports would push the VIX higher again and send the Nasdaq 100 back to test recent lows. While oil stays above $100, and yields remain elevated, I don't expect a durable rebound in the tech sector this week.

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As for S&P 500 technicals, the immediate task for buyers is to overcome the resistance level of $7,718. That would trigger upside momentum and open the way to $7,737. Holding $7,756 is also a priority for bulls to strengthen positions. If the price moves lower amid declining risk appetite, buyers need to step in around $7,698. A break below that level would likely push the index down to $7,679 and open the path to $7,656.

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