Market Wrap, October 22, 2026

The S&P 500 fell 1.2%, with the Nasdaq down 2.64% in its worst session since June 5, as a violent rotation out of technology swamped a market otherwise flush with strong earnings. The proximate trigger was Meta Platforms, which slid 7.3% after its five-year credit default swaps hit a record high on concerns over its spending plans, erasing roughly $100 billion in value and dragging the broader mega-cap growth cohort lower alongside a semiconductor rout that hit Lam Research (-12.4%), KLA Corp (-9.7%) and Applied Materials (-8.2%).

The selloff unfolded against a backdrop of escalating Gulf tensions. Houthi attacks widened to Saudi civilian infrastructure, including strikes claimed on King Fahd Airport in Dammam and an Aramco site in Yanbu, while the Saudi-led coalition said it intercepted a ballistic missile aimed at Najran and multiple drones over Riyadh and Medina. Brent crude touched a five-month high intraday on the supply fears before reversing to post its sharpest weekly drop since April as uncertainty over a US-Iran ceasefire built through the session, and Trump dismissed reports of Iranian strikes on tankers as fabricated attempts to lift oil prices ahead of the midterms. Treasury yields fell sharply in a flight to safety, with the 10-year dropping below 5% for the first time since September 23 and the 5-year touching its lowest level since that date; traders no longer fully price in a Fed rate hike before year-end. Gold fell more than 2.5% to around $4,035 an ounce and silver dropped nearly 5%, moves traders linked to yen intervention chatter and AI-related liquidations rather than the usual safe-haven bid.

Technology was by far the weakest sector, down 3.3%, with the Semiconductor ETF and related chip funds down 6% to 7%. Industrials fell 1.0% despite Lockheed Martin jumping on a deal for a minimum of 850 F-35 jets and raised full-year guidance, as Parker Hannifin and Quanta Services each dropped more than 6%. Consumer Staples was the standout gainer at 3.3%, led by Procter & Gamble's 5.6% rise after the company topped quarterly estimates and raised its sales growth outlook. Utilities (+2.0%) and Real Estate (+1.1%) also benefited from the rate decline. Health Care rose 1.3% even as Moderna collapsed 18.4% on heavy institutional selling that erased roughly $12 billion in market value, pulling Merck down with it despite Merck's own positive Keytruda combination trial data.

Earnings were broadly strong and largely ignored by the tape. Roper Technologies, Allegion, CoStar Group and Lululemon all posted double-digit gains after raising guidance. Honeywell, IBM, Union Pacific, Valero Energy, Nasdaq, Blackstone and Western Digital all beat estimates and either raised guidance or lifted dividends. On the downside, Entegris, nVent Electric, Coherent Corp, GE Vernova and Lumentum Holdings each fell more than 11%, and Hexcel and Rollins posted disappointing results. American Airlines and Southwest Airlines both topped estimates but flagged elevated fuel costs weighing on near-term guidance.

Elsewhere, France's fiscal stress deepened, with the 10-year yield rising above US Treasuries for the first time since 2013 and the 5-year credit default swap spread topping 100 basis points for the first time since 2012.