Key points
- Chip index logs its longest losing streak since 2008
- SpaceX, Tesla, and Meta headline this week's earnings
- Why AI borrowers' bonds still worry investors
U.S. stock futures rose Sunday night after last week's AI selloff. As of 9:50 p.m. ET, Nasdaq 100 futures were up 1% at 29,693.75, S&P 500 futures were up 0.6% at 7,749.50, and Dow futures were up 160 points, or 0.3%, at 52,374.
The bounce comes before a heavy week of tech earnings. SpaceX (SPCX) reports Tuesday, followed by Tesla (TSLA), Meta (META), Lam Research (LRCX), and Texas Instruments (TXN) on Wednesday. Western Digital (WDC) reports Thursday.
How last week ended
The Nasdaq Composite fell 4.48% last week, its worst week since late June, and closed Friday at 26,140.03. The S&P 500 fell 1.95%. The Dow gained 0.67%.
Chip stocks were among the hardest hit. The PHLX Semiconductor Index fell for an eighth straight session on Friday, its longest losing streak since October 2008, and closed at 11,137.29.
The Cboe Volatility Index, Wall Street's fear gauge, closed Friday at 19.99. It had closed at 15.21 on Monday, Oct. 12.
This week's big tech reports
All of these companies report after the closing bell. The estimates are consensus earnings per share for the quarter, from Robinhood's earnings calendar as of Oct. 18. Robinhood's data doesn't say whether each estimate is on an adjusted or GAAP basis.
| Day | Company | EPS estimate |
|---|---|---|
| Tue., Oct. 20 | SpaceX (SPCX) | $0.16 |
| Tue., Oct. 20 | Netflix (NFLX) | $0.82 |
| Wed., Oct. 21 | Meta (META) | $5.89 |
| Wed., Oct. 21 | Tesla (TSLA) | $0.40 |
| Wed., Oct. 21 | Texas Instruments (TXN) | $2.41 |
| Wed., Oct. 21 | Lam Research (LRCX) | $2.18 |
| Wed., Oct. 21 | IBM (IBM) | $2.87 |
| Thu., Oct. 22 | Western Digital (WDC) | $4.06 |
Lam Research and Western Digital report after steep losses in memory and storage stocks last week. Western Digital fell 16.4%.
The AI debt overhang
Credit spreads have widened for companies borrowing to build AI data centers. Between Oct. 8 and Oct. 15, spreads widened for all eight AI borrowers in our sample, and the median issuer spread rose from 334 to about 413 basis points. CoreWeave's (CRWV) median spread widened 86 basis points, to 934.
The Federal Reserve's next rate decision comes Oct. 28. A hotter-than-expected September inflation report raised the odds of a rate hike at that meeting.
