Shesa's Stock Market Weekend Updates - 10|25|26

Welcome to my Weekend's Updates

Key Takeaway

U.S. stocks ended a volatile week mixed as concerns about AI spending and rising oil prices weighed on sentiment. The S&P 500 fell 0.5%, and the Nasdaq declined 0.7%, while the Dow gained 0.4% and the Russell 2000 rose 2.0%.

SpaceX, Tesla and Meta beat earnings expectations, while WDC delivered strong results and guidance. However, Meta's higher AI spending outlook raised concerns about investment returns. The Brent crude climbed to approximately $116.72 per barrel on Friday which is really concerning for investors. This week several more major technology companies will report earnings. 

Stock Market Indices

IndexWeekly ChangeClosing LevelYTD
S&P 500🔴 -0.5%7,623.68🟢 +11.4%
Nasdaq Composite🔴 -0.7%25,955.34🟢 +11.7%
Dow Jones🟢 +0.4%52,215.16🟢 +8.6%
Russell 2000🟢 +2.0%2,775.90🟢 +11.8%

Brent crude surged to $116.72 per barrel on Friday amid escalating Middle East tensions. Despite the volatility, all four major indexes remain positive year to date.

Economic Reports

Last Week

  • Manufacturing PMI: Rose to 56.0, above expectations of 55.5, indicating continued expansion.

  • Services PMI: Came in at 57.9, slightly below expectations of 58.0.

  • Inflation Expectations: One-year expectations rose to 4.7% from 4.6%.

The 10-year Treasury yield ended around 4.99%, down approximately 9 basis points for the week. However, rising oil prices remain an inflation risk.

This Coming Week

  • Tuesday, October 27: Durable Goods Orders and Consumer Confidence.

  • Wednesday, October 28: Federal Reserve interest-rate decision.

  • Thursday, October 29: Q3 GDP and September PCE inflation report.

The Fed decision and PCE inflation report will be particularly important market-moving events.

Poll in my WhatsApp Group

I conducted a poll, and the result was a surprising tie: 50% of participants expect the Fed to hold rates, while 50% expect a 0.25% rate hike. My vote goes to no rate hike. In my view, the Fed may hold rates steady this month because Treasury yields have eased over the week. The approaching midterm elections add another source of uncertainty for markets, but persistent inflation and higher oil prices remain risks. I may be wrong, but that's my thought.

Earnings Last Week

SpaceX (SPCX)

  • Revenue: $14.58 billion vs. $12.87 billion expected — beat.

  • EPS: $0.35 vs. $0.13 expected — beat.

  • Outlook: Q4 capital spending is expected to reach $35–40 billion, reflecting major investments in AI computing and infrastructure.

SpaceX reported strong growth, with revenue up 161% year over year and net income of $4.4 billion. However, its aggressive spending plans remain an important consideration for investors.

Tesla (TSLA)

  • Revenue: $28.05 billion vs. $27.88 billion expected (CNBC estimate) — beat.

  • Adjusted EPS: $0.48 vs. $0.43 expected (CNBC estimate) — beat.

  • Guidance: Tesla now expects 2026 capital expenditures to be in excess of $20 billion, down from its earlier outlook of more than $25 billion.

My View: Tesla beat both revenue and adjusted EPS expectations. Tesla and SpaceX have formed special committees to explore a possible merger, but no terms have been agreed and a deal is not guaranteed. If a merger happens, its impact on Tesla shareholders will depend on the price and terms. Hopefully, it benefits shareholders!

Meta Platforms (META)

  • Revenue: $64.60 billion vs. $63.34 billion expected — beat.

  • Adjusted EPS: $7.40 vs. $6.54 expected — beat. GAAP EPS was $3.83 following a $9.9 billion legal charge.

  • Guidance: Q4 revenue of $73–76 billion, versus expectations of approximately $73.65 billion. Meta raised its 2026 capital-spending range to $135–145 billion, increasing the lower end from $130 billion.

My View: Meta's core advertising business remains strong, but investors are concerned about the substantial cost of AI infrastructure and how quickly those investments will generate returns. This stock has been very unpredictable.

Western Digital (WDC)

  • Revenue: $4.38 billion vs. $4.14 billion expected — beat.

  • Adjusted EPS: $4.64 vs. $4.11 expected — beat.

  • Guidance: Q2 revenue of $5.1 billion ± $100 million and adjusted EPS of $5.80 ± $0.20, well above expectations of approximately $4.57 billion and $4.84, respectively.

My View: WDC raised its quarterly dividend by 17% to $0.175 per share. Strong results and guidance highlight robust demand for data-storage products. If sentiment toward AI stocks improves, WDC could benefit.

Key Earnings This Week

  • Wednesday, October 28: Microsoft (MSFT) and Alphabet (GOOGL).

  • Thursday, October 29: Amazon (AMZN).

These results will be important in assessing AI spending, cloud growth and whether investments in AI infrastructure are translating into stronger revenue and profits.

Other News

  • SpaceX / Tesla: Elon Musk confirmed that special committees at SpaceX and Tesla are discussing a possible merger. No deal has been announced, and any potential transaction remains uncertain.

  • Middle East / Oil: Brent crude climbed to approximately $116.72 per barrel on Friday amid Houthi attacks on Saudi energy infrastructure and concerns about supply disruptions. 
  • AI Spending: Meta raised its capital-spending outlook, while Tesla lowered its 2026 forecast. Investors are increasingly focused on whether investments in AI, robotics and data centers will generate sufficient returns.

  • MRNA / Cancer Vaccine: Moderna and Merck presented Phase 3 melanoma-vaccine results. The vaccine reduced recurrence-or-death risk by 42% and distant-metastasis-or-death risk by 38%. Despite positive results, MRNA shares fell sharply amid high expectations and questions about broader use.

Stocks to Watch

GOOG, AMZN, MSFT, TSLA, SPCX, META, NVDA, MU, MRNA, RXRX, TEM, NBIS, PANW and SOXL.

These are not recommendations — just a watch list.

Going Forward

With the Fed decision, major tech earnings and midterm elections ahead, market volatility may remain elevated. Staying selective, trimming positions where needed and keeping some cash available can help manage risk and take advantage of market pullbacks. The next two weeks will be especially important, with the FOMC decision and midterm elections approaching. Hence, it is better to remain watchful.

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