Weekly Market Brief: Fed Stand-Off, Big Tech Earnings & Geopolitical Headwinds

Monday, October 26, 2026 | Daily briefing on central bank decisions, Musk’s AI debt split, Big Tech earnings, and Bitcoin’s pullback below $80K.

Summary of the Day

Our View: We are entering the busiest calendar week of the year: three major central bank rate decisions,earnings from one-third of S&P 500 companies, and the midterm elections just a week away. Entering such a week by reducing risk is rational, and Bitcoin dropping below 80,000 is a result of this. The main point to watch is Musk’s statement: debt markets have closed to companies without independent revenue streams, separate from AI data centers. This means the divergence in the sector is now finalized on the financing side—an opportunity for large companies, an existential risk for small ones. Wednesday coincides with the Fed decision and earnings from Alphabet and Microsoft; the market’s direction for the week will largely be determined that evening. Until then, we do not view increasing positions as prudent. Qatar’s mediation efforts pushed oil prices down, but expectations of an attack post-midterms remain, meaning the pullback is not permanent.

• Bitcoin dropped below $80,000. Investors are reducing risk ahead of Wednesday’s Fed decision; Ether fell 3% to $2,326, and XRP fell 3% to $1.29. Prices remain below the $82,500 level lost on October 23.
• SpaceX borrowed $40 billion to buy chips. Musk stated that the majority of the debt can be paid off early and that they achieved this thanks to revenues from Starlink and rocket launches; repayments are expected in the first half of 2027.
• Musk’s sector warning: Debt markets have closed. “Over the past few weeks, debt markets have provided almost no access to any company that doesn’t have significant revenue independent of AI data centers.” He predicts that over 200 data center colocation companies will merge, with only a few surviving.
• The U.S. is evacuating personnel from the Middle East. Director of National Intelligence Clayton: Iran’s lethal planning efforts targeting U.S. citizens have reached advanced stages both in the Middle East and in certain other countries. Trump mentioned the possibility of a new operation during a Friday rally.
• Brent pulls back from a six-month peak: $114.51. Qatari mediators were in Tehran on Sunday. Brent rose 6% last week to post its highest weekly close since mid-2022.
• Three central bank decisions this week: Fed on Wednesday, ECB on Thursday, BOJ on Friday; interest rates are expected to remain steady in all three. Canada and New Zealand are expected to hike. The probability of a December rate hike for the Fed is priced at 80%.
• Lula wins for the fourth time in Brazil. He secured 51.8% of the vote, while Flavio Bolsonaro took 48.2% and announced he does not accept the result and will demand its annulment. The Brazil equity fund dropped 18-20% in overnight trading.
• Today: Germany’s IFO business climate survey. Wednesday features the Fed decision along with Alphabet and Microsoft earnings, Thursday brings the ECB and Amazon, and Friday the BOJ. U.S. third-quarter GDP is expected at 3.2%, and core PCE at 3.1%.

Story of the Day

Musk: The debt market has split in two

The most important statement of the week came on Sunday night, setting a clear threshold in the AI financing debate. SpaceX announced it has raised $40 billion in debt to purchase graphics processing units (GPUs)—the powerful processors that run AI systems. The majority of the debt is callable, meaning the company can repay it before maturity if it chooses; financing is expected to be deployed in the first and second quarters of 2027. According to Bloomberg reports, the structure uses a special purpose vehicle to keep the debt off SpaceX’s balance sheet and protect its investment-grade credit rating.

What stands out most is the warning Musk added to this announcement: over the past few weeks, debt markets have provided almost no access to any company that lacks significant revenue independent of AI data centers. The reason SpaceX was able to borrow is its strong credit rating and stable revenues from Starlink internet services and rocket launches; these businesses are not tied to AI data centers, making chip financing much easier compared to companies whose revenues rely entirely on data centers. Musk predicted that over 200 “neocloud” companies renting out AI processing power will merge, with only a few surviving. Venture capitalist Chamath Palihapitiya had previously made a similar assessment, arguing that most of these companies are poorly financed and managed, that Amazon, Microsoft, and Google are moving slowly on deals and preferring to hoard processing power for their own use, and that delays in data center construction could leave many chips and unfinished projects idle in 2027 or unable to cover financing costs.

The importance of this statement is that it draws a definitive line under the debate we have watched in recent weeks. Throughout October, CoreWeave’s bond yield exceeding 15%, Oracle’s credit rating nearing junk status, and Meta burning cash for the first time were separate warnings; Musk combined them into a single sentence. There are now two distinct worlds for AI companies: those with independent revenue can borrow,while those without cannot. This distinction has also become decisive for stock selection. Nasdaq futures are trading around 29,080 this morning, noticeably behind the 30,000 level seen at the beginning of the month.

The busiest week of the year

This week faces tests on three distinct fronts. First, central banks: the Fed on Wednesday, the European Central Bank on Thursday, and the Bank of Japan on Friday are announcing decisions, with interest rates expected to remain on hold in all three; conversely, the central banks of Canada and New Zealand are expected to hike. JPMorgan global chief economist Bruce Kasman summarizes the picture: the main message coming from global central banks grappling with this year’s macroeconomic surprises is that a relatively shallow rate-hike cycle remains in effect; the big three central banks are likely to remain on hold, but Canada should begin its tightening cycle, and initial moves from the UK and Sweden are expected next month. Market pricing for the Fed is clear: a 90% probability that rates will hold steady in the 3.75%-4.00% range on Wednesday, with an 80% chance of a hike in December. However, Bank of America holds a contrary view and expects a hike this week; bank economist Claudio Irigoyen well describes the dilemma: October’s decision will be a test of Chair Warsh’s determination to bring about a radical shift in the Fed’s forward guidance strategy; Warsh’s challenge in the press conference will be to prevent a policy mistake, because if the Fed hikes,investors may worry about over-tightening, while if it holds steady, markets could question the bank’s credibility in fighting inflation.

The second front is earnings. Nearly one-third of S&P 500 companies report this week, centered around the three major cloud providers: Alphabet and Microsoft on Wednesday, and Amazon on Thursday. Analyst expectations stand at $90.6 billion in revenue and $4.73 in adjusted earnings per share for Microsoft, $202 billion in revenue and $1.97 in earnings for Amazon, and $128 billion in revenue and $3.00 in earnings for Alphabet. The primary focus will not be on the headline numbers but on guidance: these companies’ capital expenditure plans and whether they are seeing returns on these massive outlays. Total capital expenditure by the major cloud providers this year is expected to reach approximately $800 billion. Kevin Mahn, president of Hennion & Walsh Asset Management, highlights its importance: earnings are critical regarding overall confidence in the AI trade and how much longer the spending can continue. King Lip, chief strategist at BakerAvenue Wealth Management, ties the answer to this question: he believes earnings will determine whether this tech pullback is a buying opportunity or the precursor to a deeper correction; what is needed is another round of genuinely strong earnings. More than 100 companies have reported so far in the third quarter, and S&P 500 earnings are on track to rise more than 32% year-over-year. In Asia, SK Hynix and Samsung also report this week; SK Hynix stated it will announce shareholder return measures on Wednesday,responding to reports that it is considering a special dividend of approximately 16 trillion won ($12 billion).

The third front is politics. The U.S. midterm elections are on November 3, and bets on Democrats taking control of Congress from Republicans are increasing. Nick Giorgi, head equity strategist at Alpine Macro,summarizes the environment: there are too many balls in the air; next week brings many more tech earnings,and the market is currently looking with a discerning eye at all the spending accompanying AI; the market is no longer giving the benefit of the doubt to companies spending tons of money on this buildout, which in our view is actually very healthy but points to short-term pain nonetheless. The data calendar is also heavy: U.S. core inflation in September is expected to remain high at 3.1%, with the economy growing at an annualized 3.2%,driven partly by heavy spending on data centers.

Mediation and evacuation in oil simultaneously

Oil prices declined on Monday: Brent fell 1.89% to $114.51, and WTI dropped 2.16% to $101.04. The reason,according to Reuters reports, was Qatari mediators traveling to Tehran on Sunday as part of regional de-escalation efforts coordinated with the U.S. However, the durability of this pullback is questionable, with two experts pointing to the same point. Vandana Hari, founder of Vanda Insights: renewed military conflict concerns in the Middle East, which drove much of last week’s crude rally, have eased this morning, but this relief may be temporary; Trump has not dispelled market expectations that attacks on Iran could still follow the November 3 midterms, so we expect volatility to remain high and risks to still be skewed to the upside.Priyanka Sachdeva, head of market insights at Phillip Nova, shares the same view: supply risks around the Strait of Hormuz are firmly entrenched, and the current pullback appears to reflect position adjustments and risk management rather than a meaningful improvement in the underlying supply situation.

Developments over the weekend justify this skepticism. The Wall Street Journal reported Saturday that the U.S. is rapidly evacuating personnel from embassies and military bases across the Middle East; intelligence indicates Iran is preparing attacks targeting Americans. The note dated Friday sent by Director of National Intelligence Jay Clayton to Secretary of State Marco Rubio is clear: Iran has significantly stepped up efforts to target U.S. personnel; the lethal planning efforts by Iranians targeting U.S. citizens have reached advanced stages both in the Middle East and in certain other countries. These evacuations go significantly beyond the decision reported during the week to remove certain diplomatic personnel from Saudi Arabia. Trump threatened a renewed escalation in the war after the midterms during his rally in Florida on Friday, mentioning the possibility of a similar move by referencing the previous operation. Attacks also continued: the Houthis announced Saturday that they hit an airport and oil facilities in Saudi Arabia, and Saudi Arabia reported intercepting additional missiles and drones on Sunday; on Monday, the Houthis claimed attacks on East-West crude pumping stations and the Riyadh airport, though no confirmation has yet come from Riyadh. Michael Alfaro, chief investment officer at Gallo Partners, estimates geopolitical uncertainty has already added about $20 per barrel to oil prices and points to the main risk: a major attack on Saudi Arabia’s East-West pipeline or additional refinery infrastructure could drive prices sharply higher, though demand destruction would be seen if Brent moves into the $120-$140 range. Alfaro adds that the real challenge is refining capacity, which could become a more persistent structural problem extending into 2027 and beyond. Meanwhile, International Energy Agency Chief Fatih Birol said at an industry event in Singapore on Monday that he does not expect energy markets to return to pre-Iran-war levels in 2027.

Market Tour

Equities

Wall Street closed Friday in the red: the Dow fell more than 650 points, or 1.23%, to 52,215, the S&P 500 dropped 0.52% to 7,624, while the Nasdaq 100 finished flat at 28,958. Both the S&P 500 and the Nasdaq notched their second consecutive weekly decline. The VIX stood at 19.45, up 24% for the month, signaling unease. Energy outperformed on a stock basis: Chevron rose 2.88% to $233.21, and Exxon gained 2.79% to $183.21, both sitting just 0.2%-0.3% below their 52-week highs with relative strength indexes in the 76-77 overbought zone. On the technology side, AMD closed up 1.74% at $516.79, TSMC gained 1.49% to $418.51,ASML rose 0.72% to $1,571.80, and Microsoft increased 0.66% to $524.51; conversely, Alphabet fell 1.24% to $320.21, Meta dropped 0.96% to $642.62, and Amazon declined 0.95% to $248. Meta remains the weakest major name with a 9.4% weekly loss, standing 17.6% below its 52-week high. U.S. futures are in the green this morning: S&P 500 up 0.25%, Dow up 0.31%, and Nasdaq 100 up 0.29%.

Asian markets are mixed and cautious on Monday: the MSCI Asia-Pacific index excluding Japan is flat,struggling to recover from a four-week losing streak—its longest decline since April. Japan’s Nikkei fell 0.24% to 62,542 after losing 4% last week; South Korea’s KOSPI dropped 0.65% to 5,514, down nearly 20% this month, prompting Goldman Sachs strategists to slash their 12-month target for the index by 25%. China’s CSI 300 index fell 0.5% for its 11th consecutive weekly loss as the Communist Party’s fifth plenary session got underway in Beijing. Hong Kong’s Hang Seng rose 0.53% to 23,217, though its relative strength index is near oversold levels at 31. Indonesia’s Jakarta index dropped 1%; authorities announced new measures to strengthen market surveillance, but pressure persists following MSCI’s warning that it could downgrade Indonesia to standalone market status this month over trade transparency concerns, while the rupiah depreciated 0.39%. European futures are positive: Euro Stoxx 50 up 0.3%, DAX up 0.3%, FTSE up 0.4%; France avoided a Moody’s downgrade last week. The BIST 100 fell 0.92% to 11,117; the weekly loss stands at 5.16%, the monthly loss at 13.74%, and the index remains 26.9% below its 52-week high, with its relative strength index lingering deep in oversold territory at 27.3.

Foreign Exchange

The dollar index is slightly soft at 101.70; major currencies are trading in narrow bands ahead of central bank decisions. Ray Attrill, head of FX strategy at National Australia Bank, explains the mechanism: for now, this seems to indicate that the U.S. bond market is in the driver’s seat for broader dollar performance; the market is reacting to the drop we’ve seen in Treasury yields and the narrowing yield differentials between the U.S. and other developed currencies, which has taken some heat off the dollar. The euro rose 0.16% to 1.1220,benefiting from the relief of France avoiding a Moody’s downgrade despite social unrest; the agency maintained its Aa3 rating and negative outlook, but noted in its statement that a significant and sustainable fiscal effort is still necessary beyond the presidential elections in April and May 2027 to place public finances on a sounder footing and stabilize a debt burden projected to exceed 120% of national income in 2027.Sterling stands at 1.3374; UK Chancellor John Healey will present his first budget on Wednesday against a backdrop of rising global borrowing costs and high energy prices. The yen is at 157.07, retaining its safe-haven appeal after gaining about 0.8% last week. The Australian dollar is strong at 0.7028, and the New Zealand dollar at 0.5720, supported by rate-hike expectations on Wednesday. The Canadian dollar trades near a one-month high at 1.4009. USD/TRY hit a new high at 49.76, with its relative strength index at an extreme overbought reading of 97.6. The Brazilian real has not yet traded in the Asian session.

Commodities

Oil declined amid the dual picture outlined above: Brent at $114.51, WTI at $101.04. Last week, Brent surged 6% to post its highest weekly close since mid-2022, while WTI gained 2.3%. In structural news, according to the energy ministers of Saudi Arabia and Singapore, Aramco will begin storing crude oil in Singapore starting in the second half of 2027; the aim is to enhance supply chain resilience in the region. The U.S. Department of Energy authorized the release of up to 400,000 barrels from the Strategic Petroleum Reserve on Friday to address supply disruptions at a Louisiana refinery. Precious metals staged a modest recovery but sit on heavy weekly losses: gold rose 0.47% to $4,026.90 after losing 3.69% last week, sitting 27.9% below its 52-week high with a relative strength index of 30.7 in oversold territory. Silver gained 1.08% to $54.29, down 4.75% for the week with an RSI of 29.7; palladium stood at $1,046.50 as the weakest group member with a 6% weekly loss and an RSI of 26.9 in deep oversold territory, while platinum traded at $1,550.70. It is notable that all four metals are in oversold territory, increasing the likelihood of a technical bounce, though persistent energy-driven inflation expectations maintain downward pressure. Copper rose 0.15% to $6.49, remaining the most resilient in the commodity complex at just 5% below its 52-week high. Natural gas jumped 13.45% to $3.00, marking the sharpest move of the day.

Crypto

Bitcoin dropped 0.44% to 2% in Asian trading on Monday, slipping into the $79,800–$80,233 range and breaching the $80,000 mark—its weakest level in over a month. Selling hit nearly all majors: ether fell 1.09% to 3% to $2,326, XRP dropped 0.68% to 3% to $1.2916, Solana declined 0.55% to 2% to $101.41 and is barely holding $100; Dogecoin, ZEC, HYPE, and BNB lost between 1% and 2%, while Tron remained the only major in the green. Jeff Mei, COO at BTSE, frames the week: all eyes are on the Fed meeting this week and investors appear to be reducing risk already, with bitcoin dropping below 80,000 being the sign of that; the Fed will likely leave rates unchanged this week, but we are watching how strongly the chair signals a December hike, which is what matters for crypto. Mei also adds the risk: given record high oil prices, escalating U.S.-Iran conflict, and inflation, the Fed could very well adopt an aggressive tone, which means higher rates and less liquidity for crypto and equities.

On the flows side, last week presented a dual picture. U.S. spot bitcoin ETFs saw $137.9 million in outflows on Friday, marking the second consecutive day of outflows and bringing the two-day total to $773.5 million, wiping out a major portion of the $1.07 billion in inflows from Monday through Wednesday. Despite this, the funds closed the week with approximately $301 million in inflows, breaking a two-week losing streak. For the month of October as a whole, they are still down $314 million; Thursday’s $635.6 million outflow was the largest of the month, pushing the monthly balance back into negative territory after turning positive mid-week. Cumulative net inflows stand at $57.6 billion, with total net assets at $100.2 billion. Ether funds saw $4.4 million in inflows on Friday but closed the week down $221 million, sitting roughly $1.18 billion in the red for October; Solana funds saw no net flows on Friday and lost $68 million on the month.

On the technical front, a monitored scenario is directly tied to today’s price action. Analyst Benjamin Cowen’s nine-step bearish 2026 roadmap has completed its first two steps: a weekly close below $83,000 and the false breakout on October 25, i.e., a reversing upward move. The next two steps depend not on price action but on calendar events: Cowen anticipates the Fed will not hike rates on October 28 and that the U.S. personal consumption expenditures (PCE) inflation data for September, to be released on October 29, will come in hot.Other steps in the roadmap include Brent rising to around $120 due to the Iran war, the 10-year Treasury yield returning to 5.3%, equities falling, and bitcoin declining in the fourth quarter—referencing a recurring pullback in the final quarter of U.S. midterm election years. The key takeaway is this: Cowen states the scenario is invalidated if bitcoin reclaims and holds above $83,000. Thus, this level has become both a technical and psychological threshold. Traders on the prediction market Myriad have also turned pessimistic: they assign a 43% probability to bitcoin dropping to $77,500 before the end of the month, compared to 32% a day prior; the probability of hitting $75,000 stands at 18%, while the chance of exceeding $87,500 dropped from 17% to 10%. Total crypto market capitalization fell to $2.79 trillion.

Second Story: Lula wins for the fourth time, Brazilian assets crash

Brazilian President Luiz Inacio Lula da Silva won an unprecedented fourth term in Sunday’s runoff election,capturing 51.8% of the vote, while Senator Flavio Bolsonaro trailed with 48.2%. The result marks a historical first: it is the first time since Brazil returned to direct elections in 1989 that a candidate who finished behind in the first round won the runoff. Bolsonaro refused to concede, announcing he will demand the annulment of the result and labeling Supreme Court Justice Cristiano Zanin’s decision to extend voting by two hours as “unacceptable.” The market reaction was severe: the Brazil equity fund traded in Tokyo plunged 15%, while the iShares MSCI Brazil fund collapsed nearly 20% in overnight trading before paring losses to 18%; this move completely erased the gains achieved when Bolsonaro led the first round. The Brazilian real has not yet traded in the Asian session.

This outcome has two dimensions for Turkish investors. First is emerging market risk premium: Brazil,alongside Turkey, holds high weight in emerging market baskets, and when outflows occur from these baskets during periods of political uncertainty, the impact spreads across the entire basket. The Bovespa closed Friday at 205,083, just 2.2% below its 52-week high, with a 10.4% monthly gain; it is expected to give back a significant portion of these gains at today’s open. Second is the global political trend: Reuters’ morning note describes the political start of the week as a bad one for right-wing politicians; alongside Lula’s victory,Aleksandar Vucic in Serbia lost to a student-led protest movement. The next test is in Israel with Benjamin Netanyahu’s Likud party; all three right-wing leaders were backed by Trump, and Trump’s own party faces its test in the midterms next week. This sequence demonstrates how sensitive markets have become to political outcomes as we head toward November 3.

Levels to Watch

• Bitcoin, 82,500 / 83,000: The base lost on October 23 and the level that would invalidate Cowen’s bearish scenario. Until both are cleared, it is difficult to call this week’s decline a mere pause; on the downside, the prediction market assigns a 43% probability to $77,500.
• Fed Decision and Warsh Press Conference, Wednesday: A 90% probability that rates remain on hold,but what matters is how strongly a December rate hike is signaled. Bank of America holds a contrary view and expects a hike this week.
• Alphabet and Microsoft Earnings, Wednesday: Coincides with the Fed decision. The focus is not on earnings themselves but on capital expenditure guidance; major cloud providers’ spending this year is expected to reach $800 billion.
• Brent, 114,51 / $120: The current level and the lower bound of the zone identified by Alfaro as the demand destruction threshold. Qatari mediation caused a pullback, but post-midterm attack expectations remain.
• Precious Metals Oversold: Gold, silver, platinum, and palladium all have relative strength indexes in the 27-31 range. A technical bounce foundation has formed, but energy-driven inflation pressure persists.
• BIST 100, 11.117: Monthly loss is 13.7%, distance from peak is 26.9%, and relative strength index is 27.3.The deterioration in emerging market risk appetite following the Brazilian election serves as an additional headwind for an already strained index.

Weekly Calendar

Date	Day	Development / Event
October 26	Monday	Germany IFO business climate survey; China Communist Party fifth plenary session continues in Beijing
October 28	Wednesday	Fed rate decision and Warsh press conference (90% probability of remaining on hold); Alphabet and Microsoft earnings; SK Hynix to announce shareholder return measures; UK Chancellor Healey presents first budget; Reserve Bank of New Zealand (hike expected) and Bank of Canada
October 29	Thursday	ECB decision (expected on hold); Amazon earnings; U.S. September PCE inflation (core expected at 3.1%) and third-quarter GDP (3.2%)
October 30	Friday	Bank of Japan decision (expected on hold, December hike priced in); Deribit monthly crypto options expiry
This week	–	One-third of S&P 500 companies report earnings; including Intel, Sandisk, Eli Lilly, Exxon, Chevron, Caterpillar, and Samsung
November 3	Tuesday	U.S. midterm elections; Trump mentioned the possibility of a new operation against Iran post-midterms
November 11	Wednesday	MSCI to announce index deletions (Strategy and Metaplanet at risk)