This Week in Markets: Wednesday 21 October 2026

In the week to Friday night the Nasdaq 100 fell 5.5% while the ASX 200 rose about 1%, and that gap is the story. American investors spent the week marking down anything priced on artificial intelligence. The chip index (SOX) fell 3.8% on Friday night alone, its eighth straight loss and its longest losing run since May 2006, leaving it more than 23% below its June record. CoreWeave, the company that rents out AI computing power and whose bonds now trade at distressed prices, fell about 25% for the week.

Then the selling reached the share floats. Korean data centre company Elice fell more than 30% on its first day of trade on Tuesday. Reuters reported that investors have discussed a valuation of about US$1.5 trillion for the coming Anthropic float, down from talk of US$2 trillion. Marcus Today counts the average US float this year down 4%, against the S&P 500 up 12%. In Australia, the ASX 200 has little AI to lose: it closed Tuesday at 8,816.9, while the bigger local news was NAB cutting 2,500 jobs.

Friday night: the worst of it. The S&P 500 fell 1.09%, the Nasdaq 2.14% and the Dow 0.34%. For the week the S&P 500 lost about 2%, the Nasdaq more than 4% and the Nasdaq 100 5.5%, while the Dow rose 0.7%. Chip makers led the falls: AMD (-6.0%), Intel (-5.8%), Micron (-5.6%) and Applied Materials (-4.8%). Oracle fell 4.6% and software 4.8%. CoreWeave fell 11.9%, with its total debt now above US$51 billion. The interest rate on the 10-year US government bond was flat at 5.08%, and Bank of America's Michael Hartnett said he had turned cautious for the next month on higher bond rates, oil and the AI share price action.

Monday night: an oversold bounce. The S&P 500 rose 0.41% to 7,690.7, the Nasdaq 1.11% and the Dow fell 36 points. The chip index rose 1.61%, ending its eight-day losing run, with Micron up 3.0% and Nvidia 1.4%. Amazon rose 5.0% and Tesla 3.8%. CoreWeave rose as much as 7.4% after Goldman Sachs upgraded it to a buy, then gave the gain back to close lower. The 10-year rate rose 7.1 basis points to 5.15% as money left bonds for shares, and Wells Fargo called it one of the weakest starts to a US earnings season on record.

Tuesday night: everything but tech. The S&P 500 rose 0.28%, the Nasdaq slipped 0.02% and the Dow rose 533 points. The equal-weight S&P 500 (every company counted the same) rose 1.15%, smaller companies (Russell 2000) 1.7% and regional banks 2.0%, while the chip index fell 0.3%. The 10-year rate fell 3.6 basis points to 5.11%. SpaceX reported third quarter revenue up 161% to US$14.6 billion, against US$12.7 billion expected, and a profit of US$4.4 billion. Anthropic disclosed a net loss of more than US$80 billion for the first half. The chance of a US rate hold on 28 October sits at about 82%. Past performance is not a reliable indicator of future performance.

Friday. The ASX 200 jumped 87 points to 8,807, up about 90 points for the week. Technology bounced, with WiseTech (WTC +9.0%) and NextDC (NXT +3.6%), and the All Tech index rose 4.4%. Miners recovered, led by BHP (+3.5%), and healthcare was strong, with CSL (+2.8%) and Pro Medicus (PME +7.4%). Banks gave back some of Thursday's gain: CBA (-1.1%) and NAB (-1.0%). Maas Group (MGH) rose 14.8% after its update. The Australian 10-year bond rate held at 5.22%.

Monday. The index rose another 39 points to 8,846. Takeovers set the tone: Challenger (CGF) rose 19.3% on an approach from Japanese insurer TAL, Cromwell (CWY) 20.2% on a scheme with EQT, and Ingenia (INA) 7.1%. CBA rose 0.7%. Technology fell again, with Xero (XRO -2.4%), and NextDC went into a trading halt over power supply to a Melbourne data centre. Woodside (WDS) rose 2.7% with oil near US$110. Reserve Bank assistant governor Chris Kent said the jobs market is loosening faster than the bank predicted.

Tuesday. The index fell 28.8 points (0.33%) to 8,816.9, with 115 companies down and 69 up. BHP fell 1.6% after its copper production dropped 19% on the previous quarter to 401,000 tonnes and iron ore output of 66.5 million tonnes missed the 68.0 million expected. NAB fell 1.8% after announcing 2,500 job cuts, 6% of its staff, with a $300 million restructuring charge and 1,500 roles gone by the end of December. Westpac (WBC -0.8%) booked a $41 million legal cost. Defensive shares carried the day: consumer staples rose 1.14%, with Coles (COL +1.8%) and Woolworths (WOW +1.1%), and Cochlear (COH) rose 5.2%. HUB24 (HUB +3.9%) lifted funds under administration to $168 billion from $164 billion. The Australian dollar finished near 69.8 US cents.

Oil stayed high. Brent crude rose 3.7% to US$109.86 on Friday night, its highest since May, as attacks on shipping in the Strait of Hormuz continued and Ukraine said it would keep striking Russian refineries. It eased to US$109.40 on Monday night and about US$108.90 on Tuesday night on reports of progress in US and Iran talks, which another diplomat disputed. US oil (WTI) fell back below US$100, to US$98.40, on Monday night.

Metals were soft. Gold rose 0.3% to US$4,159.50 on Friday night, then fell 0.49% to US$4,139 on Monday night as US bond rates rose. Copper fell over the week as a strike at a large Chilean mine ended. The Australian dollar rose to about 69.4 US cents on Friday night and 69.8 by Tuesday. The Australian 10-year bond rate reached 5.29% on Monday night.

The float window is closing for AI. Firmus pulled its $44 billion ASX float on 9 October after super funds and fund managers declined to bid. Since then Blackstone-owned AirTrunk has postponed a US$1.5 billion raise, the target valuation for UK data centre company Nscale has fallen from US$30 billion to between US$16 billion and US$19 billion after Microsoft walked away as its anchor tenant, and Elice fell more than 30% on debut. The common thread: bond rates above 5% and buyers who will not pay up for data centres funded by debt and not yet earning revenue.

Australia's counterweight is cost cutting. NAB's 2,500 job cuts are its biggest restructure since 2019 and follow ANZ's 3,500 last year. With the big bank results starting with Westpac on 2 November, cost guidance will matter as much as profit. Takeover activity is the other local theme: Challenger, Cromwell and Ingenia all moved on bids or approaches on Monday.

Iran escalated its attacks on shipping in the Strait of Hormuz in the week to Friday, and Saudi Arabia postponed its "Davos in the Desert" investment conference to 2027 after Houthi attacks. By Tuesday night reports said Pakistan and Qatar had delivered a US and Iran peace proposal. French government bonds sold off after a weekend of violent unrest, with the French 10-year rate up 14 basis points on Monday night. China's economy grew 4.5% on the year in the September quarter, up from 4.3%, and China cut its holdings of US government bonds to an 18-year low in August.

Wednesday night 21 October. Meta, Tesla and Lam Research report. Meta's spending on AI is forecast at US$40.8 billion for the quarter.

Wednesday 28 October. Australian inflation for the September quarter, the last big reading before the Reserve Bank meets, and the US central bank's decision, with a hold priced at about 82%.

Monday 2 November. Westpac's full-year result. NAB follows on Thursday 5 November.

Tuesday 3 November. The Reserve Bank's next decision, on the same day as the US midterm elections. The cash rate is 4.60%.