U.S. Futures & World Markets

Tech stocks are higher premarket as they look to bounce back from their worst week since June. That's helping lead the Nasdaq and S&P higher, while the Dow lags. Not a surprise to see this rebound attempt after the Philly Semiconductor Index closed lower for eight straight trading sessions.

Keep an eye on the VIX — it finally ticked above its long-run average of 19.50 and traded at its highest level in four months. Is this the start of a more volatile tape or just a temporary spike? Remember, the VIX rarely trades around 19.0. It typically sits lower or higher.

Earnings season kicks into high gear this week with Meta, Tesla, and others all reporting. Let's see if we can actually focus on corporate earnings for a bit rather than the whipsaw AI headlines. One week AI is going to wipe out humanity; the next week we're worried the bond market is pushing back on tech financing. It's exhausting. On the bright side, it's encouraging to see the bond market doing what it's supposed to do — push back on borrowing that may not pay off. Even the AI trade has to answer to the bond market.

S&P Futures vs. Fair Value: +34.00  |  10-Year Yield: 5.09%

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Charts & Data

After growing substantially throughout H1, AI-linked debt issuance has fallen off since its June peak — September issuance was barely half of what was issued in August. Moses Sternstein, a16z via Daily Chartbook.

Rates for bonds linked to the tech sector have meaningfully diverged from the broader universe of corporate issuance, beginning roughly in September 2025 when capex borrowing began to take off. Moses Sternstein, a16z via Daily Chartbook.

Vanda's aggregate positioning indicator has gone nowhere since the summer, with hedge fund exposure rolling over and institutional options buying losing momentum. Vanda via Daily Chartbook.

Traders looking for protection in the event of a vol spike was a leading indicator around the market's recent bother. The 5-session VIX put/call ratio hit multi-year lows on October 8, just a couple sessions removed from the S&P 500's record close. Luke Kawa, Sherwood via Daily Chartbook.

The VIX closed above its long-term average (19.5) for the first time since late July. Daily Chartbook.

The number of stocks meeting all four bullish trend conditions has moved back above the number meeting none. The bulls have regained the lead — just barely. Grant Hawkridge, The Daily Number via Daily Chartbook.

Investors are beginning to look for opportunities outside AI. The correlation between AI and SPXXAI is reverting back lower. Goldman via Daily Chartbook.

The percentage of semiconductor stocks trading above their 50-day moving average plunged from above 90% to below 25% in just eight sessions. This has happened only three other times: July 2024, May 2010 during the Flash Crash, and November 1973 during the 1973-74 bear market. Dean Christians, Turning Point Market Research via Daily Chartbook.

Options markets are pricing in an average move of 5.4% for S&P 500 stocks after earnings reports this quarter. Goldman via Daily Chartbook.

The Mag 7 are expected to outpace the Other 493 in EPS growth again in Q3, but most of the gap can be traced to Nvidia and Meta. John Butters, FactSet via Daily Chartbook.

Looking ahead to Q4, analysts anticipate the Other 493 will outgrow the Mag 7 for the first time since Q4 2022. John Butters, FactSet via Daily Chartbook.

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