ThinkEquity Morning Briefing | 10-26-2026| Nasdaq at Key Level as Big Tech Earnings Loom
Morning Brief

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(Bloomberg) -- Stock futures are edging higher ahead of a huge week for tech earnings and central bank decisions. For today, a shock win for Luiz Inácio Lula da Silva in Brazil's election will dominate the narrative, with Brazil-linked stocks slumping in premarket trading.

S&P 500 futures were 0.3% higher as of 5:25 a.m. in New York, while Nasdaq 100 contracts were also up 0.3%. Traders are bracing for steep losses across US-listed Brazilian stocks after Lula defeated market favorite Flávio Bolsonaro: An ETF tracking the country's equities sank 27%, while US-listed Brazilian banks, Vale and Petrobras are also under pressure in premarket trading.

The AI trade is also still top of mind. The Nasdaq is at a key technical level after a second week in the red, and will be tested this week when tech firms worth more than $10 trillion combined — including Microsoft, Amazon and Alphabet — report earnings. The index is hovering around 29,000 after a failed breakout sent it back toward the lower end of its six-month range. A loss of recent lows would put the broader uptrend under pressure and expose the 200-DMA near 27,800, about 3.5% below current levels.

Investor concerns about financing the AI buildout (and returns on that investment) have intensified. Meta's raised capex guidance alarmed some, as consensus is now modeling about $140 billion in spending — pushing that metric above operating cash flow. Concerns are spilling into credit, with Meta's five-year CDS spread roughly doubling since August to around 120 basis points. Today's Tech Watch explores how the CoreWeave rout is a warning sign to the rest of the market.

One potential cushion is positioning. Deutsche Bank strategists note tech exposure has slid to the lowest level in six months and is now close to Iran war lows, even as fund flows remained strong. Investors poured about $30 billion into tech funds over the past two weeks, including $12 billion into leveraged ETFs. That dip-buying showed signs of cracking last Thursday, however, when the selloff triggered about $1.5 billion of outflows.

Today's earnings lineup includes Verizon, Cincinnati Financial and Welltower. For Welltower, BI says its senior-housing operating portfolio remains the key earnings driver, underpinning peer-leading growth targets for 2H even as same-store net operating income growth may moderate against tougher comparisons.

In geopolitics, Trump said it's "getting to be decision time" on whether he will make a deal with Tehran or resume attacks as Iranian and Houthi threats against Americans in the Middle East continue to grow. Kevin Hassett, meanwhile, said US-Canada trade negotiations are "gathering steam," two days after the Trump administration modified Canadian tariffs to benefit some Maine businesses.

In deals, Challenger Limited's board rejected a $4.4 billion offer from Daiichi Life Group, saying it intends to engage with the Japanese insurer's Australian unit to see whether a proposal can be reached that the board can recommend.

In strategy, HSBC's long-standing equity bull Max Kettner is dialing back risk, cutting his maximum overweight in stocks and moving tactically neutral. He cited stretched fixed-income underperformance, AI-policy risks and renewed Middle East as near-term concerns and flagged hyperscaler free cash flow, oil and a potential turn in Fed hawkishness among key swing factors heading into 2027.

In other corporate news:

• Amex to Slash 5% of Headcount as Transaction Volumes Fall Short
• Griffin's Citadel Securities Takes Bigger Office in India Push
• J&J Drug Phase 1 Data Show 75% Tumor Response in Prostate Cancer

Earnings: Almost a fifth of the S&P 500's market cap has reported so far this earnings season. About 80% of companies have beaten earnings estimates, while 12.5% have missed. On sales, 54% have topped expectations and 23% have fallen short.Economy: The Fed and its peers in the euro zone and Japan are set to meet this week, with Bloomberg Economics noting they will all "probably keep interest rates steady," opting to "bide their time before potential further hikes." Three days of decisions starting on Wednesday in Washington are "likely to affirm a hawkish stance balanced by a measured pace."

Equity Insights

• Retail trading activity in US equities showed "a modest increase" in the past two weeks after declining in recent months, according to data from Goldman Sachs strategists.

Sectors in focus:

US-listed shares of Brazilian companies and those exposed to the country slump in premarket trading.

• Among lenders: Banco Bradesco -27%; Itau Unibanco -28%; NU Holdings -22%; Inter & Co. -32%; Banco Santander (Brasil) -11%

• Other financial firms: PagSeguro Digital -28%, StoneCo -31%, PicS -27%
• Steel, metal and mining stocks also sink: Companhia Siderurgica Nacional -13%; Vale -7.7%; Gerdau -14%
• Among other movers: XP -39%; Ambev -19%; Embraer -2.6%; MercadoLibre -2.6%; Telefonica Brasil -16%; Companhia Energetica de Minas Gerais -15%; Companhia Paranaense de Energia -17%; Petroleo Brasileiro -19%; Ultrapar Participacoes -18%; Cia de Saneamento Basico do Estado de Sao Paulo (SABESP) -22%; TIM S.A. -17%

US Premarket Movers of Note:

• BORR US (-10%): Borr Drilling Stock Retreats as Five Personnel Still Missing
• ROST US (+2.7%): Ross Stores Raised to Buy at UBS; PT $315

M&A:

• Bon Secours Mercy Health is in late-stage talks to buy a majority stake in Surgery Partners in a deal that would value the Bain Capital-backed surgical care provider at roughly $6 billion, including $3.5 billion in debt, the FT reported.
• Instacart is in talks to sell itself, the Information reported, citing people familiar with the matter.

ECM:

• Windward Bio Group filed for a US IPO to help fund trials of its antibody drugs to treat serious respiratory and skin diseases.
• Opay, a Nigeria-focused payments platform, is seeking to raise up to $336 million in a US IPO.

Macro: 

• The European Union is planning to use safeguard measures to cut imports of products from sectors including chemicals, furniture and machinery from China, according to people familiar with the matter.
• UK PM Andy Burnham said he wanted the UK to rejoin the EU during his lifetime, as he called for an "honest" discussion about the impact of Brexit.
• Serbia's eurobonds and dollar-denominated notes gained after longtime leader Aleksandar Vucic conceded defeat in a snap election.
• Iranian President Masoud Pezeshkian is due to travel to Moscow later on Monday to attend a summit of gas-exporting countries, semi-official Tasnim reports.

Europe/Asia:

• Europe Trading: European stocks ticked higher with cyclicals leading and defensives lagging, a reversal of recent performance, as investors looked ahead to a busy week for earnings. Stoxx 600 index heavyweights HSBC and Shell are among those reporting.
• Asia Trading: Stocks in Asia fell, with weakness in technology shares in mainland China and Korea persisting as investors looked for more cues on the progress of the AI buildout.
  • The MSCI Asia Pacific Index slipped as much as 0.2%, with Samsung Electronics among the heaviest drags. The Kospi dropped more than 1%. Hong Kong equities bucked the trend, lifted by energy companies

ECO CALENDAR (All times ET):

• 8:30 am: United States Sep Chicago Fed Nat Activity Index, est. -0.1, prior -0.04
• 10:30 am: United States Oct Dallas Fed Manf. Activity, est. 8.8, prior 9.8

Main Rating Changes:

Upgrades:

• BAH US: Booz Allen Raised to Buy at TD Cowen; PT $95
• CACI US: CACI Raised to Buy at Jefferies; PT $725
• CNOB US: ConnectOne Banc Raised to Outperform at Raymond James; PT $37
• EFSC US: Enterprise Financial Raised to Overweight at Piper Sandler
• KALU US: Kaiser Aluminum Raised to Neutral at JPMorgan; PT $140
• LMT US: Lockheed Raised to Overweight at Morgan Stanley; PT $835
• PG US: P&G Raised to Buy at Freedom Capital; PT $176
• ROST US: Ross Stores Raised to Buy at UBS; PT $315
• TSLA US: Tesla Raised to Overweight at Barclays; PT $450
• TCBK US: TriCo Bancshares Raised to Overweight at Piper Sandler

Downgrades:

• AAP US: Advance Auto Cut to Sell at Rothschild & Co Redburn; PT $32
• XYZ US: Block Cut to Equal-Weight at Morgan Stanley; PT $80
• CRS US: Carpenter Tech Cut to Sector Weight at KeyBanc
• EFX US: Equifax Cut to Sector Perform at RBC; PT $189
• FCNCA US: First Citizens Cut to Underweight at JPMorgan; PT $2,200
• FND US: Floor & Decor Cut to Hold at Stifel; PT $52
• LKQ US: LKQ Cut to Neutral at Roth Capital Partners; PT $18
• NFLX US: Netflix Cut to Hold at Huatai Research; PT $69.07
• SPOT US: Spotify Cut to Accumulate at Phillip Secs; PT $650
• VLO US: Valero Energy Slips After Cut to Sell at Freedom Capital

Initiations:

• LEU US: Centrus Energy Rated New Hold at TD Cowen; PT $120
• FE US: FirstEnergy Rated New Outperform at BMO; PT $50
• LTH US: Life Time Rated New Overweight at Barclays; PT $51
• NTAP US: NetApp Reinstated Neutral at Guggenheim
• NTNX US: Nutanix Rated New Buy at Guggenheim; PT $100
• OKLO US: Oklo Rated New Hold at TD Cowen; PT $26