Market snapshot: spiralling spend, tumbling tech

After a week to forget for some of the world's largest companies, ii's head of markets rounds up the action and looks at what might happen in the coming days.

19th October 2026 08:34

by Richard Hunter from interactive investor

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Technology shares tumbled at the end of last week as concerns about the level of AI buildout borrowing ratcheted up once more.

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The VanEck Semiconductor ETF GBP (LSE:SMGB) slid by 3%, taking its weekly drop to 10% in what was the largest decline in 18 months. Falls of around 6% landed on Intel Corp (NASDAQ:INTC), Micron Technology Inc (NASDAQ:MU) and Advanced Micro Devices Inc (NASDAQ:AMD), Broadcom Inc (NASDAQ:AVGO) dipped by 4.5%, while “neocloud” company CoreWeave Inc Ordinary Shares - Class A (NASDAQ:CRWV) extended its weekly loss to 25% after a 12% slide on Friday.

The AI buildout has brought a substantial demand for investment capital, which continually raises the bar for expectations on the scale and timing of any returns. At the same time, competition for capital has intensified with government borrowing requirements and the associated lofty yields providing investors with a quandary. These factors are further exacerbated by the perceived pace of development in China, which in turn could rival its US counterparts on the pricing front.

For the most part, the hyperscalers have been relatively shielded from some of the declines given the strength of their balance sheets. Meta Platforms Inc Class A (NASDAQ:META), however, succumbed to a near 4% decline ahead of its latest earnings report on Wednesday. The tech sector is expected to report 65% earnings growth this quarter and for Meta this would translate to $62.5 billion of earnings simply to hit the middle point of its own guidance range. In addition, any upgrade to its forecast capex spend of between $130 billion and $145 billion could well put further pressure on the stock – and indeed the sector – as investors become increasingly unnerved by spiralling spends.

Persistent tensions in both the Middle East and between Russia and Ukraine also kept the oil price elevated, with a slight overnight decline nonetheless leaving the commodity priced at $108 per barrel, 50% higher than at the beginning of the US/Iran conflict. Despite last week’s hotter-than-expected inflation releases at both consumer and producer levels, the market is still of the opinion that interest rates will be unchanged this month but then rise in December, with current odds for those two outcomes of 82% and 75% respectively.

Apart from Meta, investors will be kept busy this week with updates from fellow Magnificent Seven member Tesla Inc (NASDAQ:TSLA), while elsewhere companies such as Netflix Inc (NASDAQ:NFLX), Ford Motor Co (NYSE:F), General Motors Co (NYSE:GM), American Express Co (NYSE:AXP), International Business Machines Corp (NYSE:IBM) and AT&T Inc (NYSE:T) will report amid another important week where expectations are high.

In the meantime, and despite a week in which the Nasdaq lost more than 4%, the tech-heavy index remains ahead by 12.5% so far this year, with some positive signs of bargain hunters entering the fray as Dow futures pointing to a 1.3% rebound at the open. Elsewhere, the Dow Jones and S&P500 have also maintained their progress on the whole, with gains of 8.2% and 11.9% respectively in the year to date.

The UK's oil majors rose slightly in their first opportunity to react to a higher price, despite the overnight weakness, with BP (LSE:BP.) receiving the additional benefit of a broker upgrade. However, meaningful gains were few and far between in the FTSE100, which was outweighed by a broad markdown of stocks, including some technical weakness from companies undertaking share buybacks, such as Barclays (LSE:BARC), 3i Group Ord (LSE:III) and InterContinental Hotels Group (LSE:IHG).

The lack of buying interest in early trade was in contrast to an otherwise resilient performance from the primary index, which has received renewed attention as something of a haven destination over recent trading sessions. The perceived stability of the index has attracted global investors to shelter from the tech tempest, and the FTSE100 has added 9.2% so far this year despite a weaker open. It is also just 0.7% away from the record high set in February, which could yet be breached if the current conditions elsewhere persist.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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