Nasdaq Jumps 1.1% as SpaceX and Chip Stocks Lead a Third Straight Gain

The leadership flipped in a day. After two sessions run by the Dow, small caps and almost everything except the mega-caps, Wednesday belonged to the Nasdaq again — and to the two Musk companies at the center of the AI trade.

The Nasdaq Composite rose 1.05 percent to close at 26,702.86 on Wednesday, October 21, 2026, the S&P 500 rose 0.58 percent to 7,757.17, and the Dow Jones Industrial Average rose 0.69 percent to 52,856.09. The Russell 2000 rose 0.27 percent to 2,781.03, the smallest gain among the major indexes a day after it led them. The S&P 500's gain was its third straight, technology led the index's sectors with a 1.67 percent rise as seven of the eleven sectors closed higher, and the CBOE Volatility Index fell 3.06 percent to 16.78.

SpaceX and Super Micro put the AI trade back in charge

SpaceX rose 7.79 percent to close at $159.31 and lead the Nasdaq 100, a day after the rocket, AI and connectivity company posted its first profit as a public company, with third-quarter revenue up 161 percent to $14.58 billion, and chief executive Elon Musk told its earnings call that SpaceX and Tesla have formed special committees to review a possible merger. Super Micro Computer rose 9.55 percent after the AI server maker lifted its preliminary first-quarter revenue range to between $18.5 billion and $19.5 billion, well above its own prior guidance. The chip complex followed: the iShares Semiconductor ETF advanced 2 percent and the Roundhill Memory ETF rose 3 percent, Nvidia rose 2.43 percent, and reports that Anthropic has locked in more than $600 billion of compute contracts kept the spending side of the AI story in front of investors. Tesla rose 3.41 percent to $386.47 ahead of its own results, due after Wednesday's close.

Beats were punished as often as they were paid

The day's other lesson was how little a beat was worth on its own. AT&T fell 6.45 percent to $21.91 and paced the S&P 500's decliners even though adjusted earnings of $0.65 a share topped the $0.60 consensus: investors focused on softer core wireless-subscriber numbers and rising expenses, and the reported figure was cut to $0.13 by a $2.6 billion charge on the held-for-sale Mexico business. Netflix fell 5.31 percent to $65.04 after its fourth-quarter forecast disappointed, Abbott Laboratories declined 2 percent after holding its profit guidance but trimming its sales-growth target, and Philip Morris pulled back 1.5 percent. The winners were quieter: United Airlines jumped 4 percent and Thermo Fisher Scientific gained 1 percent on their results, while IBM rose 3.94 percent and Meta Platforms edged up 0.47 percent in positioning ahead of their own reports after the bell. Communication services was the S&P 500's worst sector, down 1.11 percent, with Netflix's slide doing much of the work.

Yields backed up through a soft auction, and crude slipped anyway

The bond market offered no help. The 10-year Treasury yield rose 3 basis points to 5.15 percent, and the Treasury's $13 billion 20-year reopening stopped at 5.469 percent, 0.9 basis point above the when-issued level — a tail that said demand for long duration is still thin at these levels, even as direct bidders stepped up and total demand ran above average. Crude inventories fell 3.1 million barrels in the week ended October 16, a third straight draw and a bigger fall than expected, with gasoline down 3.0 million barrels and distillates posting a surprise 1.7 million barrel build. Oil slipped regardless: West Texas Intermediate's December contract settled at $97.15 a barrel, down 0.7 percent in its first session as the front month, and Brent's December contract settled 3 cents higher at $108.82, as traders weighed continued threats to shipping through the Strait of Hormuz against export flows that have already surpassed prewar levels. Federal Reserve officials are in their pre-meeting blackout before the October 27-28 meeting, with market pricing putting the chance of a hold at about 85 percent.

Tonight's verdicts will test the rebound

The rebound now has to survive the heaviest earnings night of the week. Tesla, Meta Platforms, IBM, Texas Instruments and Lam Research were all due to report after Wednesday's close, with Meta's AI capital-spending plans and Tesla's margins — and any update on the SpaceX committees — the numbers most likely to move Thursday's open. Initial jobless claims follow on Thursday morning and the flash purchasing managers' surveys on Friday, before the Fed decides on October 28. Two days of broadening, then a day of mega-cap leadership, have repaired much of last week's damage; tonight's prints decide whether the AI trade leads again or merely interrupted the rotation.