The tape flipped. After a brutal week that saw the Nasdaq shed 4.5%—its steepest drop since June—futures on the tech-heavy index spiked by nearly 250 points in early Sunday trading. The Dow Jones Industrial Average futures climbed around 150 points, while the S&P 500 firmed up by 20 to 25 points. It’s a quick correction, but one that comes with a heavy cloud of caution hanging over the sector.
The driver for last week’s sell-off wasn’t just sentiment; it was balance sheet stress. CoreWeave shares nosedived 25% as yields on its debt spiked to levels typically associated with financial distress. This isn’t an isolated incident. Goldman Sachs flagged that AI credit spreads and those for hyperscalers are at their widest point of the year. For context, when these spreads hit similar peaks in the past, underlying equities have fallen by 15%.
Valuation anxiety is the subtext here. Anthropic reported Q3 revenue of $16.8 billion, a jump from $11.6 billion the prior quarter. On paper, that’s growth. But traders are asking if that pace justifies the current price tags. The market is punishing uncertainty, and the widening credit spreads suggest lenders are starting to price in that risk.
Macro headwinds persist. Brent crude tapped $110 a barrel last week, its first breach of that threshold since May, driven by ongoing energy infrastructure strikes between Russia and Ukraine. Prices have stabilized around $108-$109 this morning, but long-dated futures are already pricing in disruptions that could last into 2027. The US 10-year Treasury yield is hovering near 5.1%, keeping the cost of capital elevated.
This week is a gauntlet. There’s no major macro data drop until the University of Michigan consumer sentiment survey on Friday, but the earnings calendar is dense. GE Aerospace, 3M, General Motors, and Netflix report Tuesday. Meta, Tesla, IBM, and Texas Instruments hit the tape Wednesday. Western Digital, Lockheed Martin, Blackstone, and P&G follow on Thursday, with American Express closing out the week on Friday. With Fed officials in blackout ahead of the October 28 policy meeting, these earnings reports are the primary catalyst traders will watch.