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Nasdaq 100 futures rose about 1.3% Monday after a 5.5% weekly drop as investors bought the dip ahead of Meta, Tesla and Netflix earnings in a packed week.
- Nasdaq 100 futures gained about 1.3% on Monday, October 19, after a 5.5% weekly slide.
- S&P 500 futures rose roughly 0.2% to 0.6% and Dow futures about 0.2%.
- AI credit stress drove last week's rout; Big Tech earnings are the next test.
Lead
US stock futures bounced early Monday as investors stepped into the technology selloff. Nasdaq 100 futures, the contract behind the Nasdaq QQQ exchange-traded fund (QQQ), rose about 1.3% to near 29,730 after a 5.5% weekly decline. S&P 500 futures climbed to about 7,750, and Dow industrial futures added 0.16% to roughly 52,300. The rebound came before one of the busiest corporate earnings weeks of the year.
What Happened in Markets Last Week?
Last week was the worst for the Nasdaq Composite since the spring. The index fell 4.5% and ended a four-week winning streak. The S&P 500 lost nearly 2%, its largest weekly drop since late June.
The pressure came from credit, not earnings. Spreads on debt tied to AI infrastructure widened to their highest levels of the year, particularly among large cloud and data center spenders. CoreWeave (CRWV), a data center operator financed heavily with debt, fell about 25% on the week. Its credit default swaps, which price the cost of insuring against default, moved to distressed levels. The episode raised questions about how sustainable borrowing to fund AI capacity is when valuations are already elevated.
Why Are Investors Buying the Dip Now?
Investors are buying because the credit scare has not yet shown up in company results, and rate fears have eased. Futures pricing shows an 85.1% probability that the federal reserve holds rates steady this month. That compares with 42.4% a month ago, when the chance of a move was far higher. Lower odds of tightening reduce one source of pressure on long-duration growth stocks.
Positioning is cautious despite the bounce. Traders have bought protective puts at elevated rates ahead of the Meta and Tesla reports, which signals demand for downside cover even as futures rise. Technical levels are in focus: the Nasdaq 100 sits near its 50-day moving average of about 30,175, with support around 29,053 and resistance near 31,616.
What Earnings Are Due This Week?
Tesla, Meta, Netflix, American Express and GE Aerospace headline the calendar, with roughly 70 companies reporting. Meta Platforms (META) is due Wednesday, October 21, after the close. Consensus calls for revenue growth of about 23.6% to $63.35 billion and earnings of $5.94 per share. Meta has beaten estimates about 88% of the time, but its stock fell nearly 8% after a revenue miss last quarter.
Tesla (TSLA) and Netflix (NFLX) report alongside, with American Express (AXP) and GE Aerospace (GE) rounding out the week. The heaviest AI spending disclosures come next. Microsoft (MSFT) and Alphabet (GOOGL) are due October 28, Amazon (AMZN) follows October 29, and Apple (AAPL) closes the cycle a few days later.Why Does AI Credit Matter for the Dollar and Equities?
AI enthusiasm has supported the US dollar, so a reversal in sentiment would transmit beyond equities. Currency strategists note that the dollar is more exposed if confidence in AI deteriorates. The same channel links credit spreads, capital expenditure plans and index valuations. Heavy capex guidance from Meta and the other hyperscalers will test whether markets treat spending as growth or as a financing burden.
Outlook
The Monday bounce recovers part of a sharp weekly loss but leaves the Nasdaq 100 below recent highs. Meta's results on October 21 set the first read on AI spending and returns. The following week's reports from Microsoft, Alphabet and Amazon will show whether credit stress is spreading to corporate budgets. Rate expectations are steadier, which leaves earnings and AI credit spreads as the main drivers.
