Market Quick Take - SpaceX and Tesla merger on the cards? - 21 October 2026

Market drivers and catalysts

• Macro: US private payrolls growth slowed and pending home sales slid to a record low
• Equities: US equities ended mixed as earnings supported sentiment, Europe slipped on AI concerns and French risks, Asia rebounded sharply.
• Volatility: Index gauges unwound at the short end of the volatility curve while crude vol firmed
• Digital Assets: Listed crypto shares advanced while the tokens themselves drifted modestly lower
• Commodities: Oil holds near USD 110 as supply risks persist, gold struggles and wheat slumps
• Fixed Income: US treasury yields sideways. Germany-France yield spread widens again.
• Currencies: USD slightly weaker in tepid trading range. GBP surge versus weak EUR continues.

Macro

• ADP Weekly Payrolls showed US private payrolls rising an average of 18,500 per week in the four weeks to 3 October, a pace cited as consistent with a modestly softening labour market. US pending home sales fell 7.3% month on month in September to a record low, far worse than the 0.5% decline expected, with surging mortgage rates cited as weighing on affordability across every region. September CPI stood at 3.7% year on year.
• In the UK, the unemployment rate fell to 4.7% in the three months to August, beating expectations of 4.9% and the lowest since mid-2025, with the employment rate rising to 75.3%.
• In Asia, Japan's exports rose 16.7% year on year in September, below the 20.1% consensus and the softest growth in thirteen months, despite strong demand for AI-related chips and semiconductors. Bank of Japan Governor Kazuo Ueda said underlying inflation is nearing the 2% target amid a moderate recovery and a tight labour market, citing higher Middle Eastern energy costs and strong AI-related demand. Pakistan's army chief met senior Iranian officials in Tehran, though a diplomat denied an imminent agreement while confirming negotiations continue.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

• 0600 – UK Sept CPI
• 0600 – UK Sept PSNB
• 1100 – US MBA Mortgage Applications
• 1430 – EIAs weekly petroleum inventory report
• 1700 – US Treasury to auction 20-year notes

Earnings events

• Today: Meta, Tesla, Lam Research, Philip Morris, SAP, Thermo Fisher Scientific, Texas Instruments, IBM, Abbott Laboratories, NextEra Energy, AT&T, Iberdrola, Danaher
• Thursday: Procter & Gamble, Gilead Sciences, Union Pacific, Western Digital, Valero Energy, Blackstone, Newmont, Lockheed Martin, Spotify, Atlas Copco
• Friday: ExxonMobil, American Express, Eni S.p.A, SLB

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• USA: The Dow gained 1% and the S&P 500 rose 0.3% on Tuesday, while the Nasdaq 100 slipped 0.1%, as solid earnings offset concerns about financing AI investments. Equifax surged 11.3% after stronger-than-expected results, while Eli Lilly climbed 3.5% amid strength in healthcare. General Motors fell 6.8% as its outlook highlighted rising costs. After the close, SpaceX jumped around 9% after reporting $4.4 billion in quarterly profit, while Tesla gained almost 2% after Elon Musk described a potential merger between the two companies as a "good idea", with independent committees exploring the possibility. Super Micro Computer also jumped 15.5% after preliminary sales exceeded expectations, improving sentiment ahead of further technology earnings.
• Europe: The Stoxx 600 edged down 0.1%, the FTSE 100 fell 0.3%, and Germany's DAX slipped 0.1% on Tuesday, as renewed concerns about AI investments and France's public finances weighed on sentiment. ASML declined 2.7% amid pressure on chipmakers, while Schneider Electric fell 3.3% after raising €6 billion in new equity to help fund its $22.6 billion acquisition of US industrial software company PTC. Swiss industrial group ABB also declined despite record orders, highlighting growing investor caution towards companies exposed to data-centre spending. Roche offered some support, gaining 2.6% following a major cancer-drug partnership, helping Switzerland's SMI rise 0.8% even as French equities remained under pressure.
• Asia: Asian equities rebounded on Wednesday, with South Korea's Kospi gaining 3% around midday and Japan's Nikkei 225 rising 1%, as strong US earnings helped ease concerns about AI spending. Samsung Electronics and SK Hynix recovered after falling 3.0% and 4.2%, respectively, on Tuesday, when financing concerns surrounding AI projects weighed heavily on Korean technology shares. The volatile backdrop was also evident in AI cloud company Elice, which rebounded sharply after plunging on its stock-market debut, while stronger Japanese exports provided additional support. Despite the recovery, investors remained focused on whether upcoming earnings could justify the technology sector's heavy spending and elevated valuations.

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Volatility

VIX 17.31 | VIX FUTURES: 18.350 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (160.40) | MARKET REGIME: TRANSITIONING | AS OF ~06:00 CET

• VIX fell 6.1% to 17.31 as front-end hedges unwound alongside easing concerns over AI-related credit. VIX9D dropped 9.3% to 16.27 and VIX1D 6.1% to 11.20, while VVIX fell 9.2% to 97.15, reversing last week's scramble for upside VIX calls. The front VIX future eased 0.75% to 18.350 on its settlement day. The cash curve held contango, SKEW stayed elevated at 160.40 and MOVE edged up to 101.71, leaving rates vol steady against the equity unwind.
• Crude vol rose, OVX up 3.8% to 52.11. SPX options imply a 41.15 point move, 0.534%, for today's expiry and 73.80 points, 0.957%, into Friday, with Tesla and Meta reporting.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~82,659 -0.32% | ETHEREUM ~2,443 -0.14% | IBIT 46.71 +0.89% | ETHA 55.07 +1.77% | AS OF ~06:00 CET

• Listed crypto equities moved ahead of the tokens. Strategy rose 4.9%, Circle 5.5% and Coinbase 1.4%, while miners were mixed, Marathon up 1.4% against Iren 4.0% lower and Riot 1.4% lower. Deribit's DVOL edged up 0.8% to 37.16. BlackRock's IBIT absorbed $665.2 million Monday, its largest session since October 2025, lifting the US spot bitcoin complex to $526.6 million net while Fidelity and Grayscale redeemed, leaving one allocator to set the category sign. Spot ether ETFs lost $103.3 million, a 14th negative session in 15.
• J.P. Morgan Asset Management included bitcoin in its annual Long-Term Capital Market Assumptions for the first time, projecting a 10% compounded annual return over ten years at 55% volatility, against 5.5% for gold. Its authors said unstable correlations remain an obstacle to wider portfolio inclusion.

Commodities

• Oil: Brent trades near USD 110 for a third consecutive day after swinging within a six-dollar range on Tuesday following inaccurate reports of an imminent US-Iran agreement. Instead, continued attacks on ships around the Strait of Hormuz threaten supply while driving up freight and insurance costs. Together, these factors are keeping refined-product prices elevated, with distillates near USD 200 per barrel and Morgan Stanley warning that fuel tightness could persist through mid-2027. Meanwhile, Vortexa estimates that around 9 mb/d of crude has left the Gulf so far this month, well below levels implied by the US government. Ahead of today's EIA petroleum inventory report, the API reported a 4.9-million-barrel decline in US crude stockpiles.
• Metals: Gold drifted back towards USD 4,100 on Tuesday before recovering to trade around USD 4,126 this morning. Elevated energy prices continue to cloud the interest-rate outlook, with traders pricing in three 25-basis-point rate hikes by next July. Overall, bullion remains confined to a relatively narrow range, caught between macroeconomic headwinds and continued demand from investors seeking protection against fiscal and geopolitical risks. Key resistance remains around USD 4,230, while support continues to emerge below USD 4,100.
• Agriculture: Wheat futures slumped to their lowest level since mid-August, trading near USD 6.40 per bushel, down 20% from the three-year high reached last month. Prices have come under pressure amid hopes that an agreement to ease tensions in the Black Sea region could unlock substantial quantities of wheat from Russia and Ukraine currently awaiting export. The prospect of additional supplies comes at a time when Southern Hemisphere harvests are adding further pressure to an already weakening market.

More in our Commodity News, Analysis & Commentary

Fixed Income

• US Treasury yields were little changed Tuesday and into early Wednesday, with the benchmark US 2-year treasury yield treading water near 4.88% and the 10-year treasury yield near 5.12% after a choppy session with wide swings in risk sentiment and oil prices. The US Treasury is set to auction 20-year notes later today. The US Treasury has controversially proposed ending the issuance of 20-year notes.
• The Germany-France sovereign yield spreads widened again Tuesday, with the 10-year spread ending the day at its widest daily close for the cycle, up five basis points to 153 basis points total.
• US high yield spreads widened on Tuesday, with the Bloomberg measure of the spread between high yield corporate bonds and US treasuries three basis points wider at 332 basis points. This is the highest level posted since the end of March, which saw a local cycle high of 335 basis points. SpaceX CDS prices, a measure of the cost to insure against a default on SpaceX corporate bonds, rose more than seven basis points to end the day near 234 basis points.

Currencies

• The US dollar traded largely sideways on Tuesday, firming slightly against a weak Euro and ending the day slightly lower versus other currencies. USDJPY remains tightly rangebound just above the 158.00 level early Wednesday, while AUDUSD edged back above 0.7000 Tuesday, peaking at 0.7030 early Wednesday before dropping back.
• EURGBP continues to trade heavily ahead of the UK autumn budget statement next Wednesday the 28th, hitting a new 17-month of .8385 Tuesday before finding support. French debt woes are likely a key driver of relative euro weakness there.

More on currencies in our dedicated section: Forex Trading News & Analysis