Thursday, October 22, 2026 u2014 Stocks fell as the season's first megacap earnings failed to reassure investors about the rebound in the AI trade, with Meta beat on revenue and raised its spending plans but announced a nonvoting share class, and Tesla cut its capex, so Nasdaq 100 futures fell. The retreat was driven by concern that a slate of technology earnings fell short of elevated expectations and escalating hostilities in the Middle East pushed oil prices higher.
Meta announced it is creating a new class of non-voting stock; the Class C shares will be distributed to existing stockholders and begin trading in late January 2027. Losses at Reality Labs, its virtual reality and smart glasses unit, which came to $4.1 billion in the third quarter, are expected to narrow to about $15 billion in 2027, from $18 billion to $19 billion this year. Looking beyond 2026, Meta expects to continue investing aggressively to support both its core business and emerging AI initiatives, and its current capacity and what is scheduled to come online gives it the flexibility to allocate resources across model training, core business growth, and the development and support of new products; Meta's AI investments are already delivering substantial incremental advertising revenue through stronger engagement, better recommendations, and more efficient monetization.
Tesla told investors on October 21, 2026, that it is pulling back on capital spending for the rest of the year, even as CEO Elon Musk doubles down on artificial intelligence, humanoid robots, and a possible merger with SpaceX; the company cut its 2026 capital-expenditure forecast to roughly $20 billion, down from a prior guidance of more than $25 billion. Free cash flow reached $1.53 billion, supported by increased payables, while management cut 2026 capex guidance to approximately $20 billion.
Chip stocks have closed lower for eight straight sessions, their longest losing streak in 16 years; the iShares Semiconductor ETF (SOXX) closed Thursday at $514.71, nearly 14% off its October high. A disappointing outlook from chip-equipment maker Lam Research Corp. sent its shares more than 9% lower in early trading. At least 47 major data-center projects have faced delays or cancellations in 2026, raising questions about execution and infrastructure commitments.
Australian pension fund investor IFM Investors has taken a 64% stake in Associated British Ports in one of the biggest UK deals of the year, with the purchase valuing the UK's largest port operator at about u00a310 billion ($13.4 billion). The transaction will see Canadian pension giants CPP Investments and OMERS sell their combined 63.88% stake in ABP to Global Infraco Haven Bidco, an indirect subsidiary of the IFM Global Infrastructure Fund. The transaction remains subject to regulatory and shareholder approvals, including a national security review, and is expected to close in the first half of 2027.
Taiwanese authorities blocked Grab Holdings Ltd.'s $600 million takeover of Foodpanda's local unit following an antitrust review, with the commission saying it held talks with the parties on potential merger remedies, but the proposed commitments were insufficient to address competition concerns. Taiwan's Fair Trade Commission pointed to the Singapore-based ride-hailing and delivery giant's equity and board ties to Uber, which operates the island's other leading food delivery platform. The decision, for now, ends Grab's first attempt to expand outside Southeast Asia.
Meta grew revenue 26 percent to $64.6 billion but plans $135 billion to $145 billion in A.I. spending this year, keeping its foot on the gas when it comes to investment and raising the low end of the range from $130 billion. In addition to all-time-high revenue, Meta said it's creating a new class of non-voting stock; the Class C shares will be distributed to existing stockholders and begin trading in late January 2027. The declines in chip stocks come as investors grow increasingly concerned that higher borrowing costs could weigh on the massive capital spending required to build out AI infrastructure, and concerns around global memory chip oversupply as early as 2029 seem to be weighing down sentiment.
Stocks slid in a broad retreat from riskier assets as a slate of technology earnings fell short of elevated expectations and escalating hostilities in the Middle East pushed oil prices higher, with Nasdaq 100 futures retreating 1.8%, threatening to erase much of the index's 2.2% gain this week, while S&P 500 contracts fell 1%. Oil prices rose as continued tensions in the Middle Eastu2014involving Iran, Saudi Arabia, and Yemen's Houthisu2014kept markets largely on edge over persistent supply disruptions. The Federal Open Market Committee's upcoming meeting on October 28 is seen as unlikely to produce an interest rate hike, with fixed income markets currently projecting an eight in ten chance that rates are held steady in October, while markets firmly expect a rate hike to happen on December 9 instead.
A new SOP took effect October 1, 2026, replacing SOP 50 10 8. The small-loan threshold moved to $350,000, with the 7(a) Small Loan category, which carries lighter documentation and a more streamlined credit analysis, having used to run up to $500,000. New rules bar green card holders from 7(a) and 504 loans, while raising acquisition loan debt service coverage requirements to 1.25; however, combined SBA loan caps doubled to $10 million, and International Trade Loans now offer 90% federal guarantees. Lenders must also apply stricter requirements for initial business acquisition loans starting October 1, with buyers acquiring a business without prior ownership experience facing a higher debt service coverage ratio of 1.25, and borrowers must also make an unyielding 10% down payment that lenders cannot eliminate.
The earnings from Meta and Tesla expose a widening gap between what major tech platforms are spending and what investors believe those investments should deliver. Negative free cash flow means Meta is currently no longer funding its investments entirely from its ongoing business. Tesla's $5 billion capex cut signals either discipline or disappointment with near-term AI and robotaxy returnsu2014the market has not yet decided which. For mid-market owners watching their own tech stacks and capital budgets, the message is clear: AI infrastructure spending must demonstrate returns, not just commitment. Venture-backed companies and equipment suppliers are absorbing the immediate pain; operators deploying AI should watch whether the slowdown in capex guidance portends a genuine bottleneck or merely a reset of expectations.
On credit and policy, the October 1 SBA rule changes narrow the borrowing path for many small businesses while raising loan size caps for those who qualify. Green card holders can no longer apply for popular 7(a) or 504 loan programs. Despite these tighter restrictions, borrowing caps have expanded significantly for growing enterprises, with the government doubling combined borrowing limits for 7(a) and 504 programs from $5 million to $10 million. The new regime will tighten credit access for non-citizen owners and first-time acquirers while expanding capacity for established businesses with strong credit profiles. Energy and Middle East tensions add upside risk to cost inflation; monitor supplier contracts for escalation clauses tied to oil or commodity indices.