SpaceX Beat and Raise Launches Nasdaq Rally, Reinvigorates AI Enthusiasm: Oct. 21, 2026

SpaceX’s spectacular beat and raise last night is reinvigorating Wall Street’s AI enthusiasm with the Nasdaq leading among the major indices in a rally that features broad participation. Investors are growing increasingly optimistic about incoming earnings reports and are raising bullish exposures prior to quarterlies that are due after the bell from Mag7 members Tesla and Meta. Sentiment is also being bolstered by SpaceX and Tesla disclosing that they are exploring a potential merger. In the energy patch, a modest oil price decline is dampening the impact of US-Iran tensions, as strengthening evidence of crude transiting the Strait of Hormuz irrespective of the ongoing conflict continues to keep WTI beneath $100. Meanwhile, participants are hopeful that President Trump and the GOP will attempt to ease pain at the pump before the upcoming Midterm elections in light of deteriorating chances of the party holding onto control of the House, Senate and various governorships as indicated by the Interactive Brokers Prediction Markets and other sources. Elsewhere in trading, yields and the greenback are nearly flat against the backdrop of an empty economic calendar today, commodities are dropping across the board, cryptocurrencies are rallying as diehard fans of digital assets maintain hope for an Uptober and risk-on attitudes have volatility protection instruments seeing lighter premiums as folks unwind hedges for the third consecutive day.

Rally Strengthens After Nasdaq Exceeds 50-Day

With the Nasdaq 100 right beneath the key 50-day moving average, investors are likely waiting to hear from Meta and Tesla to confirm AI buoyancy prior to breaching the critical technical level. Such a development would meaningfully strengthen this broad advance if the tech sector can resume its uptrend, and from what’s been communicated so far, all arrows point to accelerating momentum in the coming sessions as we approach the most favorable seasonal period of the year. With little economic data in the way to influence the market, cheaper valuations and interest rates that are lower than from a few weeks ago along with robust earnings, markets have a terrific set up to rally from here. Meanwhile, the geopolitical premium is still too elevated, in my opinion, and should we get any positive news from the foreign affairs front, yields and oil could plunge 15 basis points on the former and $10 per barrel on the latter, serving to loosen financial conditions, bolster growth and fortify risk appetites via improving profitability expectations. Indeed, a 10-year below 5% would be a spectacular occurrence for equities.

International Roundup

Mexico Retailing Produced Mixed Results Last Month

Retail sales growth in Mexico for outlets affiliated with the National Association of Self-Service and Department Stores climbed 0.9% year over year (y/y) on a same-store basis, which includes business that are at least one-year old. When including new stores, retail transactions rose 3.7%. The Association reports that online commerce supported the overall gains in cash register activity while brick and mortar operations continued to face challenges of declines in consumer traffic, especially at some of the nation’s largest stores. Specialty distributors bucked the trend with 9.4% growth across the board and a 4.8% jump for same-store sales. Conversely, self-service retailers and department retailers were hit with 0.3% and 0.8% contractions on a same-store basis. More broadly, consumption is being dampened by a weak labor market with the 35 companies comprising the Mexican Stock Exchange Índice de Precios y Cotizaciones reporting that payrolls in the second quarter declined by 30,768 workers.

But Government Data Shows Strong August

Retail transactions accelerated in August and exceeded expectations, according to data from the National Institute of Statistics and Geography. Cashier activity climbed 3.3% y/y and 1.2% month over month (m/m) following July’s 1.8% annual gain and 0.1% monthly contraction. In addition to accelerating, retail growth surpassed the economist consensus estimate for y/y and m/m results of 2% and 0.4%.

Japan Trade Deficit Narrowed Last Month

September was the fifth consecutive month in which the value of Japan’s shipments to foreign markets was substantially lower than that of imports, but the trade deficit of 536.6 billion yen, sank from 1,112 billion yen in the preceding month.  The value of shipments to foreign lands climbed 16.7% y/y, missing the economist consensus estimate for a 20.1% expansion and weakening from the 19.3% jump in August. Imports, meanwhile, climbed 18.9%. Economists anticipated a 19.6% ascent following July’s 28% gain. Japan, which is one of the world’s largest net importers of crude, has been hit with the headwinds of higher oil prices, which have caused the value of imports to the island country to soar. Additionally, import prices of products derived from petroleum have also climbed. The country’s trade deficit has also been jacked up by a weak yen, which results in higher import costs when converting the currency to the US greenback. The Bank of Japan has responded by increasing its benchmark interest rate to a 31-year high of 1.25%. It had previously maintained a negative rate to shore up the country’s wobbling economy.

Oil Prices Continue to Fuel Wholesale Inflation in South Korea

Wholesale stickers in South Korea jumped 7.7% y/y last month, easing slightly from the preceding month’s 7.9% jump, according to the Producer Price Index. The monthly pace moved marginally in the same direction with the 0.2% northward change accelerating from the 0.1% m/m August climb. The coal and petroleum products category was the boogeyman last month with prices 53.6% above the year-ago period and 0.9% higher than in August. The AI surge, furthermore, has stoked demand for computer, electronic and optical equipment, which pushed the category’s PPI increase to 20.5% y/y.