Swissquote: The cost of shooting for the moon

October 21, 2026

But there was no agreement, and the moves reversed just as quickly after Reuters reported that Iran insisted its demands—including lifting the US blockade and oil sanctions—be met before talks. Surprise!

So we’re back to square one. The price moves are driven by nothing more than empty hope, with considerable uncertainty remaining. US crude is back above $100 per barrel after swinging between $96 and $103 in yesterday’s session, while Brent regains the $110 handle after dipping below $106 on hopes yesterday.

Higher oil continues to pressure inflation expectations, pushing yields higher. European debt stress adds another layer of pressure. The spread between French and German 10-year yields spiked past 152 basis points yesterday, returning to levels seen during the European sovereign debt crisis—with no easy fix in sight either.

The latter could continue to keep the euro under pressure against the US dollar—regardless of broader appetite for the dollar—as European bond troubles could soften the European Central Bank’s (ECB) hand by delaying its next rate hike. Mounting yields already tighten financial conditions across the euro area by increasing borrowing costs.

As for the US dollar, the greenback is retreating from its mid-October peak of nearly 103 on the dollar index, but the medium-term outlook remains positive as rising energy prices and safe-haven demand support dollar demand.

Equities better bid

The sharp retreat in oil prices fuelled appetite for major US indices on Tuesday and also helped limit losses in the Stoxx 600, which rebounded later in the session. Technology remained under pressure, however, after South Korean AI cloud and data centre company Elice tanked by up to 35% on its first day of trading.

The good news is that the stock is up by around 30% today, the Korean Kospi index is also better bid (+2.56% at the time of writing), and both US and European futures are pointing to a positive start despite a rebound in oil prices. That’s the crazy part. Hope is gone, but the positive vibes stay.

Speaking of positive vibes, SpaceX released its quarterly results after the bell, and the announcement could hardly have been better. The company posted revenue growth of 161% from the same quarter last year, a 69% jump in Starlink revenue—the satellite internet division—and a nearly tenfold increase in revenue from its AI division, thanks to mega deals it struck with companies like Anthropic and Google to rent out data centre capacity. As such, the company swung from a $1.1bn loss in the same quarter last year to a $4.4bn profit.

I was saying a few weeks ago, remember, that SpaceX could become more of an AI company than a space company. This is where we are. There is potential for substantial gains in its AI business, as AI infrastructure is very capital intensive, and SpaceX certainly has more means than many smaller companies dealing with growing credit stress right now.

Yes, I am looking at neocloud companies like CoreWeave in particular, the latter having seen its default risk levels explode over the past week. The company’s 8.5% coupon bond maturing in 2032 is now yielding almost 15%, signalling sharply higher potential refinancing costs, while SpaceX’s bond with a similar maturity (2033) yields less than half as much. This means that, if AI stress mounts, SpaceX could swallow up AI infrastructure business from smaller competitors on Earth, with ambitions to take it into orbit one day.

I admit this could become a good—yet costly—story. To give some numbers, one of its biggest customers, Anthropic, reportedly spent nearly $9bn on computing capacity and AI infrastructure in the six months to the end of June—more than it spent during the whole of 2025, and increasingly to allow its business to grow.

SpaceX, meanwhile, is expected to spend nearly $70bn in capex this year, but wait: that spending is expected to reach almost $197.4bn in 2028, according to figures cited by Melissa Otto, global head of Visible Alpha research at S&P Global. In other words, great growth comes at a big cost.

As for whether a merger with Tesla is a good idea, I would say it could be if the two companies can prove that the synergies create value for both of them. If Tesla is better off exploring AI synergies with other companies, the deal could be rejected by investors.

Anyway, SpaceX shares rallied by up to 9% in after-hours trading, taking them some 7% above their opening price on the first day of trading. It’s hard to tell whether this is expensive or cheap; it’s rather a question of how much you believe in Elon’s capacity to reach orbit, and how much you are willing to risk!

More earnings

Meta will announce its latest quarterly results today after the bell. Analysts expect revenue to rise nearly 24% to around $63.4 billion. Reported profit should rebound sharply from last year, when a one-off $15.9 billion tax charge depressed earnings.

But rising AI-related costs remain a pressure point. Capex is expected to have more than doubled to almost $42 billion, with free cash flow forecast at negative $8.5 billion – not great when borrowing costs and AI credit stress mount. So investors will want evidence that advertising growth and adoption of its Muse assistant can justify the spending.

More broadly, the spending outlook from Meta and its peers will likely send ripples across the broader tech indices. A bigger budget could continue to support chipmakers and data centre suppliers by signalling continued demand for AI infrastructure. But high spending could revive worries about increasingly leveraged AI investment as borrowing costs rise and credit stress mounts.

As such, Big Tech results could produce a mixed reaction in the Nasdaq: robust spending could support AI enablers but weigh on those doing the spending if revenue growth fails to justify the investment.

Softer spending plans, on the other hand, could ease investors’ worries about endless funding needs, but would be bad news for AI suppliers already grappling with concerns about the growing credit stress.