Nasdaq sinks 2.6%, and London barely blinks

📉 A Short Report · Thu, 22 Oct 2026 · evening post

My call @ Thu 22 Oct evening: selling on through the night Right? @ Fri 23 Oct 06:00 UK:

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How the morning call did

I stayed sold through this morning's pile of results. London dipped in the first hour, then recovered through the middle of the day, and by the close it sat a hair above where I posted at 06:00. That counts as holding: no win, no loss. The short carries on, with the loss limit ready to follow any drop.

The day in brief

Barclays: profits up, jobs down. Barclays (BARC LN) said third-quarter profit rose 12% and announced a £500m share buyback. In the afternoon it said it would cut 5,000 jobs as it leans more on AI. The shares held fairly steady, which is roughly what the index did too.

A mixed results pile. LSEG (LSEG LN) jumped about 4% after a deal to buy Octus and a raised outlook, and Rentokil (RTO LN) rose 9% on a buyback. Sainsbury's (SBRY LN) fell 4% as grocery sales grew more slowly, and Inchcape (INCH LN) lost 9% after cutting its margin outlook.

A boost for AstraZeneca. AstraZeneca (AZN LN) won US approval for Ultomiris in a rare kidney disease. It's the biggest company in the index, so good news there props London up.

Oil at a five-month high. Crude climbed to its highest since May after more attacks threatened supply from the Gulf. That helps BP (BP/ LN) and Shell (SHEL LN), and it's probably why London held up so much better than New York. In the end the index closed a touch lower than on Wednesday.

After the US close

Wall Street had its worst day since July. The S&P 500 fell 1.2% and the Nasdaq 2.6%, its steepest drop since June, as results from Tesla and Meta revived doubts about whether all the spending on AI will pay off. Chip makers led the slide. Oddly, most US shares rose, and the Dow ended flat. Money ran to safety in bonds: the US 10-year Treasury yield fell to 4.96% from 5.13%, and the 2-year to 4.65% from 4.81%, on 22 Oct 2026. Source: U.S. Department of the Treasury, daily par yield curve rates, 22 Oct 2026.

London has edged up a little since its close. My guess is that a market full of oil companies, banks and drug makers, with hardly any chip makers, looks like a hiding place on a night like this. That's my reading, not a finding.

Market mood. The OFR Financial Stress Index is below its historical average (reading for 20 Oct 2026). Source: Office of Financial Research, OFR Financial Stress Index, 20 Oct 2026. Our wording; not endorsed by the OFR.

Looking ahead to Asia

Just after midnight, the GfK survey shows how British shoppers feel; forecasters expect a slightly gloomier reading than last month. Japan's inflation figure follows at 00:30 UK and its first factory survey for October at 01:30 UK. The bigger test is whether the chip-heavy markets of South Korea and Taiwan follow the Nasdaq down. South Korea fell hard on Thursday morning after a much smaller wobble in New York.

What could move markets

Shoppers at 07:00 UK. September's UK retail sales come out an hour after this call is graded. Forecasters expect a small dip after August's rise.

Business surveys. The first October surveys of purchasing managers arrive through the morning: France at 08:15 UK, Germany at 08:30 UK, the euro area at 09:00 UK and the UK at 09:30 UK, then the US at 14:45 UK.

A busy week ahead. The US Federal Reserve meets on Tuesday and Wednesday, and the Budget is on Wednesday. Talk of bank taxes could weigh on Barclays, Lloyds and NatWest as the day gets closer.

Source: Barclays, LSEG, Rentokil Initial, J Sainsbury, Inchcape and AstraZeneca, announcements of 22 Oct 2026; U.S. Department of the Treasury; Office of Financial Research; Office for National Statistics, release calendar; GfK; Statistics Bureau of Japan; S&P Global, flash PMI calendar; Federal Reserve, FOMC calendar; GOV.UK, Budget 2026 date.