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Chip Washout Hits 7%; Asia Holds, Oil at Five-Month High

Chips — the washout hits 7%, Asia refuses to follow, and oil jumps to a five-month high

Thursday's washout was confined to the hyperscalers and chips: chip ETFs fell 6–7%, Lam Research −11.8%, Coherent −12.5%, Meta −7% — while cloud, cybersecurity and software closed flat to green and the AI users rallied, Accenture +7.7%. The VIX closed at 19. Overnight the panic stops at Asia's door — Kospi −0.4%, Hong Kong +0.9%, Nasdaq futures flat — while Brent-tracking oil ETFs closed at 52-week highs on Middle East supply fears.

In this edition

SOXX SMH ASML BNO XLE CLOU IGV SLB

The Morning 10 Fri, Oct 23, 2026 ~90 seconds 08:00 CET

The ten points

Thursday took Wednesday's after-hours verdict and wrote it across the whole tape. The chip ETFs fell six to seven percent — SOXX −6.8%, SMH −6.0% — with the equipment and optics names worst: Lam Research −11.8%, Coherent −12.5%, Lumentum −11.5%, Fabrinet −10.8%, Applied Materials −8.2%, ASML −6.9%. Meta, the one print the market had paid on Wednesday night, gave the whole gain back and more, closing 7.0% lower. The Nasdaq 100 lost 2.9%, the S&P 500 1.2%, and the VIX jumped 14% to 19.

Overnight, two things happened that the draft of this morning could not see. First, Asia declined to follow: the Kospi is down just 0.4% and the Nikkei 0.5% late in their sessions, Hong Kong has rebounded 0.9% from Thursday's heavy fall, and Nasdaq futures sit flat — only Taiwan, down 1.8%, is still selling its chip complex. Second, oil became a story again: Brent traded above $110 for the first time since May after drone and missile attacks on Saudi facilities — one intercepted near Aramco's Shaybah oilfield — and stalled diplomacy with Iran. The Brent-tracking BNO closed up 2.8% at a 52-week high; energy equities fell anyway, with XLE down 0.9% in the broad risk-off.

Under the surface, the selling was confined — almost surgically — to the hyperscalers and the chips. Cloud and cybersecurity did not participate: the WisdomTree cloud fund rose 1.2%, CLOU and the broad software ETF IGV closed flat, cyber barely moved. And the AI users — the companies billing for adoption rather than funding the build-out — rallied outright: Accenture, the poster child of the cohort, rose 7.7%, Cognizant 6.0%, Infosys 3.7%. Add staples +3.3% and utilities +2.1%, and Thursday reads as a rotation with a direction: out of AI capex, a step out of AI opex, into AI applications and AI users. Today brings flash PMIs for Germany (07:30 UTC) and the US (13:45 UTC), plus American Express and oil-services bellwether SLB before the open. Monday's close grades all five of Wednesday night's earnings windows.

  1. The washout — chip ETFs down 6–7%, VIX at 19, Meta's payment confiscated
  2. Wednesday's five earnings windows — one in every corner of the record
  3. Asia — the washout stops at the water's edge
  4. Oil — Brent above $110, the ETFs close at 52-week highs
  5. The defensive bid — staples +3.3% on a red day
  6. Inside the Rubin 100 — the layer map of a targeted de-rating
  7. The divide — cloud, cyber and the AI users untouched while hyperscalers and chips sold
  8. Gold — the notable weakness: sold 2.6% on a risk-off day, near its 52-week low
  9. Calendar — flash PMIs, AXP and SLB today; the big spenders land next week
  10. Outside View — Dan Niles

  1. The washout — chip ETFs down 6–7%, VIX at 19, Meta's payment confiscated

    Structure
    What
    Thursday turned the after-hours selling into a full washout: SOXX −6.8%, SMH −6.0%, XSD −6.2%. Equipment and optics fell hardest — Lam Research −11.8%, Coherent −12.5%, Lumentum −11.5%, Fabrinet −10.8%, Applied Materials −8.2%, ASML −6.9%, Micron −6.3%. Meta closed −7.0% at 648.85, giving back Wednesday night's gain and more; Nvidia lost 4.4%, Amazon 4.6%. The Nasdaq 100 fell 2.9%, the S&P 500 1.2%, and the VIX rose 14% to 19.03.
    If
    If the selling resumes at today's open despite flat futures, the washout becomes a trend day pattern rather than a one-session repricing.
    Why
    The names sold hardest share one exposure: revenue tied directly to next year's AI datacenter build plans. The de-rating is targeted at the capex calendar, not spread evenly across tech.
    Then
    Watch whether the equipment names that fell double digits — Lam, Coherent, Lumentum — stabilise at the open; a bounce led by the worst-hit names would say forced selling exhausted itself Thursday.

  2. Wednesday's five earnings windows — one in every corner of the record

    Structure
    What
    Two sessions before Monday's grading, the five reaction windows have spread across the whole scale: SAP +3.4% from its entry close (just above the paid line), IBM +0.3% (the entire 4.6% after-hours drop clawed back), Tesla −3.1% (a hair inside sold), Lam Research −11.8% and Meta −7.0% (both deep in sold territory). We grade each report over three sessions from the close before the reaction, with ±3% as the band between paid, flat and sold.
    If
    If Meta and Lam stand near these levels to Monday, the season's message is confirmed: the market is re-rating AI-capex exposure, not quarterly execution.
    Why
    IBM's full recovery shows the after-hours tape overstated at least one verdict — which makes the two names that kept falling through a full session the signal, not the noise.
    Then
    Watch Meta against 676.59 — the −3% sold threshold — and Lam against 253: a close back above either line today would reopen a window that currently looks decided.
  3. Agentic Winners 40 Forty names positioned to win the agentic transition — tracked as a live index, daily. Open AW40 →

  4. Asia — the washout stops at the water's edge

    Structure
    What
    After leading the selling Thursday morning, Asia declined to extend Wall Street's washout: the Kospi is down just 0.4% and the Nikkei 0.5% late in their sessions, Hong Kong's Hang Seng has rebounded 0.9% from Thursday's heavy fall, and Nasdaq futures sit flat. The exception is Taiwan, down 1.8%, where the chip complex is still being sold.
    If
    If Seoul and Tokyo close near flat, the global chip de-rating paused exactly where it started two days ago — in the memory and supplier names.
    Why
    Asia hosts the build-out's suppliers; a calm session there after a 7% US washout says the marginal seller may already have sold. Taiwan still falling keeps the foundry question open.
    Then
    Watch the European semi open — ASML and ASM International after Thursday's 7% drops — for which side of the Pacific Europe follows.

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C · point 11 · members

Today in line 11: the night's one payment lasted exactly one day — what the confiscation of Meta's green print says about who the chip bear market is grading now, and why Asia's calm morning may matter more than Wall Street's 7% washout.

The privileged, actionable read — what we do, and at which level — is in point 11, for members only.

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