SpaceX Earnings Beat and Merger Speculation Lift U.S. Futures

Key points

• S&P 500 futures rose 0.2% to 7,772.75, while Nasdaq 100 futures climbed 0.6% to 29,839.75 by 02:51 ET.
• SpaceX shares jumped over 9% in extended trading after third-quarter revenue reached $14.58 billion, beating expectations, and net income hit $4.4 billion.
• SpaceX AI revenue grew more than ninefold, though the company noted substantial investment requirements for computing capacity.
• Elon Musk stated that special independent committees at SpaceX and Tesla are exploring a potential merger between the two companies.
• Netflix shares fell 6% after results indicated slowing revenue growth, while Super Micro Computer surged 16% on strong revenue and margin forecasts.
• The Dow Jones Industrial Average rose 1% and the S&P 500 gained 0.3% in regular trading, while the Nasdaq Composite edged down 0.02%.

Background

SpaceX stock had a market cap of approximately $2.2 trillion in early October 2026, with heavy capital expenditures on AI infrastructure outpacing profitability. The S&P 500’s CAPE ratio has topped 40 for five months, raising dot-com bubble comparisons, though AI-driven earnings growth of 31% is supporting valuations. Markets had recently ignored oil volatility to focus on Q3 earnings, with Goldman Sachs expecting earnings to support stocks into year-end despite AI volatility.

Why it matters

SpaceX's strong earnings and merger speculation with Tesla signal continued investor appetite for AI-driven growth, despite high valuations. The divergence between SpaceX's surge and Netflix's decline highlights market sensitivity to growth momentum and guidance. Upcoming central bank decisions and major tech earnings will test whether AI optimism can sustain market gains amid potential rate tightening.

What to watch

Investors will monitor Tesla and Meta earnings on Wednesday for insights into AI investment returns and financing costs. The Federal Reserve, European Central Bank, and Bank of Japan will announce policy decisions between October 28 and 30, with the Fed expected to hold rates at 3.75%-4.00% but potentially resume tightening in December. SpaceX and Tesla merger discussions may yield further updates as committees evaluate terms.