Wall Street Wrap: Pre-Market, October 20, 2026

AI stocks slide again as a Korean cloud IPO flops and oil climbs, while General Motors falls despite a beat and Rapport Therapeutics soars

Wall Street looks set for a lower open on Tuesday as AI-linked stocks come under pressure again after a weak market debut for a South Korean cloud company, while oil climbs and Treasury yields fall.

Futures Snapshot

Futures were lower early Tuesday, with the Nasdaq leading the declines as AI-linked names came back under selling pressure.

What's Driving the Open

Wall Street is coming off a rebound from last week's rout, which spilled over into the broader market as concerns grew about companies borrowing too much for their AI build-outs. The S&P 500 climbed 0.4% on Monday and the Nasdaq Composite advanced more than 1%, as traders dropped hedges after the cost of volatility protection soared on Friday, Jose Torres of Interactive Brokers wrote. The relief did not last. Elice, a South Korean cloud company that has been compared with U.S. neocloud CoreWeave, tumbled more than 30% in its market debut overnight, and investors, already worried about the sustainability of the AI trade as debt and demand concerns grow, sold AI-linked shares again. The VanEck Semiconductor ETF is down more than 1% in pre-market trading, and South Korea's Kospi fell 3.73%.

Oil is the other driver. Brent crude futures hit their highest price since May, with attacks on commercial ships in the Strait of Hormuz escalating, at least 18 vessels having come under fire over the past two weeks, according to ship tracker Kpler. Treasury yields fell, with the 10-year down 0.04 percentage points at 5.096%, after housing starts for September fell 5.2% to an annual rate of 1.221 million, the third straight monthly decline, against 1.30 million expected. Traders see an 82% chance that the Fed holds rates steady at its meeting next week, according to the CME FedWatch tool, up from 42.4% a month ago. The Fed's preferred inflation gauge, the personal consumption expenditures index, is also due this week.

What could change the picture: Another weak AI listing or more stress at heavily indebted data-center operators would deepen the tech selloff, further attacks on Gulf shipping would push oil higher, and a hot inflation reading this week would revive rate-hike bets ahead of next week's Fed decision.

Overnight Markets

In Asia, South Korea's Kospi dropped 3.73% to 5,552.74, led by its two biggest chipmakers, which fell 4.23% and 2.98%, while the small-cap Kosdaq fell more than 3% to 781.97. Japan's Nikkei 225 declined 1.3% to 64,075.42 and the Topix slid 1.43% to 4,009.21, while Australia's S&P/ASX 200 fell 0.33% to 8,816.9.

Pre-Market Movers

Rates, FX & Crypto

Yields fell after the weak housing data, with the 30-year dropping the most. Building permits were firmer, at 1.400 million against 1.390 million expected. The euro is steady near $1.12 despite French political turmoil, wider French-German bond spreads and eurozone inflation of 3.8%, but the dollar is not getting a boost because Treasury yields near 5.1% are pressuring U.S. tech stocks. Bitcoin is slipping after failing to hold above $82,000. Spot bitcoin ETFs have seen $228.6 million of weekly outflows, though Monday brought the biggest daily inflow in a month, at about $527 million. The coin is wedged between its 50-day average near $81,481 and its 20-day near $83,242, and QCP warns that equity deleveraging could threaten $80,000.

Commodities

Oil is climbing again. Earlier, front-month U.S. West Texas Intermediate futures, which expire today, jumped more than 6%, putting them on track for a ninth straight session of gains and a monthly rise of almost 20%, while Brent crude futures for December delivery touched $111.67, their highest price since May. Iran's Revolutionary Guard Corps said two "non-compliant" tankers were set ablaze in the strait after hitting mines laid by its naval unit. Tamas Varga of PVM Oil Associates said front-end WTI strength reflects falling Middle East export volumes, while the U.S. decision to exempt the Russian shadow fleet from sanctions may lower freight rates and bring U.S. crude back into play, and U.S. commercial stocks are expected to have declined last week. Natural gas is the weak spot, down 2.32%, and gold is slipping to $4,123.

Key Levels & Catalysts Today

Economic data

• September housing starts fell 5.2% to 1.221 million, the lowest since May's six-year low of 1.182 million. Building permits fell 0.2% to 1.400 million, above the 1.390 million expected.
• Thursday brings weekly initial jobless claims, and the personal consumption expenditures index is also due this week.
• The Fed's next rate decision is next week, with the CME FedWatch tool showing an 82% chance of no change.

Corporate

• Crown Holdings holds its earnings call at 9:00 a.m. ET, and Washington Trust Bancorp holds its management call.
• Nucor (NYSE:NUE) reports on Oct. 27.

Top Stories

A weak Korean IPO rattles AI data-center stocks. Shares of Elice dropped more than 30% in their market debut overnight, as investors grow wary of providers of AI computing power amid concerns about overcapacity. The bearish sentiment spilled into U.S. equities. CoreWeave lost about 4% in pre-market trading as of 8:08 a.m. ET, Nebius shed about 5% along with Iren (NASDAQ:IREN), and Vertiv (NYSE:VRT) pulled back 2%.

Britain sends fighter jets to defend Saudi Arabia as Houthi attacks escalate. The U.K. said Royal Air Force Typhoons will fly defensive missions to protect Saudi airspace from drones and missiles, building on equipment and personnel already in the country, and will not conduct offensive strikes. The Houthis have launched a series of strikes on Saudi targets in recent weeks, including attacks on Riyadh's airport that caused multiple deaths and flight cancellations, and on Saudi Aramco facilities last week. Yemen's civil war has returned to full-scale fighting.

Trump says he would meet Putin and Xi to discuss ending the Ukraine war. The president suggested a meeting, which Putin reportedly proposed, could take place without Ukrainian President Volodymyr Zelenskyy present. "Anything I can do to end the war, whether somebody's there or not," Trump told reporters. He also criticized Zelenskyy and said someone else should negotiate on behalf of Ukraine. Zelenskyy has criticized Trump's decision to waive key provisions of a new Russian sanctions bill.

Alberta votes to stay in Canada. With three-quarters of the votes counted, 76% of Albertans backed the "remain" side in the province's first referendum on separation, which was nonbinding, against 24% in favor of a binding vote. Prime Minister Mark Carney called it a clear choice for unity. The result is unlikely to end the independence movement, and a pollster found 62% of Albertans believe there will never be an end to the separatist movement.

Walmart (NASDAQ:WMT) joins its store and warehouse-club memberships. The combined Walmart+ and Sam's Club Plus membership will cost $120 a year, nearly $100 less than buying both individually, and includes free delivery from both chains, a Peacock or Paramount+ subscription, gas savings and 2% Sam's Club cash on eligible purchases. The company said any costs are not expected to materially affect its fiscal third-quarter or full-year guidance.

Eyes on whether AI-linked stocks stabilize, on oil as the WTI contract expires, and on next week's Fed decision, where markets expect rates to hold.