Are we heading for Black Monday tomorrow? 🚨
There's a widespread vibe on social media that this coming Monday could be very difficult for the indices on Wall Street, and many users are comparing it to Black Monday.
If this happens, it will be a cruel and precise historical recurrence.
The original Black Monday was on October 19, 1987. The Dow Jones then plunged 22.6% in one day, its largest daily drop in history. Tomorrow is October 19, 2026 - exactly 39 years later. 🗓
We are trying to make sense of it: what exactly is happening now. 📊
First, the past week: the Nasdaq 100 (QQQ) fell 5.5% for the week. 🔴 The Semiconductor Index (SMH) fell 10.5%, after 8 consecutive days of decline. 🔴 Micron fell 14.6%, 🔴 AMD stock 13.1%, 🔴 CoreWeave lost a quarter of its value. 🔴
The Fear Index (VIX) jumped almost 25% on Friday, to its highest level since late July. 🔼
Since the tough close of last week, the weekend is not waiting for the open, and a stream of negative news for the markets continues to flow: ▶️
1️⃣ DeepSeek: On 17.10, DeepSeek released an update for model V4.1-Flash which consumes significantly less memory per token.
Last night, continuous contracts on memory and chip stocks plunged together within minutes (SOXL 5.45%-, Micron 3.42%-, SanDisk 3.6%-), with position liquidations of about $51.6 million in 10 minutes.
In this context, we already revealed this morning: the data that alarmed the market was published in a DeepSeek article as early as September 17. We wrote a full post about it.
2️⃣ Microsoft canceled a huge contract with Nscale in the UK - due to electricity ❌ According to The Telegraph and Bloomberg, Microsoft canceled the agreement for a 50-megawatt campus in Loughton, Essex. The reason: authorities told Nscale that the site is not expected to receive an electricity connection until the 2030s. Microsoft was the only announced client there, and the plan included about 23,000 graphics processors for Azure.
At first glance, this sounds bad for the cloud industry. But note the chain: 🔣 Microsoft did not cancel the need for computing power. It canceled a site that has no electricity. 🔣 It still needs this capacity, and now it will look for it where there is already electricity today. 🔣 In the UK, electricity is the bottleneck. In the United States, there are data center operators with capacity already connected to the grid. 🔣 And whoever holds connected capacity, when a client the size of Microsoft is looking, holds bargaining power.
In other words, the canceled contract in the UK may turn into demand for available capacity in the US. This is our assessment, not a Microsoft announcement, which did not specify the reason.
And one more small detail: Nscale is planning an IPO in New York at a valuation of about $35 billion. Not exactly the timing it wanted...
3️⃣ Morgan Stanley cuts AMD's forecast ⚠️ According to reports, Morgan Stanley sharply cut its shipment forecast for AMD's AI processors: for 2026 by about 75%, to about 600,000 units, and for 2027 from 2.7 million to 1.3 million. For Nvidia, the forecast remained about 8.1 million units. AMD fell 5.95% on Friday. The implication: this is not a call that AI demand is disappearing, but rather that the pie is being divided differently - more for Nvidia, less for AMD.
4️⃣ France is burning 🚩 About 550,000 protesters across France on Saturday, 110,000 of them in Paris, and some of the worst riots in recent years: stores were looted and public buildings set on fire. And this is happening in a country that is already struggling: the government's borrowing costs are at a more than 20-year high, and an analyst quoted in Fortune says France is "on the brink" ahead of a crucial budget vote. Why does this interest Wall Street? When a large Eurozone country struggles to raise debt, its bond yields rise, and the pressure spills over to the rest of Europe.
5️⃣ Ukraine: More than 1,000 drones 💥 Ukraine launched a large-scale aerial attack, with more than 1,000 drones, hitting a central oil terminal in St. Petersburg. The attack came exactly 7 days after President Trump said Ukraine and Russia had agreed to an "energy ceasefire." Zelensky immediately declared he did not recognize such a ceasefire, and today said Ukraine was "done" with the ceasefire. And why is this important? Oil is already expensive: Brent is trading around $109 per barrel. An attack on oil infrastructure adds more pressure on prices, and high energy prices are exactly what makes it difficult for the Fed to cut interest rates.
6️⃣ Weekend futures in the red 🔴 The Nasdaq weekend futures on IG are trading today at about 0.5% down. On Polymarket, the prediction market, trading prices a 56% chance that the S&P 500 will open lower tomorrow.
When connecting everything, three pressures are seen converging this week:
A question about the viability of AI expenditures (DeepSeek, Morgan Stanley, CoreWeave), energy pressure (Russia, oil at $109, electricity in the UK), and pressure on government debt (France).
Will history repeat itself?
Tomorrow we will know...