SpaceX beats earnings, Musk hints at Tesla merger talks

Space Exploration Technologies Corp. (SPCX) reported third-quarter 2026 earnings that significantly exceeded analyst expectations, a performance that coincided with Elon Musk’s announcement that special committees are now discussing a merger with Tesla Inc. (TSLA). The company posted earnings of $0.35 per share, surpassing the Zacks Consensus Estimate of $0.10 by 250%, while revenue surged 161% year over year to $14.57 billion, outpacing the expected $12.53 billion by more than 16%.

The positive reception extended to the broader artificial intelligence sector, where Super Micro Computer Inc. (SMCI) lifted its first-quarter fiscal 2027 revenue projection to a range of $18.5-19.5 billion, up from the previous outlook of $14.5-15.5 billion. Citing a favorable customer and product mix, the firm also raised its gross margin forecast to 12-12.5%, a jump from the earlier projection of 10.4-10.8%. Following these updates, SMCI shares climbed 9.6%, while peers Dell Technologies Inc. (DELL) and Hewlett Packard Enterprise Co. (HPE) advanced 5.3% and 3.7%, respectively.

U.S. stock markets closed higher on Wednesday as these strong third-quarter results drove momentum across major indices. The Dow Jones Industrial Average (DJI) rose 0.7% to finish at 52,856.09, a gain of 360.21 points, after a choppy session that saw the index dip nearly 104 points intraday. Of the index’s 30 components, 17 ended in positive territory while 13 fell. The tech-heavy Nasdaq Composite gained 1.1% or 278.04 points to close at 26,702.86, supported by strong performance from technology leaders. The S&P 500 increased 0.6% to end at 7,757.17, with ten of its eleven sectors finishing in the green.

Sector-specific gains were notable in utilities, real estate, health care, and financials. The Utilities Select Sector SPDR (XLU) rose 1.3%, the Real Estate Select Sector SPDR (XLRE) climbed 1.7%, the Health Care Select Sector SPDR (XLV) jumped 2.4%, and the Financials Select Sector SPDR (XLF) increased 1.2%. Market sentiment indicators reflected reduced anxiety, with the CBOE Volatility Index (VIX) dropping 3.6% to 16.68.

Trading volume on Wednesday totaled 16.11 billion shares, lower than the last 20-session average of 17.10 billion shares. On the New York Stock Exchange, advancers outnumbered decliners by a ratio of 1.37-to-1, while a similar 1.3-to-1 ratio favored advancing issues on the Nasdaq.

In the bond market, yields on U.S. government bonds remained static across different maturities. The yield on the benchmark 10-Year U.S. Treasury Note held at 5.119%, the short-term 2-Year U.S. Treasury Note stayed flat at 4.7889%, and the long-term 30-Year U.S. Treasury Note remained firm at 5.4264%. Additionally, commercial crude oil inventories for the week ending Oct. 16, 2026, decreased by 3.1 million barrels to 412.5 million barrels, leaving stockpiles 3% below the five-year average.