Published Friday, 23 October 2026
On Friday, 23 October 2026, the US equity market presented a complex picture, with MarketCrunch AI models providing varied outlooks for the major ETFs. SPY and DIA are observed with low confidence for their next session movements, while QQQ shows a more confident bullish projection. The broader market context is influenced by geopolitical developments, trade policy adjustments, and underlying shifts in market breadth.
Market Overview
The overall market sentiment appears to be navigating a period of mixed signals. SPY indicates a modest bearish trend with growing negative momentum and moderate volatility, with its price currently positioned near its long-term average. QQQ, despite a bullish next-session forecast, exhibits strong negative momentum and high volatility, with its Relative Strength Index suggesting potentially oversold conditions. DIA is characterized by a strong, established downtrend, though its momentum appears to be leveling off. Geopolitical tensions, particularly involving oil-producing regions, and evolving US trade policies with Canada are contributing to the macro landscape, alongside observations of weakening market breadth within the S&P 500 despite the index's headline performance.
AI View by ETF
SPY (State Street SPDR S&P 500 ETF Trust)
For the next trading day, the MarketCrunch AI model projects a slight downward movement for SPY, indicating a change of -0.07%. This forecast is accompanied by a low confidence level. The underlying analysis points to a modestly downward daily trend with increasing negative momentum. Volatility is currently at a moderate level, and the price is observed near its long-term average, suggesting a lack of clear directional conviction. Factors influencing this outlook include correlations with short-term Treasury ETFs, which are seen as a negative driver, while the opening price and very short-term moving averages are noted as positive influences. Looking towards the end of the week, the model provides a predicted close price of 766.92, with a high confidence level of 93.0% for the projected range.
QQQ (Invesco QQQ Trust, Series 1)
The AI model forecasts a bullish movement for QQQ in the next session, with a projected increase of 1.33%. This prediction carries a high confidence level. Despite this short-term bullish outlook, the daily trend is assessed as modestly downward with strong negative momentum, and volatility is expected to remain high. The Relative Strength Index indicates strong selling momentum and possible oversold conditions. Key positive influences on the next-session forecast include factors related to the strength of downward price movement, year-end positioning, and medium-term equilibrium. Conversely, the near-term exponential moving average is identified as a negative factor. The end-of-week prediction for QQQ indicates a close price of 731.40, with a confidence of 55.88% for the specified range. The model's next-session prediction was adjusted to align with the calculated end-of-week bounds.
DIA (State Street SPDR Dow Jones Industrial Average ETF Trust)
The MarketCrunch AI model anticipates a slight upward movement for DIA in the next trading day, with a predicted change of 0.17% and a low confidence level. The overall trend for DIA is strongly downward, although momentum appears to be neutral. Volatility is moderate. Analysis highlights a strong and established downtrend. Factors such as the momentum histogram, short-term momentum, and the influence of Friday trading are identified as negative drivers. Positive influences include the middle Bollinger Band and short-term exponential moving averages. The end-of-week forecast for DIA suggests a close price of 519.71, with a confidence level of 81.01% for the projected range of 513.76 to 525.96.
News Drivers
Several news items on Friday, 23 October 2026, influenced market sentiment. Geopolitical developments included the US notifying Iraq of an Iran strike and Iraq's Prime Minister warning armed groups, contributing to broader risk sentiment. Relatedly, oil prices topped $100 per barrel on Iran fears, with the Energy ETF XLE reaching a new record, impacting sectors across SPY and DIA and potentially influencing inflation expectations. On the trade front, President Trump further modified Canadian product tariffs, removing some items like plywood and certain machinery while adding others such as valves and carpets, effective October 30, 2026. Senator Susan Collins highlighted securing tariff exemptions for Maine's agricultural industries, indicating targeted impacts of trade policy. In the technology sector, Texas Attorney General Paxton's lawsuit against OpenAI and CEO Altman over alleged negative side effects on clients introduced regulatory uncertainty for AI-related stocks, directly relevant to QQQ. An opinion piece questioning whether it's 'Time To Start Deploying Cash In The AI Trade?' further underscored the ongoing discussion around technology sector valuations. Broader market commentary noted the S&P 500 being near record highs while 60% of its constituent stocks were in a bear market, raising questions about the underlying health of the market, particularly for SPY. Additionally, reports of 8 of 11 sectors falling in Friday trading, led by energy, pointed to a general market weakness and sector rotation dynamics affecting QQQ and DIA.
What to Watch Next
Looking ahead, market participants will likely monitor the evolving geopolitical situation in the Middle East, particularly its implications for global oil prices and broader risk appetite. Further details and implementation of the modified US-Canada tariffs will be important to assess their specific sectorial impacts. Developments in the regulatory scrutiny surrounding OpenAI and the broader AI industry will be key for the technology-heavy QQQ. For SPY, the divergence between the index's headline performance and the underlying market breadth warrants close observation to understand potential shifts in market dynamics. Across all three ETFs, the interplay between short-term momentum and established long-term trends, alongside movements around key support and resistance levels indicated by moving averages and volatility bands, will provide crucial context for future sessions.
FAQs
- Why is SPY's next-session prediction slightly bearish with low confidence?
The MarketCrunch AI model identifies a modest downward trend and growing negative momentum for SPY. The low confidence level suggests that while these factors are present, their collective strength for the immediate next session may not be overwhelmingly decisive, leading to a cautious outlook. - What factors contribute to QQQ's next-session bullish outlook despite observed bearish momentum?
QQQ's next-session bullish prediction, despite underlying strong negative momentum and high volatility, is influenced by specific positive indicators such as factors related to the strength of downward price movement, year-end positioning, and medium-term equilibrium. The model's assessment of these factors outweighs other bearish signals for the very near term. - How do the recent US-Canada tariff adjustments impact the market?
The recent tariff modifications, involving both removals and additions of products, can create targeted impacts on specific industries and companies. While some sectors may benefit from exemptions, others could face increased costs from new levies, potentially influencing supply chains and overall economic sentiment reflected in SPY and DIA. - What does the observation of '60% of S&P 500 stocks in a bear market' imply for SPY?
This observation suggests that while the S&P 500 index (SPY) may be near record highs, a significant portion of its constituent companies are experiencing substantial declines. This can indicate a lack of broad market participation in the rally, potentially signaling underlying fragility or a narrowing market leadership. - What are the key volatility expectations for these ETFs into the next week?
QQQ is expected to maintain high volatility, suggesting potential for significant price swings. SPY and DIA are anticipated to experience moderate volatility. These differing volatility profiles indicate varying levels of price fluctuation and potential for rapid directional changes across the major market segments.
For more detailed forecasts and analysis, visit the MarketCrunch AI forecast pages:
Cover: Photo by Nicholas Evans on Unsplash.
