The S&P 500 reached a record high earlier this month but has since stalled out and retreated some. Higher oil prices have raised worries that inflation will remain elevated for the foreseeable future with economists expecting the Fed to raise rates again by December. Technology stocks have felt the most pressure, as investors question whether or when the massive spending on artificial intelligence will pay off and if higher interest rates will weigh on companies valued on future growth.
Earnings season has generally been a bright spot so far. About 76 S&P 500 companies reported this week with analysts expecting third-quarter profits to have grown about 29% from a year ago. This would be the third straight quarter above 25%. Results have been solid across many industries. GE Aerospace raised its outlook, and Meta posted record revenue. United Airlines carried a record number of passengers with record revenue, but oil prices remain a big concern. All of this shows us that the market is getting “picky.” Meta fell about 7% on Thursday as a continued surge in AI spending worries resurfaced. Netflix grew revenue by +12% over last year but also dropped after a weaker sales forecast. These are just a few examples of what we have been seeing over the week. A lot of solid and upbeat headlines mixed in with one speculative sentence can change the picture!
Adding to the overall pressure recently was the housing data released this week. Builder confidence fell to its lowest level since 2012, housing starts came in well below expectations, and pending home sales fell 7.3% in September. The common thread is mortgage rates sitting above 7% with no drop in sight. Those rates follow long-term Treasury yields, which have been pushed higher largely by heavy government borrowing, not just the Fed. The government ran a deficit of nearly $2 trillion in fiscal 2026. The good news is that the 10-year Treasury yield has eased to about 5% from its early October high, and weekly jobless claims stayed low at 194,000, a sign the job market is holding somewhat steady.
Oil remains the wild card in the near-term. Brent crude, the global benchmark, rose Friday to its highest level in more than five months. Consumers are feeling it, as a key survey of consumer sentiment remains near record lows and shoppers expect inflation of nearly 5% over the next year. For savers, today’s higher yields mean cash and interest-bearing investments are paying more than they have in years. For borrowers, high mortgage rates argue for patience before buying or refinancing. For long-term investors, choppy weeks like this one are a normal part of investing, and a diversified plan built around your goals is the best way to stay on course!
Interesting to Note
Look up to the night sky this weekend for the Hunter’s Moon, October’s full moon, which reaches its peak just after midnight on Sunday night. The name dates back centuries: with the harvest finished and fields cleared, the bright moonlight helped hunters stock up for winter. Sunday or Monday evening after sunset are both great times to catch it rising.
Looking Ahead
• Fed meeting (Oct. 27–28): Markets expect the Fed to hold rates steady this time, though investors see a strong chance of another increase by December.
• Big Tech earnings (Oct. 28–29): Microsoft and Alphabet report on Wednesday and Amazon reports on Thursday, with about one-third of S&P 500 companies reporting during the week.
• Economic growth and inflation (Oct. 29): We will get the first look at third-quarter GDP and the PCE report, the Fed’s preferred inflation measure.
• Midterm elections (Nov. 3): Election season may add to short-term market swings, but history shows markets tend to look past them over time.
Have a nice weekend!
Written By: Chris Wasson, CFP®
Sources
Yahoo Finance: Q3 Earnings Beats for Meta, Tesla, IBM and T.I.
GE Aerospace: Third Quarter 2026 Earnings Release
NAHB: Builder Sentiment Falls on Rising Rates
U.S. Census Bureau: New Residential Construction, September 2026
NAR: Pending Home Sales Decreased 7.3% in September
Benzinga: Stock Market Today, Oct. 20, 2026
Helious: Initial Jobless Claims: 194K
TheStreet: Stock Market Today, Oct. 23, 2026
InvestingLive: UMich final October consumer sentiment 48.0 vs 46.3 expected
Farmers’ Almanac: Hunter’s Moon 2026
Investing.com/Reuters: Earnings flood, Fed meeting pose pivotal tests for rickety AI market rallyAdmiral Markets: Big Tech Week earnings calendar
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