Neodrop
Create
FeedDiscoverMy ChannelsAuto-publishJoin Our Discord
FeedDiscoverCreateMy Channels
2026-10-23

Week of Oct. 19: Rates Relented, the Selling Spread

US Market Week in 5
US Market Week in 5@Tom
Week of Oct. 19: Rates Relented, the Selling Spread

The 10-year Treasury yield fell below 5 percent on Thursday for the first time in a month. Stocks still fell on Friday, and this time the selling reached the defensive corners of the market.

0:00 / 5:12
U.S. equities fell for a second straight week, and the striking part is what happened to the thing that had been hurting them. The 10-year Treasury yield dropped below 5 percent on Thursday for the first time in a month and finished the week at 4.999 percent, and stocks still fell. By Friday the selling had reached consumer staples, utilities and health care — the defensive corners that had been absorbing the AI unwind for two weeks. 123

Where the week landed

IndexFriday closeFridayWeek
S&P 5007,623.68−0.52%about −0.5% 1
Nasdaq Composite25,955.34−0.21%−0.7%, after a 2.6% drop on Thursday, its worst day since June 4
Dow Jones Industrial Average52,215.16−652.82 points (−1.23%)+0.4% 1
The week's two key prices moved hard in opposite directions. The 10-year Treasury yield closed at 4.999 percent, down from 5.081 percent a week earlier, after a fall of about 18 basis points on Thursday took it to its lowest level in a month; the 30-year settled at 5.327 percent. 235 Crude went the other way. Brent settled at $116.72 a barrel, up 3.1 percent on Friday and its highest close since April, and West Texas Intermediate at $103.27, up 3.8 percent, after reports that the United States and Israel were drawing up plans for renewed strikes on Iran once the November midterms are past. 14 The Cboe Volatility Index traded above 20 for the first time since early June. 1

What the week actually repriced

Thursday is the day to look at. The S&P 500 fell 1.21 percent, and 337 of its 500 members rose. The equal-weight index gained 0.8 percent. The PHLX Semiconductor Index fell 6.7 percent to its lowest since late July and is down 15 percent this month. 34
Meta supplied the trigger. The company reported third-quarter revenue of $64.60 billion, up 26 percent and above the $63.37 billion analysts expected, and guided fourth-quarter revenue to $73 billion to $76 billion, above consensus. It also narrowed full-year capital spending to $135 billion to $145 billion, from $130 billion to $145 billion. Daily active people across its apps came in at 3.64 billion, just below expectations, and the workforce fell 12 percent from the prior quarter to 66,000. The stock fell about 7 percent. 6 Lam Research had set the pattern the night before: the chip-equipment maker beat estimates, but its guidance only met them, and the shares fell almost 12 percent. 37
Wednesday had been the opposite. SpaceX reported a 161 percent rise in revenue to $14.58 billion, said its artificial intelligence business grew ninefold, and disclosed that the company and Tesla have formed committees to discuss a merger; the Nasdaq Composite rose 1.05 percent. 8 Tesla's own quarter, reported that evening, beat at 48 cents a share against 43 cents expected on revenue of $28.05 billion, with operating income down 56 percent and energy revenue down 16 percent. 8 Netflix had fallen more than 5 percent on Tuesday after guiding full-year revenue below forecasts and cutting its advertising revenue outlook. 8
Friday broke the pattern that had held through the week: the rotation into defensives stopped working. Consumer staples, utilities and health care all closed lower. 1 American Express fell more than 3 percent after saying it will cut about 5 percent of its global workforce to "prepare for AI," Caterpillar slipped about 2 percent and Goldman Sachs lost more than 1 percent. 1 Energy was the exception: ExxonMobil, Chevron and ConocoPhillips all traded at record highs, while uranium, nuclear and clean-energy funds sank to 52-week lows. 1 Telecoms also fell on a Bloomberg report that SpaceX is in talks to obtain access to at least 80,000 U.S. cell sites. 1
With more than 100 companies reported, third-quarter S&P 500 earnings are on pace to grow more than 32 percent from a year earlier, according to LSEG data. 7

Housing cracks, prices do not

The week's data said the economy is holding up and housing is not. The NAHB/Wells Fargo housing market index fell three points to 29 in October, its lowest since June 2012, with buyer traffic the weakest since April 2012 outside the pandemic's onset, as mortgage rates moved back above 7 percent. 9 September housing starts fell 5.2 percent to a 1.22 million annual rate, with single-family starts down 4.6 percent to 859,000, while building permits slipped 0.2 percent to 1.400 million. 1011 Pending home sales dropped 7.3 percent in September to an index of 66.0, a record low, with declines in every region and an 11.3 percent fall from a year earlier. 12
Labor looked steadier: initial jobless claims fell 6,000 to 194,000, the lowest since mid-July, while continuing claims rose 25,000 to 1.73 million. 4
Prices are the other half of the story. S&P Global's October flash survey put composite business activity at 57.6, down from 58.4 in September but still close to a five-year high, and the prices companies charge rose at the sharpest rate since August 2022. 13 The University of Michigan's final October sentiment index held at 48, down 10.4 percent from a year earlier, with one-year inflation expectations at 4.7 percent and the five-year measure at 3.5 percent. 1
Policy pricing moved the other way from the data. Fed funds futures put the chance of a hike at the October 28 meeting near 8 percent, against 31 percent a week earlier, and about 80 to 84 percent for December. The 2026 year-end forward rate sits at 4.10 percent, and the market's expected peak — September 2027 — at 4.52 percent, still above the Fed's own median projection of 4.125 percent. 3714

What matters next week

Next week is the busiest stretch of the reporting season, and it shares the calendar with the Fed. Alphabet and Microsoft report on Wednesday, hours before the policy statement, and Amazon on Thursday. 7 About one-third of the S&P 500 reports, including Intel and Sandisk on the memory side and Eli Lilly, Exxon, Chevron and Caterpillar elsewhere; Apple follows on November 2. 378
On the data side, Tuesday brings September durable goods orders, October consumer confidence and September new home sales; Thursday brings the advance estimate of third-quarter GDP, forecast at 3.0 percent, and the September PCE price index, expected a little higher. 314 The Treasury auctions 2-, 5- and 7-year notes, the European Central Bank and the Bank of Japan both meet, and the midterm elections arrive on November 3. 714
The frame to carry in: for two weeks the bond market was the thing pressing on stocks, and this week it let go. Equities fell anyway, because the selling moved from the debt behind the AI build-out to the spending itself. Guidance answers that question, not yields — whether the hyperscalers can show profit growing faster than the capital they are committing. 7

References

  1. 1
    Stock market news for Oct. 23, 2026

    cnbc.com

  2. 2
    U.S. 10 Year Treasury

    cnbc.com

  3. 3
    AI Pressure Persists, Oil Up as Price Data Looms

    schwab.com

  4. 4
    Stock market news for Oct. 22, 2026

    cnbc.com

  5. 5
    U.S. 30 Year Treasury

    cnbc.com

  6. 6
    Meta (META) Q3 2026 earnings report

    cnbc.com

  7. 7
    Wall St Week Ahead: Earnings flood, Fed meeting pose pivotal tests for rickety AI market rally

    reuters.com

  8. 8
    Stock market news for Oct. 21, 2026

    cnbc.com

  9. 9
    Stock market news for Oct. 19, 2026

    cnbc.com

  10. 10
    Stock market news for Oct. 20, 2026

    cnbc.com

  11. 11
    New Residential Construction

    census.gov

  12. 12
    Pending Home Sales

    nar.realtor

  13. 13
    S&P Global Flash US PMI

    pmi.spglobal.com

  14. 14
    MSD Weekly Market Update: Week Ending October 23, 2026

    fhlbny.com

US Market Week in 5
US Market Week in 5@Tom

This story was produced automatically by a channel. One sentence is all it takes for Neodrop to keep producing for you.

Related content