Markets In Focus: The Week That Was and What’s On Tap
THE WEEK THAT WAS
U.S. stocks finished the week ending October 2 mixed. The S&P 500 fell 0.3%, the Nasdaq Composite rose 0.5%, and the Russell 2000 slipped 0.2%. Friday’s rebound repaired part of an earlier selloff but was not enough to lift the broad market or small caps into the green.
The tape was set by rates and geopolitics before the jobs report arrived. President Trump rejected an Iranian proposal to reopen the Strait of Hormuz, crude jumped, and the 10-year Treasury yield touched about 5.33%, a multi-decade high, before easing. Energy held up; rate-sensitive groups and most cyclical sectors lagged. Technology was the clear relative winner for the week.
August inflation was the other midweek catalyst. Core PCE rose 3.0% year over year, below the 3.3% consensus, helped by methodological revisions. That, plus comments from New York Fed President John Williams that he saw no urgency for another hike, began to pull October rate-hike odds down from the mid-60s. ISM manufacturing stayed in expansion at 54.5, but the prices index jumped to 77.9, a reminder that goods inflation tied to energy is still live.
Friday’s September employment report did the rest of the work. Payrolls rose only 29,000 versus expectations near 90,000. July and August were revised down by a combined 60,000, the unemployment rate ticked up to 4.2%, and average hourly earnings rose 3.0% year over year. October hike odds fell to the low-20s. Yields initially dropped, the Nasdaq touched an intraday record, and semiconductors led.
Company news cut both ways. Tesla rose about 5% on stronger-than-expected third-quarter deliveries. Micron and Accenture beat, supporting the AI and services tape. Nike fell after warning on China demand. The week’s message was straightforward: softer labor and a cooler core PCE bought equities a reprieve, but oil, the long end, and Hormuz kept the cost of capital elevated.
THE WEEK AHEAD
It’s a quiet week on the data front. ISM Services PMI (Oct 5) is the only release of real consequence, offering a read on whether the consumer-facing side of the economy is still expanding at a healthy clip. FOMC minutes from the September meeting (Oct 7) round out the calendar; worth a skim for color on the committee’s internal debate, but unlikely to move the needle on its own. Outside of that, it’s a light week for scheduled data.
Earnings take center stage. PepsiCo (Oct 8, pre-market) is the headline consumer-staples print, with investors focused on North American volume trends, pricing elasticity, and whether margin guidance holds up against a cautious consumer backdrop. Constellation Brands reports in the same window, with beer segment depletions and any read-through on Elliott’s push for strategic change (bottling spin-off, portfolio focus) the key swing factors. Delta Air Lines kicks off the airline read-through as data on fares, corporate travel demand, and Q4 capacity guidance will set the tone for the sector heading into the holiday travel season.
The more interesting print, though, is AEHR Test Systems. As a small-cap semiconductor test/burn-in supplier tied to hyperscaler capex, AEHR has become a useful bellwether for AI infrastructure demand beneath the mega-cap layer, as order momentum here (particularly around its Sonoma platform) will be watched as a gauge of whether the AI capex cycle is still broadening out or concentrating among the largest players.
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The S&P 500 generally represents performance of 500 large companies listed on exchanges in the U. S. It is one of the most commonly followed equity indices. The Nasdaq Composite Index is a market-weighted index that measures the performance of more than 3,000 common equities listed on the Nasdaq Composite Market. The Russell 2,000 Index is a market-cap weighted index that measures the performance of approximately 2,000 of the smallest companies in the Russell 3,000 Index. The MSCI ACWI captures Large and Mid-Cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,921 constituents, the index covers approximately 85% of the global investable equity opportunity set. FactSet Research System is a financial data and software company that provides research for Wall Street professionals and individual investors.
