Markets In Focus: The Week That Was and What’s On Tap
THE WEEK THAT WAS
The S&P 500 advanced 1.2%, the Nasdaq Composite gained 0.6%, and the Russell 2000 declined 0.9%, as large-cap resilience offset small-cap weakness amid a volatile week.
Geopolitical tensions in the Middle East dominated, with Iranian attacks on vessels in the Strait of Hormuz and Houthi strikes on Saudi Arabia driving oil prices higher—Brent briefly above $105 and WTI near $92—before easing Friday after President Trump stated the U.S. would not attack Iran before the November midterms, citing productive talks. Hurricane Isaias also disrupted Gulf of Mexico production, adding supply pressure. These energy swings amplified inflation concerns and contributed to bond market volatility, with the 10-year Treasury yield holding near 5.24%, its highest levels since 2002.
Economic data underscored sticky price pressures. The September ISM Services PMI eased to 54.9 (from 55.4), remaining in expansion for a 27th straight month, but the Prices Index surged to 74.0, a multi-year high. FOMC minutes from the September meeting confirmed the unanimous 25-basis-point hike to a 3.75–4.00% funds rate range and showed most participants saw another increase as likely appropriate by year-end, citing upside inflation risks from energy, services, and AI-related investment. Preliminary University of Michigan consumer sentiment for October fell to 46.3 (near recent lows), with current conditions at an all-time low of 44.7 and year-ahead inflation expectations rising to 4.7%.
Earnings were sparse. Delta Air Lines reported an EPS miss tied to elevated fuel costs despite a revenue beat. Humana jumped over 11% on strong Medicare Advantage quality ratings. Tech faced pressure, including Apple declines on reports of iPhone 18 component production cuts amid high memory costs, while a SpaceX low-band spectrum acquisition weighed on telecoms. Midweek selling in AI-related names reflected sensitivity to valuation and borrowing concerns, though Friday’s rebound helped major indexes close near record territory as VIX eased.
THE WEEK AHEAD
Stocks head into the new week near record territory. The S&P 500 printed its first-ever close above 7,800 on October 6, rising 0.58% to 7,818.93. The question now is whether earnings and inflation data can support those levels.
Third-quarter earnings season starts Tuesday with the big banks. JPMorgan, Goldman Sachs and Citigroup report Tuesday, with BlackRock on Wednesday, Wells Fargo is expected Tuesday, and Bank of America and Morgan Stanley report Wednesday before the open. Investors will look for clues on consumer health, credit quality and dealmaking. Domino’s and Albertsons also report Tuesday, and SLB closes out the week Friday.
On the economic front, September CPI arrives Wednesday morning, followed by September PPI and retail sales on Thursday. These reports carry extra weight. The Fed raised rates to 3.75% to 4.00% in September, and minutes released this week showed most officials see another hike by year end as likely. Softer recent data cut the odds of an October hike to about 17%, while December hike odds sit near 84%. A hot CPI could change that math quickly. Note that the bond market is closed Monday for Columbus Day.
Geopolitically, the Iran conflict remains the wild card, since rising inflation tied to the Iran war has been a key driver of higher Treasury yields. Any oil spike would complicate the Fed’s job. Finally, the Fed’s October meeting falls less than a week before the midterm elections, so expect headline-driven volatility to build.
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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.
