Markets In Focus: The Week That Was and What’s On Tap
THE WEEK THAT WAS
U.S. equities navigated a volatile week as investors balanced higher oil prices, rising Treasury yields and a shift in Federal Reserve policy against continued strength in the economy and corporate earnings. The S&P 500 eked out a gain of 0.50% while the Dow had declined 1.41%, and the technology-heavy Nasdaq leading the way advancing 1.75%.
The week’s most significant development came from the Federal Reserve, which raised its benchmark interest rate by 25 basis points. Importantly, the Fed continues to see a relatively healthy economy, projecting 2026 real GDP growth of 2.3% and unemployment of 4.1%. Inflation remains the primary concern, however, with the Fed now projecting headline PCE inflation of 3.7% and core inflation of 3.4% for 2026. Policymakers’ median projection puts the federal funds rate at 4.1% at year-end, reinforcing expectations that monetary policy could remain restrictive for some time.
Energy prices and interest rates were the other major drivers of markets. Concerns surrounding Middle East supply disruptions pushed oil as high as roughly $110 per barrel during the week, contributing to renewed inflation fears and sending the 10-year Treasury yield to levels not seen since 2007. Oil subsequently retreated toward $103 as concerns over Saudi supply disruptions eased, allowing both bonds and equities to stabilize. By Friday afternoon, however, the 10-year Treasury yield had moved back toward 5%, highlighting the continued sensitivity of financial markets to inflation and interest-rate expectations.
THE WEEK AHEAD
Markets enter the week digesting the FOMC’s 25bp hike to 3.75%–4.00%, delivered unanimously on 9/16, the first increase since 2023. Expect continued repricing in rate-sensitive sectors (housing, small-caps, high-multiple tech) as the curve adjusts.
On the data front, flash Manufacturing and Services PMIs (Tuesday) will be scrutinized for early signs of tightening feeding through to activity. Durable goods orders and the third estimate of Q2 GDP (Thursday) round out the growth picture, while weekly jobless claims remain the timelier gauge on labor resilience. New and existing home sales will show early housing-market response to higher-for-longer financing costs.
Corporate earnings are sparse this week as Q2 reporting season winds down, but bellwether prints from Costco, General Mils and homebuilders KB Homes and DR Horton offer good economic read-throughs. We will get good idea how rising interest rates may be affecting housing and the strength od the consumer.
Geopolitically, elevated energy prices remain the swing factor behind sticky inflation; any escalation in Middle East or Russia-related supply disruptions could reinforce the Fed’s hawkish tilt and pressure multiples further. Net: a data- and Fed-speak-heavy week with limited earnings catalysts, expect rate-driven, rather than fundamentals-driven, price.
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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.
