Weekly Market Insights
October 23, 2026 Volume 13 Issue 41
U.S. equity leadership extended beyond the largest companies, with small caps and equal-weighted stocks outpacing the S&P 500 and value leading growth. Healthcare and Energy led sectors, while Communications trailed. Internationally, developed markets outperformed emerging markets. Longer-maturity bonds and municipals led fixed income, with investment-grade credit ahead of high yield and longer-dated Treasuries yielding more than short-term issues. Oil led commodities, and listed private equity paced alternatives.
AI investment continued to support healthy U.S. growth, even as college graduates faced difficulty finding entry-level white-collar work. Third-quarter S&P 500 earnings growth was estimated at 33.9% year over year, although Meta’s capital-spending forecast intensified scrutiny of whether expanding AI outlays would deliver sufficient returns. The buildout also added inflation pressure through demand for chips, electricity, and construction materials, highlighting supply constraints accompanying the investment boom.
Markets anticipated a Fed pause following senior officials’ comments, although Chair Warsh avoided signaling decisions in advance. Higher rates raised financing costs but offered limited relief for shipping and chip bottlenecks. Heavy Treasury-bill issuance to fund the deficit tested demand, lifting bill yields without disrupting overnight funding. In France, fiscal and political concerns widened sovereign spreads, pushing borrowing costs above nominal growth and tightening financial conditions.
AI’s expanding capital requirements sharpened questions about financing and profitability for leveraged developers, while cash-generating technology leaders retained flexibility. Headline indexes masked divergent experiences as AI-related and other stocks increasingly moved in opposite directions. Meanwhile, the Iran conflict fragmented oil markets: elevated freight costs constrained regional flows, leaving Europe and East Asia paying more than the Americas.
Have a great week!
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*All economic release data referenced from public sources believed to be accurate. *The source of data for all charts/graphs included in this presentation is Bloomberg LP. *Figures quoted represent monthly changes (m/m) and are seasonally adjusted.