October 5, 2026

2026-10-05
By admin83
Posted in Uncategorized

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
Peter Lynch

US equities finished mixed for the week. A soft September jobs report lifted stocks on Friday and took a near-term Fed hike mostly off the table, but it was not enough to erase Monday-through-Wednesday damage from a 10-year Treasury yield that touched its highest level since 2002. The Nasdaq managed a small weekly gain and set a record high on Friday. The Dow posted its fourth losing week in five. Oil settled back near $91.

So, what happened?The week opened with the bond market still in charge. Monday the 10-year jumped back to 5.23% and stocks sold: the S&P 500 fell 0.8% to 7,683.69, the Dow lost 0.7% to 51,481.51, and the Nasdaq dropped 0.9% to 26,820.38. Nvidia’s buyback was not enough. Tuesday was a drift lower — S&P −0.2% to 7,670.84 — as the 10-year touched 5.25%. Wednesday the long bond made the real headline: the 10-year spiked to 5.34%, a 24-year high, and the selloff rippled through France, Britain, and Japan. Thursday the yield backed off that high and stocks stabilized, the S&P finishing near 7,666, helped by semiconductors after Micron. Energy lagged.

Friday was the jobs report, and it changed the tone. The S&P 500 rose 56.27 points, or 0.7%, to 7,722.72, about 1.2% below its August 13 record of 7,798.99 and within 1% of the high on some measures of the recent range. The Dow added 250.40 points, or 0.5%, to 51,176.96, still down 652 points on the week. The Nasdaq gained 319.27 points, or 1.2%, to 27,190.86, a record close, up 122 points on the week. The Russell 2000 rose 0.9% Friday to 2,832.90 and nearly erased its weekly loss. Treasury yields fell at the open, then retraced most of that drop as oil recovered an early swoon. WTI settled at $91.11, down 1.6% on the week from $92.41. Information technology led Friday; health care was the only S&P sector in the red. Year-to-date the S&P 500 is up 12.8%, the Dow 6.5%, and the Nasdaq 17.0%.

Overseas,Foreign stocks had a harder week than the Friday bounce suggested. Europe closed Friday higher — Germany’s DAX rose about 1.2% to 25,231, France’s CAC gained about 0.8% to 7,897, and the FTSE 100 added 0.3% to 10,462 — but that was a recovery from a bond-led selloff earlier in the week, not a new high. In Asia, Japan’s Nikkei fell 0.9% Friday to 68,309, its first down day in three, and Hong Kong’s Hang Seng dropped 2.6% to 23,972. The multi-year case for foreign equities has not changed. This week they just paid more of the yield bill.

What’s the FED up to?No meeting. The funds rate is still 3.75%–4.00% after the September hike, and the dots still show most officials looking for one more move this year. What changed is the market’s confidence in that move. Into Thursday, with the 10-year at a 24-year high, October was live. Friday’s payroll miss cut the odds of a 25-basis-point hike on October 27–28 to about 23%, from 64% a week earlier. Two Fed officials had already said this week they wanted more data before the next decision. December 8–9 is still on the calendar if inflation does not cooperate. A 5.2% 10-year is doing some of the tightening for them.

In Economic news,Two numbers mattered. Wednesday’s August PCE was cooler than feared on the monthly core: headline PCE rose 0.3% and 3.4% year-over-year; core rose 0.2% and 3.0% year-over-year. A methodology change took a few tenths off the year-ago core reading versus the prior estimate. Spending was not cool, personal consumption jumped 0.9% in current dollars and 0.6% in real terms. Second-quarter GDP was revised up to a 2.2% annual rate. Then Friday’s employment report: payrolls rose 29,000 versus about 90,000 expected. July was revised to 10,000 and August to +133,000 from +162,000, a combined 60,000 downward revision. The unemployment rate ticked up to 4.2% from 4.1% as more people entered the labor force. Average hourly earnings rose 0.1% on the month and 3.0% year-over-year, the slowest since 2021. Jobless claims the prior Thursday were still 197,000. That is a labor market cooling through slower hiring, not a wave of layoffs, and an inflation rate still a full point above the Fed’s target.

In the housing market and mortgage rates news.Mortgage rates took the bond move personally. Freddie Mac’s survey for the week ending October 1 put the average 30-year fixed rate at 7.28%, up 25 basis points from 7.03% — the largest weekly jump in about four years and the highest in nearly three years. The 15-year fixed rose to 6.60% from 6.42%. A year ago the 30-year was 6.34%. The 30-year has climbed 63 basis points in six weeks, from 6.65% on August 20. Purchase applications fell again. Last week’s new-home sales bounce (684,000 in August) was builders using price cuts; a 7.28% 30-year is a different affordability problem for existing homes. Demand still shows up when rates ease. They did the opposite this week.

So, in summary,We still hold that the longer-term consensus on U.S. equities is still moderately good, and Friday’s jobs miss gave that view a near-term assist. The Nasdaq closed at a record. Earnings and AI infrastructure spend remain the bull case. The risks did not go away. The S&P 500 and the Dow both finished the week lower, the fourth down week in five for the Dow. The 10-year spent Thursday at a level last seen in 2002 and closed the week still above 5%. The 30-year mortgage is 7.28%. WTI settled at $91, off the $100 handle but not cheap, and Hormuz is still a negotiation, not a reopening. Core PCE is 3.0%. We share the constructive longer-term view. We are not going to treat a soft payroll print as an all-clear while the 10-year is north of 5%. What would make us more bullish in a hurry is the same list as last week, plus one new item: a genuine Hormuz reopening that sticks, a run of cooler inflation, and a labor market that cools without cracking. Until then we stay balanced and selective.

Mike

October 5, 2026

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