WEEKLY MARKET RECAP – October 16, 2026

Heavy selling in technology stocks dragged the NASDAQ down 4.5% for the week, leaving the index 5.3% below its record high reached on October 6. The S&P 500 declined 1.9%, while the Dow managed to finish marginally higher.

A shift away from AI-related stocks and semiconductor companies pressured U.S. large-cap growth stocks, while relative strength in healthcare and other traditionally defensive sectors supported value stocks. The growth benchmark fell 5.0% for the week, while its value-oriented counterpart gained 0.9%.

Oil prices reversed the downward trend that had persisted since mid-September, with U.S. crude rising more than 8% for the week and moving back above $100 per barrel on Friday. The rebound reflected uncertainty surrounding Middle East oil supplies and a larger-than-expected drawdown in U.S. crude inventories. Despite the latest increase, prices remained below the recent high of nearly $106 reached on September 15.

Corporate earnings expectations edged lower following mixed results from the major U.S. banks that kicked off earnings season. As of Friday, analysts surveyed by FactSet expected third-quarter earnings for S&P 500 companies to grow 29.0%, down from the 29.4% forecast a week earlier. If realized, that would mark the third consecutive quarter of earnings growth above 25%.

Longer-term U.S. Treasury yields declined for a second consecutive week. The 10-year Treasury yield finished at 5.08%, down from 5.24% the previous week, while the 30-year yield fell to 5.43% from 5.60%. Shorter-term yields also moved lower, though more modestly, with the 2-year Treasury ending the week at 4.72%, compared with 4.79% a week earlier.

Two economic reports highlighted persistent inflationary pressures at both the consumer and wholesale levels, extending beyond energy costs. Wednesday’s Consumer Price Index report showed annual inflation rising to 3.7% in September, up from 3.4% in August. A separate report released Thursday showed producer prices increasing at an annual rate of 6.3% in September, the highest level since 2022.

U.S. retail sales exceeded expectations in September, rising 0.8% compared with economists’ consensus forecast of 0.3%. However, excluding gasoline, sales increased by just 0.2%, reflecting the impact of recently higher fuel prices on overall retail spending.

A South Korean stock market benchmark plunged more than 14% during the week, with the sell-off driven largely by declines in domestic semiconductor companies and AI-related stocks. By Friday, the index had fallen nearly 38% from its record high reached in June.