WEEKLY MARKET RECAP – October 23, 2026

The S&P 500 and NASDAQ finished the week with modest declines following several sharp daily moves and a shift in market momentum. Small rallies on Monday and Wednesday were offset by Thursday’s pullback, as continued weakness in technology stocks weighed on the broader market.

The recent sell-off in the bond market continued to subside, with the 10-year U.S. Treasury yield falling below 5.00% on Thursday for the first time in about a month before edging higher to close at that level on Friday. On October 5, the yield had reached approximately 5.34%, its highest level in more than two decades.

Bond market activity reinforced expectations that the U.S. Federal Reserve would leave interest rates unchanged at the policy meeting concluding Wednesday. As of Friday afternoon, rate futures indicated a 90% probability that the Fed would hold its benchmark rate steady on October 28, according to CME FedWatch. However, markets assigned a probability of more than 70% to a quarter-point rate hike at the Fed’s early December meeting, along with a 7% chance of a larger half-point increase.

About one-quarter of the way through earnings season, a small group of mega-cap technology companies was still expected to account for a disproportionate share of overall earnings growth, although its contribution was projected to be less dominant than in recent quarters. According to FactSet, analysts expected the Magnificent Seven stocks to report average third-quarter earnings growth of 33.2%, compared with a projected 27.7% for the remaining 493 companies in the S&P 500.

Oil prices fluctuated sharply throughout the week. U.S. crude climbed to nearly $104 per barrel on Monday, dropped below $98 on Wednesday, and rebounded to more than $103 by Friday afternoon. At that level, oil had gained approximately 12% over the preceding two weeks.

Heavy selling in technology stocks on Thursday drove the NASDAQ to its steepest single-day decline since June, with the index falling 2.6%. The drop followed a 4.5% decline over the previous week. By Friday’s close, the NASDAQ stood approximately 6.0% below the record high it had reached just two and a half weeks earlier.

Performance diverged significantly across market capitalizations and investment styles. A U.S. small-cap benchmark gained 2.0% for the week, while its large-cap counterpart declined 0.4%. Value stocks also outperformed growth stocks, with the value benchmark rising 0.7% while the growth benchmark fell 1.5%.

Beyond another round of quarterly earnings reports and Wednesday’s conclusion of the Federal Reserve’s policy meeting, investors will focus on Thursday’s preliminary government estimate of third-quarter GDP growth. Thursday will also bring an updated reading on monthly inflation through the Personal Consumption Expenditures Price Index.