Weekly Market Performance — October 23, 2026

LPL Research provides its Weekly Market Performance for the week of October 19, 2026. Stocks finished a volatile week mostly lower as AI-related funding and monetization concerns dominated market focus in up and down trading. Still, the pullback was more rotational than broadly risk-off, and the S&P 500 ended with just a moderate loss. Overseas, European stocks fell amid civil unrest and rising oil prices, while weak Chinese demand weighed on earnings. Asian equities slid for a fourth straight week. Meanwhile, core bonds rallied on a fresh haven bid while in commodities, oil surged late in the week as Houthi attacks in Saudi Arabia raised Middle East tensions. 

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 10/23/26 @ 2:56 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: Major averages tracked a mostly lower finish over the penultimate week in October after five days of volatile trading. In up and down sessions, markets started the week on a bright note as chipmakers snapped an eight-session losing streak before the space was pressured by their Asia-Pacific peers on Tuesday. Nonetheless, support returned following strong results from SpaceX (SPCX) and better-than-expected preliminary figures from Super Micro Computer (SMCI), reinforcing confidence in infrastructure demand. However, the quick bounce in sentiment gave way as more earnings rolled in. 

Disappointing guidance from Lam Research Corp (LRCX), reduced spending plans kindling questions about Tesla's (TSLA) AI efforts, and a spending hike paired with negative free cash flow from Meta (META) reignited funding and monetization concerns. Widening AI-related credit spreads subsequently added to selling pressure. The S&P 500 and Nasdaq dropped on Thursday, but the pullback was more rotational than broadly risk-off as roughly two-thirds of the S&P 500 advanced — powering roughly 2% in outperformance for the index's equal-weight variant. Defensive and rate-sensitive shares benefited, while higher crude prices were also a factor in cautious sentiment. AI selling pressure showed signs of easing by week's end and major averages paced mild weekly moves, although higher oil prices and weak breadth kept a lid on the bounce attempt. 

International Equities: European stocks dropped after contending with civil unrest, rising oil prices, and spillover from global technology selling. Cost-of-living protests pressured markets in France, Spain, and Italy early in the week before broadly positive earnings supported a mid-week rebound. But inflation and growth worries ultimately re-entered the driver's seat as crude prices and geopolitical tensions rose. Also on the earnings front, weak Chinese demand was a focal point after Hermès declined on soft Asia-Pacific sales, while Volvo reported a quarterly loss and announced job cuts, citing weakening demand for Western-made cars in China. Gucci-parent Kering also fell on slow Chinese sales.

Asian equities ended lower for a fourth straight week as the region remained sensitive to the AI trade. Financing concerns and elevated borrowing costs were in focus as U.S. earnings weighed on Japanese technology leaders, and a weak trading debut from data center infrastructure firm Elice added pressure in South Korea. Japan also faced headwinds as investors assessed hot inflation and stalling manufacturing growth. In Hong Kong, Lenovo’s refinancing and reports of a Huawei offshore loan added to funding worries for local firms, fueling underperformance for the Hang Seng. Mainland China also stumbled, entering a technical bear market as weak consumption and AI profitability concerns compounded year-to-date selling, before trimming losses as the “national team” stepped in Friday.  

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, measured by the Bloomberg U.S. Aggregate Index, rallied this week after catching a fresh haven bid amid the latest wave of jitters around global AI-related equities. The bond market benchmark posted its third straight weekly advance as bonds again demonstrated their diversification value. Despite elevated inflation, the 10-year Treasury yield fell 15–19 basis points Thursday to just below 5% as weakness in AI-related equities revived growth concerns. A similar move occurred the prior week, showing that duration can still provide an effective hedge when growth expectations deteriorate.  

A slowdown in AI-related corporate issuance has also provided a technical tailwind. After roughly $400–500 billion of related issuance this year, stress among leveraged data-center borrowers has slowed supply and reduced some crowding-out pressure on longer Treasuries. At the same time, credit differentiation among AI-related issuers is becoming increasingly important. And demand is still showing up. Treasury auctions this week cleared cleanly, though at yields that continue to offer meaningful real term premium.   

Bottom line, high-quality fixed income is again demonstrating its value as a portfolio diversifier as the AI trade has weakened, even with inflation still elevated. Markets continue to price additional Federal Reserve (Fed) rate hikes in 2027, but a meaningful deterioration in the growth outlook, particularly one driven by concerns about AI-related investment, could cause those expectations to be repriced and Treasury yields to decline. With yields above 5% across core fixed income sectors, investors are also receiving attractive income while retaining the potential for price appreciation if economic growth slows. 

Commodities and Currencies: The broader commodities complex traded moderately lower over the last five days. West Texas Intermediate (WTI) crude oil prices closed in on $103 per barrel while Brent topped $116 on a late week surge after Iran-backed Houthi militants claimed attacks in the Saudi Arabia port of Yanbu alongside deadly strikes on an oil field and an airport. Intensifying hostilities, calls for U.S. diplomats to evacuate the country, and reported post-midterm strike plans sent oil prices higher on worries that U.S. strikes could restart. Also in the energy complex, natural gas futures dropped roughly 15% amid rising inventory figures, improved export terminal flows, and milder winter weather forecasts. Elsewhere, gold prices tracked their worst week since June as rising oil strengthened the higher-for-longer case for rates. Silver also fell, and copper outperformed, but still edged lower on AI jitters. In currencies, the U.S. dollar was little changed, while the euro weakened and the yen strengthened. 

Economic Weekly Roundup

The U.S. economic calendar was relatively quiet this week with attention pulled forward to next Wednesday's Fed rate decision. Among the few highlights were October economic activity data and the University of Michigan consumer sentiment report which matched and topped estimates, respectively. Meanwhile, France remained a focal point for global economists and market watchers. Data released Friday morning suggested that France’s economy is losing momentum just as concerns over the government’s finances are intensifying. October’s composite Purchasing Managers' Index fell to 48.4 after briefly moving above 50 in September, while new manufacturing orders dropped to 44.9, their sixth straight month of contraction. This leaves growth barely positive while business activity has slipped back into contraction.  

The bigger challenge is that weak growth and fiscal strains are beginning to reinforce one another. Government debt is approaching 120% of GDP, political uncertainty is raising doubts about the path of future deficits, and investors are demanding a larger premium to hold French debt. Ten-year government yields have climbed above 5%, while the spread over German Bunds has widened sharply. If interest rates remain above the economy’s nominal growth rate, it can no longer rely on growth and inflation to help stabilize its debt burden. France is running out of fiscal room, and as the fourth largest weight in the developed international equity benchmark, it's weighing on European benchmarks.  

The Week Ahead

The following economic data is slated for the week ahead: 

• Monday: Chicago Fed National Activity Index (Sep), Dallas Fed Manufacturing Activity (Oct) 
• Tuesday: ADP Weekly Employment Change (Oct 10), Durable Goods Orders (Sep preliminary), Capital Goods Orders and Shipments (Sep preliminary), FHFA House Price Index (Aug), S&P Case-Shiller 20-City and U.S. Home Price Index (Aug), Conference Board Consumer Confidence report (Oct), Richmond Fed Manufacturing Index (Oct), New Home Sales (Sep), Dallas Fed Services Activity (Oct), Building Permits (Sep final) 
• Wednesday: MBA Mortgage Applications (Oct 23), Advance Goods Trade Balance (Sep), Retail Inventories (Sep), Wholesale Inventories (Sep preliminary), FOMC Rate Decision (Oct 28) 
• Thursday: Personal Income and Spending (Sep), Headline and Core PCE Price Index (Sep), Initial Jobless Claims (Oct 24), Continuing Claims (Oct 17), Gross Domestic Product (3Q first reading), Personal Consumption (3Q first reading) 
• Friday: Employment Cost Index (3Q), MNI Chicago PMI (Oct)