To The Moon

On Fri, 23 Oct 2026, US stock markets ended lower as the technology sell-off from earlier in the week spread across the broader market.

By the time market called it a week:

• DJIA: rose marginally by +0.46% (+237.06 to 52,215.16). Best performing index of the week.

• S&P 500: fell by -1.03% (-79.09 to 7,623.68). Posted 18 new 52-week highs and 8 new lows.

• Nasdaq: fell by -1.67% (-439.94 to 25,955.34). Declining issues outnumbered advancers by a 1.57-to-1 ratio. Worst performing index of the week.

• Volume on US exchanges was 15.4 billion shares, compared with the 17.2 billion average over the last 20 trading days.

Technology shares steadied somewhat to end a turbulent week for the market-driving AI trade, and investors looked ahead to a busy slate of corporate earnings and a Fed interest-rate policy meeting.

Market focus remains on the earnings season, with robust corporate profit growth underpinning gains for major equity indexes this year.

According to LSEG IBES data, S&P 500 companies are on track to have increased earnings by more than +32% in Q3 2026. Could this really be true ?

This week, about ⅓ of S&P 500 companies will report their Q3 results.

This includes : $Apple(AAPL)$, $Microsoft(MSFT)$ & $Amazon.com(AMZN)$ - 3 AI hyperscalers whose capital spending forecasts will be closely watched on Wall Street.

Last week’s market primary catalysts.

Surging Oil & Geopolitical Fears:

• Brent crude jumped +3.1% to $116.72 per barrel, its highest settle since April 2026. (see above)

• This comes about following fresh Houthi attacks on Saudi oil infrastructure and rising US-Iran tensions.

• All these stoked major inflation worries and pushed the 10-year Treasury yield up to 4.99%.

AI Capex Fatigue & Stalled IPOs:

• Lingering concerns that major tech firms might scale back future AI infrastructure spending continued to weigh on the market.

• Investor anxiety deepened as $SK hynix(SKHY)$ unexpectedly scrapped its US IPO plans for its Solidigm flash-memory subsidiary, citing fragile market conditions.

SpaceX Wireless Disruptor:

• Report that $SpaceX(SPCX)$ is seeking thousands of cell sites to launch a wireless carrier triggered a massive sell-off in telecom majors; AT&T and T-Mobile both plunged nearly -8%, dragging down the communication services sector.

US Economic Reports.

For the whole of last week, the few pertinent economic reports released includes:

• Tue, 20 Oct 2026 - US pending home sales.

• Thu, 22 Oct 2026 - US jobless claims.

• Fri, 23 Oct 2026 - US Flash manufacturing & services PMI.

• Fri, 23 Oct 2026 - Final Consumer Survey.

US Pending Home Sales.

For September 2026, the National Association of Realtors (NAR) Pending Home Sales report represents an exceptionally weak report on a monthly basis and YTD basis. (see above)

Pending home sales tumbled -7.3% MoM vs August 2026’s +0.3% vs analysts’ consensus of -0.7% - a severe drop that heavily missed the consensus economist forecast.

On a year-over-year (YoY) basis, contract signed plummeted -11.3%, erasing August 2026’s marginal gains (+0.3%),

More important, report exhibits structural weakness across all four major geographic US regions, revealing that the market is in a deep freeze rather than a soft landing.

Prospective buyers are completely frozen out by macro headwinds, rendering 2026 one of the most depressed years for real estate volume on record.

The collapse was triggered by a rapid bond-market sell-off that pushed the average 30-year fixed mortgage rate up to 7.40%.

Data confirms that fast-rising borrowing costs are actively overriding the supportive economic pillars of solid job growth and rising incomes.

In an attempt to salvage the mess created by him, Trump signed an executive order that aims to reduce mortgage costs as rising interest rates & inflation make homeownership less affordable.

His executive order directs federal agencies to proactively cancel mortgage insurance on eligible future loans and expand a program to make refinancing cheaper, among other actions.

On surface, the fire-fighting is focus and targetted to bring relief.

As accorded by mortgage website HSH, VP, Keith Gumbinger:

• It will be difficult to know the future consumer impact without more details.

• Also, how this enactment will impact businesses across the board subsequently.

US Jobless claims.

Latest reports reveal a more complex dynamic under the surface of the US labour market.

Overall it is a strong report regarding job security, but a sluggish one when it comes to hiring.

US economists are still labelling the current economic climate as a “low-hire, low-fire” labour market.

Weekly jobless claims.

For week ending 17 Oct 2026, weekly claims dropped by -6,000 to 194,000, beating consensus expectation of 200,000 and previous week’s upwards revised 200,000. (see below)

This marks the 6th consecutive week that weekly claims have remained at or below the 200,000 threshold, hovering near 57-year lows (just off the multi-decade record low of 189,000 set in 23 Jul 2026).

The 4-week moving average dropped by -1,000 to 197,750, matching its lowest level since 1969. It confirms that the downtrend in layoffs is structurally sound rather than a weekly anomaly.

Continuing claims.

In contrast, continuing claims for week ending 10 Oct 2026, rose by +25,000 to a 6-week high of 1.728 million.

This increase exceeded the market expectation of 1.720 million and is +1.47% higher than previous week’s downwards revised 1.703 million.

Reconciliation between weekly and continuing claims reports.

While weekly claims have dipped, American workers who lost their jobs are taking noticeably longer to find new employment.

This aligns with September 2026 data showing the median duration of unemployment sitting near a 4½ year high of 11½ weeks.

From a policy standpoint, the combination of low layoffs and an unemployment rate hovering around 4.2% gives US Fed, ample breathing room.

The job market looks strong. However, wage growth is slowing and hiring is weak, so the labour market is not currently pushing up inflation.

This reinforces expectations that the Fed can afford to take a measured stance - without needing to change interest-rate policy quickly or aggressively at its next FOMC meeting, taking place on Oct 27-28.

US Flash Manufacturing & Services PMI.

The preliminary October 2026 data released in the S&P Global Flash US PMI report indicates that US economy continues to expand at the start of Q4 2026.

According to S&P Global Market Intelligence, the data suggests US economy is currently expanding at a robust annualized GDP growth rate of roughly 5.0%.

However, booming demand has been met with an equal steep resurgence in price pressures and supply chain bottlenecks.

Manufacturing PMI

The manufacturing sector demonstrated unexpected resilience, showing that the sector is expanding at its fastest pace in years.

October 2026’s preliminary manufacturing PMI rose to 56.0, up from September 2026’s 55.9 and outperformed market consensus of 55.5 to hit a 53-month high. (see above)

Factory hiring surged to its highest level since March 2012, as firms scrambled to build capacity to handle order backlogs.

Precautionary stock-building and resilient domestic orders kept factory floors highly active.

Supplier delivery times lengthened significantly, dropping to a 4 year low of 38.1 (readings below 50 indicate slower deliveries), pointing to severe supply chain bottleneck.

Services PMI.

The Services Business Activity Index registered at 57.9, in lined with market consensus but cooled slightly from September 2026’s 58.8 but remained heavily entrenched in expansion territory.

New business pipelines accelerated to their fastest pace since March 2022, supported by robust domestic consumer activity and the strongest showing for service export orders since mid-2023.

The catch though is input costs climbing sharply, driven by higher fuel prices, rising wages, and increased utility and insurance premiums.

Rising costs & Stagnant growth ?

Despite the dual pressures of (a) higher interest rates and (b) Middle East geopolitical uncertainty, US economy shows little to no signs of fracturing.

Strong corporate profits, resilient labour markets, and robust consumer demand are sustaining a powerful growth phase that mimics a post-pandemic boom.

However, prices are rising sharply, hurting both company profits and shopper budgets.

The S&P Global index, a key business tracker hit 59.8, its highest point since August 2022.

Because shipping delays make goods scarce, companies can easily cover rising fuel & labour costs by passing them to customers.

Consumer Sentiments.

The last report for the week was US Consumer sentiments.

The October 2026 report is historically weak but slightly beat near-term expectations.

Headline Consumer Sentiment Index landed at 48.0, falling marginally below September 2026’s 48.1 and topping preliminary October estimate of 46.3 and beat economist consensus; just before the consequential midterm elections on 03 Nov 2026.

Overall, it stands as a 5-month low and the 2nd lowest reading in the 74-year history of the survey, eclipsed only by May 2026’s all-time low of 44.8.

According to Surveys of Consumers, Director, Joanne Hsu:

• Purchasing power continues to dominate consumer views of the economy.

• Sentiment is -10% YoY and -15% lower than February 2026’s 56.6, just before the Middle East war.

• Consumers broadly expect inflation to accelerate, and 2026’s increases in inflation expectations are not limited to one part of the political spectrum.

• Aggregate consumer spending has been relatively resilient despite negative views of the economy provides another reason for caution.

• If part of consumption currently reflects precautionary spending to avoid future price hikes, disinflation may be even more difficult to achieve.

The sentiments report comes in advance of the FOMC October 2026’s policy meeting before US midterm elections.

Based on the latest CME Fedwatch tool, US Fed is not expected to raise interest rate in the coming meeting. (see below)

• CME FedWatch, that tracks the likelihood of certain monetary policy decisions, forecasts an 90.5% chance that rates will remain status quo.

My viewpoints: (mine only)

This week will show whether the mega caps’ stocks’ corporate earnings can justify high stock valuations while inflation and borrowing costs remain elevated.

Investors should be watching whether massive, escalating artificial intelligence (AI) infrastructure capital expenditures (capex) are actually translating into revenue.

This as soaring capital expenses are beginning to pressure corporate cash flows and profit margins.

In other words, be prepared to run for the hills - agree?

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