Asset Management Weekly Market Commentary

Market updates for the week ending
October 23, 2026

Key observations

• Optimism surrounding a recovery in the AI trade early in the week faded but the S&P 500 information technology sector ultimately managed to finish the week with a modest gain as money rotated into software stocks. Encouragingly, both the equal weight S&P 500 index and the S&P Small Cap 600 index have fared much better thus far in October, evidence that outside of the AI arena, things aren’t as bad as they might appear given less constructive headlines. This too shall pass and we view the current ills facing the technology sector as a healthy, albeit painful recalibration of expectations that could put the sector on firmer footing into year-end.
• Abroad, it was a tough week for both developed and emerging markets with both the MSCI EAFE developed markets index and the MSCI Emerging Markets index posting losses of over 1%. For developed markets there were few places to hide as Europe, Japan, and the U.K. each posted a weekly decline, with broader Europe’s almost 2% drop notable. Within emerging market indices, Latin America and South Korea held up best, while India and Taiwan were notable drags on the broader MSCI EM index.
• Treasuries caught a safe-haven bid as news that countries were pulling diplomats and workers from the Middle East led to concerns surrounding escalation in the ongoing conflict there. The closely watched 10-year Treasury yield fell 7-basis points on the week to finish with a yield of 5.0%, the lowest closing yield on that bond tenor seen in over a month. The now over 25-basis points drop in the 10-year yield so far this month has boosted spirits and improved sentiment surrounding the prospects and outlook for higher quality bonds. The 10-year yield, specifically, tested the 4.95% level last week, which was where yields broke out to the upside last month, and this area could act as a floor for yields and cap the recent rally in longer-dated bonds.

What we're watching this week

• The Conference Board releases its October Consumer Confidence survey on Tuesday, with the reading expected to fall to 80.5 from 81.9 in September.
• The Federal Open Market Committee (FOMC) concludes its two-day meeting on Wednesday and is expected to leave the Fed funds rate unchanged at this meeting, with the futures market currently pricing in a 25-basis point rate hike at the FOMC’s December meeting.
• September Personal Consumption Expenditure (PCE), the FOMC’s preferred inflation gauge, is released Thursday. Headline PCE is expected to have risen 0.5% month over month and 3.6% year over year, which would compare to 0.3% and 3.4% readings in August. Core PCE, which is more closely monitored by policymakers, is expected to rise 0.3% month over month and 3.1% year over year, which would also be modest upticks from 0.2% and 3.0% readings the prior month.