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October 12, 2026
Good afternoon,
Markets
For the week ending 10/9/2026:
- The S&P 500 increased 1.2% to close at 7,811.54.
- The yield of the 10-year Treasury bond decreased from 5.28% to 5.24%.
- Oil increased from $91.11 to $91.85.
- The CBOE Volatility Index (VIX) decreased from 15.31 to 14.84.
- U.S. dollar currency exchange rates were:
- EUR/USD: 1.12 (USD stronger from a week ago)
- GBP/USD: 1.32 (USD weaker from a week ago)
- USD/JPY: 158.06 (USD stronger from a week ago)
Market Headlines
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Market Record Highs: U.S. stocks finished higher for the week, with the S&P 500 and Nasdaq reaching record closing highs on Tuesday. The S&P 500 gained approximately 1.2% for the week, while the Nasdaq gained 0.6%, supported by strength in technology stocks and growing optimism ahead of third-quarter earnings season. A slight decline in Treasury yields and a pullback in oil prices early in the week helped drive the gains, although renewed concerns about inflation and persistently high borrowing costs contributed to some midweek volatility.
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Consumer Sentiment Drops: Friday’s Consumer Sentiment report showed consumer confidence falling to its lowest level in five months amid persistent concerns about inflation and the rising cost of living. The University of Michigan’s preliminary October reading came in at 46.3, down from September’s final reading of 48.1 and August’s 51.7. While the index remains above its record low of 44.8 set in May, the continued decline highlights growing consumer frustration with elevated prices and borrowing costs.
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Earnings Season Ahead: Third-quarter earnings season is set to begin in the coming weeks, and analysts expect the S&P 500 to deliver a third consecutive quarter of earnings growth exceeding 25%. According to FactSet, current consensus estimates call for approximately 29.5% year-over-year earnings growth for the index. Energy, information technology, and communication services are expected to be among the largest contributors to profit growth, while continued investment in artificial intelligence remains a key driver of earnings expansion, particularly within the technology sector.
Key Takeaway
As we enter earnings season, investors should pay close attention to what companies are saying about Artificial Intelligence (AI) and how it is translating into earnings growth. Since the current bull market began in October 2022, more than two-thirds of the S&P 500’s advance has been attributed to rising corporate earnings, with AI playing an increasingly important role in driving profits and investor optimism. In 2026, significant investment in AI infrastructure, including semiconductors, data centers, and cloud computing, has helped support technology stocks and drive broader market gains. Companies such as Nvidia and other semiconductor leaders have benefited from surging demand for the computing power needed to develop and operate AI systems, while major technology firms continue to invest billions in expanding their AI capabilities.
Looking ahead, the market’s continued advance will increasingly depend on whether companies can translate these investments into sustainable revenue growth, improved productivity, and stronger profits. As earnings reports are released, investors should look beyond headlines about AI spending and focus on management commentary regarding demand, profit margins, and expected returns on investment. Ultimately, these details may help determine whether AI-driven optimism is supported by tangible business results and can continue to sustain the market’s upward momentum.
The Week Ahead: October 12 – 16
- Monday: No major reports scheduled
- Tuesday: Federal budget, Existing homes
- Wednesday: Consumer Price Index (CPI)
- Thursday: Producer Price Index (PPI), Retail sales, Wholesale inventories, Initial jobless claims
- Friday: Industrial production and capacity utilization, Export and import prices
Until next week,
Weller Financial Group
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