Market View: Week of Oct. 9, 2026
ECONOMIC REVIEW¹
The Institute for Supply Management (ISM) Services Index fell to 54.9 in September from 55.4 in August, as the services sector continued to grow, though at a slightly slower pace. Readings above 50 indicate expansion.
New orders remained strong at 59.8, while employment returned to growth following two months of contraction.
However, the prices paid index rose to 74.0, its highest level since July 2022, as businesses reported higher fuel costs and ongoing supply shortages. This suggests inflation pressures remain despite slower activity.
The preliminary University of Michigan Consumer Sentiment Index fell to 46.3 in October from 48.1 in September, as high prices and borrowing costs continued to weigh on households. Lower-income consumers and households with smaller equity portfolios reported sharper declines in confidence.
Minutes from the Federal Reserve’s (Fed) September meeting showed most officials believed another interest rate hike would likely be appropriate before year-end. While officials unanimously supported September’s quarter-point increase, they differed on whether it was a precaution against persistent inflation or the start of a broader need for more restrictive policy.
Initial unemployment claims fell by 2,000 to 197,000 for the week as employers remain reluctant to cut workers. Similarly continuing claims, which track people still receiving unemployment benefits, increased by 17,000 to 1.716 million for the week, but continues to remain in a downward trend for the year.
How does the most recent economic data impact you?
The services sector continues to be the dominant force behind U.S. economic activity, with September’s ISM report showing continued growth despite higher business costs.
Continued strength in services, an upwardly revised gross domestic product (GDP) report, and a balanced labor market give the Fed more room to raise rates again. For consumers, another rate hike would likely keep pressure on borrowing costs, such as mortgage rates, but investors purchasing new bonds could benefit from higher income opportunities not seen in two decades.
A LOOK FORWARD¹
This week investors will be primarily focused on inflation data, both the Consumer Price Index (CPI) and Producer Price Index (PPI), as well as retail sales.
How does this week’s slate of economic data impact you?
The inflation readings should help clarify whether higher energy and business costs are spreading into broader consumer prices. Softer readings could strengthen the case for the Fed to hold rates steady and support stocks, while stronger readings could increase the likelihood of another hike.
Consumer spending, which accounts for roughly 70% of economic growth, has remained strong throughout the year. September’s reading will help show whether higher prices and rates are creating any weakness beneath the surface.
MARKET UPDATE²
| Market Index Returns as of 10/9/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | 1.17% | 2.13% | 15.14% | 20.60% | 23.06% | 13.82% |
| NASDAQ | 0.65% | 1.89% | 18.28% | 23.98% | 27.21% | 14.25% |
| Dow Jones Industrial Average | 0.96% | 1.51% | 8.80% | 15.41% | 17.30% | 10.32% |
| Russell Mid-Cap | 1.42% | 2.94% | 15.14% | 18.46% | 18.14% | 8.26% |
| Russell 2000 (Small Cap) | -0.90% | 0.38% | 14.14% | 18.66% | 18.06% | 6.14% |
| MSCI EAFE (International) | -0.54% | -1.49% | 8.69% | 14.31% | 17.68% | 9.10% |
| MSCI Emerging Markets | 0.03% | 0.27% | 23.71% | 27.68% | 24.55% | 8.93% |
| Bloomberg U.S. Agg Bond | 0.39% | 0.44% | -2.48% | -1.98% | 4.31% | -0.45% |
| Bloomberg High Yield Corp. | 0.20% | 0.24% | 0.34% | 2.29% | 8.27% | 3.72% |
| Bloomberg Global Agg | 0.03% | -0.08% | -2.74% | -2.14% | 3.83% | -1.81% |
OBSERVATIONS
Major U.S. large-cap equity indices ended the week higher on optimism heading into third-quarter earnings season as the S&P 500 reached a new all-time high. The S&P 500 led the advance for the week (+1.17%), followed by the Dow Jones (+0.96%), and the NASDAQ (+0.65%).
Mid-cap stocks were the best domestic performer for the week, climbing +1.42%. Small-cap stocks finished lower for the week as elevated rates weighed on performance, posting a decline of -0.90%.
Developed international markets trailed domestic large cap equities and posted lower returns for the week (-0.54%), while emerging markets were mostly unchanged (+0.03%).
Domestic and international fixed income indices gained on the week as interest rates fell. The U.S. Aggregate Bond Index rose +0.39% as yields fell, while less interest-rate-sensitive high-yield corporate bonds posted smaller gains (+0.20%). International bonds were mostly flat for the week and finished up +0.03%.
BY THE NUMBERS
Halloween Survey Shows Consumer Spending Expected to Reach $13.5 Billion:
Consumer spending on Halloween is expected to reach $13.5 billion this year, according to the National Retail Federation’s annual consumer survey conducted by Prosper Insights & Analytics. The figure maintains the strong spending level of last year’s record $13.1 billion and reflects consumers’ continued enthusiasm for the holiday. Halloween remains a popular holiday for consumers, with 74% planning to celebrate this year, on par with 73% last year. Participation in the holiday has held steady since its increased popularity during the pandemic and is notably higher than pre-pandemic levels, when only 68% of consumers planned to celebrate in 2019. While consumers are expected to spend an average of $115.14 per person, in line with $114.45 per person in 2025, they remain mindful of costs and are taking a strategic approach to their Halloween purchases.³
At Least 4 Deaths Attributed to Isaias After Hurricane Bashes Florida and Alabama:
Emergency crews in Florida and Alabama are surveying damage and power outages caused by Hurricane Isaias, after the storm bashed into the Gulf Coast as a Category 2 storm Friday night. At least four people have died from storm-related incidents. Isaias brought 105 mph winds onshore, snapping trees and knocking out electricity. In Florida, the worst outages were in counties such as Santa Rosa; Holmes; Washington; and Walton – all of which had more than 80% of their residents without power, Florida Gov. Ron DeSantis said in a morning news conference. On Sunday, there were tornado warnings in North Carolina, as well as a high risk of flooding. Other parts of the rest of the East Coast, including Virginia, also saw heavy rain.⁴
Disclosures
The statements provided herein are based solely on the opinions of the Osaic Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Osaic Wealth, Inc. (“Osaic”) or its affiliates.
Certain information may be based on information received from sources the Osaic Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Osaic Research Team only as of the date of this document and are subject to change without notice. Osaic has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Osaic is not soliciting or recommending any action based on any information in this document.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.
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1 Data obtained from Bloomberg as of 10/9/26.
2 Data obtained from Morningstar as of 10/9/26.
3 NRF Halloween Survey Shows Consumer Spending Expected to Reach $13.5 Billion
4 At least 4 deaths attributed to Isaias after hurricane bashes Florida and Alabama
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