Market View: Week of Oct. 16, 2026
ECONOMIC REVIEW¹
Existing home sales rose 1.5% in September to an annualized rate of 3.99 million sales, although this remains 2.2% below where existing home sales were this time last year.
Despite the modest rebound, housing activity remains subdued as elevated mortgage rates and record-high home prices continue to weigh on affordability and discourage potential buyers.
The Consumer Price Index (CPI) rose 0.6% for the month, above expectations, pushing the annual inflation rate to 3.7%, up from 3.4% in August.
Energy prices were the primary driver, rising 5.2%, with gasoline prices alone jumping 9.1% and accounting for more than half of the monthly headline increase.
Core CPI, which excludes food and energy, increased 0.3%, bringing the year-over-year (YoY) rate to 2.6%, up from 2.4% in August.
The Producer Price Index (PPI) jumped 1.3% for the month, well above expectations of 0.6%, pushing the annual rate to 6.3%, its highest level since December 2022.
Core PPI, excluding food and energy, increased 0.7%, also exceeding expectations, bringing the annual rate to 5.0%.
Retail sales climbed 0.8% in September, exceeding expectations of 0.3%, following an upwardly revised 1.3% gain in August. Sales were up 6.3% compared to a year ago.
Excluding gas stations, sales increased just 0.2%, suggesting underlying consumer spending was lower than the headline figure indicates.
How does the most recent economic data impact you?
This week’s inflation data came in hotter than expected, with rising energy costs continuing to drive prices higher. With inflation moving further away from the Fed’s 2% target, the case for additional rate hikes has strengthened.
Retail sales continued to show consumer resilience, although much of the increase was driven by higher gasoline prices. With inflation putting pressure on purchasing power, it will be important to monitor whether consumer spending begins to slow, especially ahead of the holiday season.
Existing home sales rebounded modestly in September, but elevated mortgage rates and record-high home prices continue to weigh on affordability and housing demand.
A LOOK FORWARD¹
This week investors will be primarily focused on consumer sentiment data as well as building permits and housing starts.
How does this week’s slate of economic data impact you?
With inflation elevated, it will be important to monitor whether long-term expectations remain anchored and how consumers perceive the broader economic outlook.
MARKET UPDATE²
| Market Index Returns as of 10/16/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | -1.94% | 0.15% | 12.91% | 16.28% | 22.12% | 12.97% |
| NASDAQ | -4.48% | -2.68% | 12.98% | 15.94% | 25.37% | 12.72% |
| Dow Jones Industrial Average | 0.67% | 2.19% | 9.53% | 14.40% | 17.26% | 10.12% |
| Russell Mid-Cap | -1.19% | 1.72% | 13.77% | 15.43% | 17.52% | 7.51% |
| Russell 2000 (Small Cap) | -3.04% | -2.67% | 10.67% | 12.34% | 17.06% | 5.18% |
| MSCI EAFE (International) | 1.43% | -0.08% | 10.25% | 15.16% | 18.55% | 8.89% |
| MSCI Emerging Markets | -5.15% | -4.89% | 17.35% | 21.45% | 22.09% | 7.33% |
| Bloomberg U.S. Agg Bond | 0.88% | 1.32% | -1.63% | -1.56% | 5.00% | -0.34% |
| Bloomberg High Yield Corp. | -0.33% | -0.09% | 0.01% | 1.47% | 8.40% | 3.62% |
| Bloomberg Global Agg | 0.89% | 0.81% | -1.88% | -2.03% | 4.41% | -1.68% |
OBSERVATIONS
Major U.S. equity indices finished the week mixed, as a sharp selloff in technology and AI-related stocks weighed on markets. Concerns surrounding elevated AI spending, financing costs, and hotter-than-expected inflation contributed to the increased volatility.
The NASDAQ led declines for the week (-4.48%), and the S&P 500 pulled back (-1.95%), but the Dow Jones managed to finish higher (+0.67%) as investors rotated toward more defensive sectors.
Small-cap stocks underperformed large caps, falling -3.05% as the likelihood of another interest rate hike in October increased. Interest rate hikes tend to affect smaller, more indebted companies more significantly.
Developed international equities were the strongest performer for the week, posting a return of 1.43%, while emerging markets declined 5.15% due to the correction in the technology sector.
Fixed income markets benefited from falling Treasury yields as investors sought safety amid the equity market selloff, despite stronger-than-expected inflation readings.
The U.S. Aggregate Bond Index increased 0.88%, with international bonds following suit, rising 0.89%. Lower-rated, high-yield bonds declined 0.33%.
BY THE NUMBERS
Elon Musk Pledges to Give Every U.S. Child a Share of SpaceX: Elon Musk announced plans to give one share of SpaceX stock to every child in the United States in 2027, potentially providing millions of young Americans with direct ownership in the aerospace company. With approximately 72 million children under the age of 18 in the U.S. and SpaceX shares recently valued at $146.03, the proposed initiative could represent roughly $10.5 billion in stock distributions. The announcement follows a similar initiative from artificial intelligence company Anthropic, which pledged 5% of its shares toward charitable efforts aimed at addressing the societal impacts of AI. Unlike traditional charitable initiatives, Musk's proposal would distribute shares directly to individuals, allowing children to potentially benefit from future appreciation in SpaceX's valuation. Details surrounding eligibility and implementation have yet to be finalized.³
Rays One Win Away From Historic World Series Matchup: The Tampa Bay Rays are one victory away from reaching the World Series after defeating the Cleveland Guardians 3-1 on Sunday, taking a 3-2 lead in the American League Championship Series. After falling behind 2-1 in the series, Tampa Bay has won two consecutive games and now returns home with an opportunity to secure its third World Series appearance in franchise history. A victory would set up a matchup against the Milwaukee Brewers, marking the first World Series since 1980 featuring two franchises that have never won a championship. With Milwaukee already securing its spot, a Tampa Bay victory would guarantee a first-time World Series champion.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 10/16/26.
2 Data obtained from Morningstar as of 10/16/26.
3 Musk vows to give each US child a SpaceX share
4 Rays on the verge of ensuring ultra-rare World Series phenomenon
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