Market View: Week of Oct. 30, 2026
ECONOMIC REVIEW¹
U.S. Gross Domestic Product (GDP) grew at an annualized rate of 3.4% in the third quarter, up from 2.2% in Q2.
Growth was supported by strong increases in business investment and consumer spending, while trade weighed on the headline figure.
Core GDP, which includes only consumer spending and private fixed investment, grew at a 4.9% annualized rate, its best reading since 2017 (excluding the COVID-19 pandemic recovery), indicating underlying private-sector demand remained strong.
The Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) preferred inflation measure, rose 0.5% month-over-month (MoM) in September and 3.6% year-over-year (YoY).
Core PCE, which excludes food and energy, increased 0.3% MoM and 3.1% YoY, remaining above the Fed’s 2% inflation target.
The Fed, as expected, held its benchmark interest rate steady at 3.75%–4.00%, following September’s 0.25% increase.
The decision passed by a 10–2 vote, with two officials preferring another quarter-point increase. The Fed emphasized that additional data would help determine its next move as inflation remains elevated.
Officials described economic growth as strong, supported by resilient domestic spending, robust investment, and productivity gains.
The Employment Cost Index (ECI), which measures wages and benefits paid by employers, rose 0.8% in the third quarter, down slightly from 0.9% in the second quarter. Total compensation costs increased 3.4% over the past year.
Wages and salaries rose 3.1% YoY, but declined 0.6% after adjusting for inflation, as rising prices continued to weigh on workers’ purchasing power.
How does the most recent economic data impact you?
The better than expected GDP report showed that investment in artificial intelligence (AI) remains a key driver of growth, while consumers overall are in a strong position and continue to spend despite higher prices and subdued consumer confidence surveys.
With core PCE above 3%, markets are expecting another rate hike from the Fed at their next meeting in December. Strong economic growth also gives the Fed room to raise rates as it works to bring inflation closer to target.
A LOOK FORWARD¹
This week investors will focus on October’s jobs report, alongside updates on manufacturing and services sector activity. Additionally, markets will be watching the midterm elections in the U.S. on Tuesday.
How does this week’s slate of economic data impact you?
One of the mandates of the Federal Reserve is to keep unemployment low. Their decision to hike or pause interest considers both measures.
The downward forecasts compared to last month suggest that the economy is not slowing down and that the labor market remains healthy.
MARKET UPDATE²
| Market Index Returns as of 10/30/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | -0.56% | -0.87% | 11.77% | 12.11% | 23.40% | 12.07% |
| NASDAQ | -1.99% | -5.28% | 9.95% | 7.85% | 26.40% | 11.23% |
| Dow Jones Industrial Average | -0.83% | 1.76% | 9.08% | 10.60% | 18.18% | 9.70% |
| Russell Mid-Cap | 0.52% | 3.19% | 15.41% | 16.56% | 20.46% | 7.47% |
| Russell 2000 (Small Cap) | 1.30% | 0.58% | 14.37% | 14.80% | 20.75% | 5.58% |
| MSCI EAFE (International) | 0.87% | -0.74% | 9.52% | 13.51% | 19.74% | 8.63% |
| MSCI Emerging Markets | -0.72% | -8.05% | 13.45% | 14.05% | 22.27% | 6.92% |
| Bloomberg U.S. Agg Bond | 0.56% | 2.44% | -0.54% | -0.07% | 5.45% | -0.15% |
| Bloomberg High Yield Corp. | 0.50% | 0.30% | 0.40% | 1.56% | 8.56% | 3.70% |
| Bloomberg Global Agg | 0.30% | 1.41% | -1.30% | -0.81% | 4.72% | -1.54% |
OBSERVATIONS
Major U.S. large-cap equity indices ended the week lower following a busy week of earnings reports, as continued concerns over AI spending pressured tech related stocks and pushed investors toward more defensive sectors.
The NASDAQ led the decline for the week (-1.99%), followed by the Dow Jones (-0.83%) and the S&P 500 (-0.56%).
Mid-cap stocks finished positive for the week, climbing +0.52%. Small-caps were the top performer, rising 1.30% as lower interest rates provided support.
Developed international markets outpaced U.S. large caps and posted a positive return for the week (+0.87%), while emerging markets fell following weakness in the AI related sectors (-0.72%).
Domestic and international fixed income indices gained on the week as interest rates fell. The U.S. Aggregate Bond Index rose +0.56%, while less interest-rate-sensitive high-yield corporate bonds posted similar gains (+0.50%).
International bonds also advanced for the week and finished up +0.30%.
BY THE NUMBERS
Binance Hacked for Record $6.3 Billion: Binance, the world's largest cryptocurrency exchange, was hit late Thursday by what investigators say is the biggest crypto hack in history, with $6.3 billion in funds impacted and roughly half of those assets frozen. Customer withdrawals have been temporarily suspended, and co-CEO Richard Teng promised the exchange will cover all losses. Although details are still emerging, the hack is shaping up to be the largest crypto theft in history, far exceeding the previous record set in February 2025, when attackers stole $1.5 billion from the crypto derivatives exchange ByBit. The hackers appear to have compromised Binance's wallet-signing infrastructure, allowing them to authorize transactions that drained billions of dollars in cryptocurrency across multiple blockchains.³
U.S. Home Sale Prices Just Fell for the Frist Time in 3 Years: The median U.S. home-sale price has fallen for the first time in more than three years, according to a new report from Redfin. The median home-sale price was $389,601, down 0.1% year over year. That marks the second straight week in which prices ticked down—it follows a 0.2% decline last week—after three straight years of increases. At the same time, the typical homebuyer's monthly payment hit its second-highest level on record. The median mortgage payment was $2,786, up 10.7% year over year to the highest level in Redfin's record except the prior week. The weekly average mortgage rate is 7.32%, down from 7.4% a week earlier but still near a three-year high. Additionally, new listings declined 0.6% from a week earlier to their lowest level since the start of the year as homeowners react to slow homebuying demand.⁴
Disclosures
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1 Data obtained from Bloomberg as of 10/30/2026.
2 Data obtained from Morningstar as of 10/30/2026.
3 Binance hacked for record $6.3 billion, withdrawals suspended after "complex attack"
4 U.S. Home-Sale Prices Just Fell for the First Time in 3 Years
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