U.S. stocks reached a record high on Tuesday and finished the week higher, even as Treasury yields touched their highest level since 2002 on Wednesday. A well-received Treasury auction pulled yields back, and the 10-year ended the week slightly below where it started. Oil jumped on Thursday as Iran stepped up tanker attacks near the Strait of Hormuz.
| Market | Ticker | Weekly Return | YTD Return |
|---|---|---|---|
| Global Equities | ACWI | 0.5% | 14.5% |
| U.S. Equities | SPY | 1.2% | 15.1% |
| International Equities | ACWX | -0.7% | 13.7% |
| Municipal Bonds | MUB | 0.1% | -3.3% |
| U.S. Core Bonds | AGG | 0.4% | -2.4% |
| 10-Year U.S. Treasury Yield | US10Y | -3 bps to 5.25% | +107 bps to 5.25% |
Source: YCharts. ETF figures represent total returns. Weekly figures are measured from the October 2 close. Year-to-date figures are through Thursday, October 8, compounded with Friday, October 9, price returns. Treasury figures represent changes in yield.
The bond market set the tone again. The 10-year yield touched its highest level since 2002 on Wednesday, then fell back after the Treasury’s 10-year auction drew strong demand. A solid 30-year auction on Thursday helped yields ease further. The 10-year ended the week at 5.25%, down 3 basis points.
Stocks rebounded on Friday, with the S&P 500 up 0.6% after two straight daily declines.
WTI crude oil settled at $91.63 a barrel on Friday, little changed on the day after jumping 3.6% on Thursday. Iran has attacked nine tankers in and around the Strait of Hormuz over the past week, and Hurricane Isaias shut in about 1.28 million barrels a day of U.S. Gulf production. Prices eased from their highs after President Trump said the U.S. would not strike Iran before the midterm elections.
Initial jobless claims fell to 197,000 in the week ended October 3, a sign that layoffs remain low.
Technology and AI stocks stumbled on Thursday. The Nasdaq fell about 1% after news of an OpenAI revenue setback, a reminder of how much of the market’s recent strength rests on expectations for AI spending.
International stocks lagged U.S. stocks for the week. In credit markets, ICE BofA index data show the extra yield on high-yield bonds over Treasuries was 3.15% through Thursday, little changed from 3.10% a week earlier, after reaching 3.24% on October 1.
Minutes from the Fed’s September meeting, released Wednesday, showed all 19 policymakers backed the quarter-point rate increase, and most saw another increase as likely appropriate by year end. Some participants leaned more hawkish, citing demand-driven inflation and the risk that inflation expectations drift higher. The minutes did not say when another move could come, and officials stressed that decisions depend on incoming data. Governor Christopher Waller said more increases are needed. The Fed meets next on October 27 and 28.
Wednesday’s September consumer price index (CPI). Economists expect headline inflation near 3.6% from a year earlier, up from 3.4% in August, and core inflation, which excludes food and energy, near 2.5%, up from 2.4%. It is one of the last inflation readings before the Fed meets, so the result may shape how investors view the path of interest rates.
The U.S. bond market is closed Monday for Columbus Day, though stocks trade. Third-quarter earnings season begins Tuesday with JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo, followed by Bank of America and Morgan Stanley on Wednesday. Wednesday also brings the CPI report, the Fed’s Beige Book, and a Treasury buyback announcement. Thursday brings producer prices, retail sales, and jobless claims, and Friday brings industrial production. Fed speakers include Waller and Barkin on Tuesday, Bowman and Barkin on Wednesday, Bowman on Thursday, and Warsh on Friday.