Waiting Game. The tech selloff finally eased to start the week -- even if the relief wasn't very widespread -- as investors await another busy slate of third-quarter earnings reports.
The Dow Jones Industrial Average is down 0.07% while the S&P 500 is up 0.4% and the Nasdaq Composite gained 1.1%.
"Focus turns squarely toward earnings this week and markets flashed green early thanks to a light rebound in tech shares," writes Charles Schwab Head Trading & Derivatives Strategist Joe Mazzola. "Despite [an] initial dip-buying, it's an auspicious moment for major AI and chip firms preparing to report and the question is whether gains can hold up."
Earnings will be the star of the show this week, given there's little in the way of economic data. The stakes are high, and the worries are many: concerns that the artificial intelligence trade is faltering, the rising debt loads of some tech players, and competition from cheaper Chinese options. Solid reports from big tech players would help reassure investors that recent gloom is an over-reaction. Given the sector's weight in the broader market, good news would be welcome across many different industries.
"Concerns about financing the AI buildout contributed to a 2% decline in the S&P 500 last week, setting up an important test as the corporate earnings season gathers pace," UBS Chief Investment Office Chief Investment Officer Mark Haefele writes. "Results will show whether strong profit growth can restore confidence in the equity rally, while flash purchasing managers' indices will provide timely signals on global activity and price pressures."
With more results rolling in beginning Tuesday, we won't have too long to wait.
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The Hot Stock: Western Digital Corporation +6.1% The Biggest Loser: Mosaic Company -4.8%
Best Sector: Consumer Discretionary +2.7% Worst Sector: Utilities -2%
There's No (place like) Home
Although it plays a more minor role, housing is an important character in this week's economic story.
Construction company PulteGroup reports on Thursday, and we'll get more housing updates from the Census Bureau and the National Association of Realtors (check out the calendar section below listed below.) Both are expected to be lackluster.
That's not surprising given all the challenges facing housing right now, which my colleague Shaina Mishkin has written about at length. Rates for a typically 30-year mortgage is well above 7%, their highest level in years. That should soon start to trickle into housing data, and the prospect of even higher mortgage rates looms large. Homebuilders are cutting prices even as the average cost of a house has soared, leading many of their stocks to suffer; the iShares US Home Construction ETF is down double digits since the start of 2026.
The fallout doesn't stop there. Home improvement retailers are feeling the pinch too, since Americans spend the most on renovations when they move.
There's an argument that the sluggish housing market is worrisome for the broader economy, as it contributes less to gross domestic product and can't act as a support if stocks -- which has so far done the lion's share of fueling the economic cycle -- start to slide.
This week's batch of housing data are unlikely to bring good news on that front. But they could add further fuel to the argument that homeownership -- the cornerstone of the American dream for so many -- is becoming just that: a fantasy rather than a reality.
The Calendar
3M, Capital One Financial, Chubb, Equifax, GE Aerospace, General Motors, Genuine Parts, Halliburton, Hasbro, Intuitive Surgical, KeyCorp, MSCI, Netflix, Northrop Grumman, RTX, Synchrony Financial, and United Airlines Holdings report quarterly results.
The Census Bureau reports new residential construction data for September. Consensus estimate is for a seasonally adjusted annual rate of 1.3 million privately-owned housing starts, slightly more than in August.
The National Association of Realtors reports pending-home sales for September. Pending home sales are expected to be flat month over month after a 0.3% rise in August.
-- Dan Lam
What We're Reading Today
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