To The Moon

The US stock market capped off a highly volatile week from 05 - 09 Oct 2026 with broad gains across all 3 major indices.

Solid corporate profit expectations driven by AI spending engine kept investor sentiment buoyant, allowing markets to brush off multi-decade highs in US Treasury yields and elevated oil prices. But for how long ?

Both the $S&P 500(.SPX)$ and the $NASDAQ(.IXIC)$ achieved fresh all-time highs earlier in the week before a brief technology sell-off on Thu, 08 Oct 2026, triggered by (a) AI valuation anxieties and (b) downbeat reports regarding OpenAI's revenue projections.

However, a strong broad-based Friday rally successfully erased those losses, pushing the indices back near their historical peaks to conclude the week higher

For the week:

• DJIA : +0.89% (+455.70 to 51,654.95).

• S&P 500 : +1.04% (+80.68 to 7,811.54).

• Nasdaq : +0.52% (+140.24 to 27,366.17).

According to LSEG data, analysts estimate S&P 500 annual earnings growth of +30.6%, on aggregate, for the July-September period, with Energy & Technology posting the largest YoY earnings growth of +123% and +66.5%, respectively.

On the NYSE, advancing issues outnumbered decliners by a 1.65-to-1 ratio. There were 141 new highs and 183 new lows.

On the Nasdaq, advancing issues outnumbered decliners by a 1.38-to-1 ratio, with 2,756 stocks rose and 1,997 fell.

Trading volume on US exchanges was 14.37 billion shares, compared with the 17.76 billion average for the full session over the last 20 trading days.

US Economic reports.

Honestly, most of last week’s US economic reports are not the type that will severely impact US market sentiments.

Nonetheless, they continued to provide glimpses into the mental state of US consumers and health status of the US economy.

Last week’s US Reports released :

• 06 Oct 2026 - US Trade balance.

• 07 Oct 2026 - US Consumer credit.

• 08 Oct 2026 - Jobless claims.

• 09 Oct 2026 - Consumer sentiments (prelim for Oct).

US Trade Balance.

The US goods-and-services trade balance report for August 2026 was a weak headline report.

The deficit widened to $105.6 billion, more than the $100.8 billion expected. It is the largest gap since March 2025.

Trade balance has worsen by -12.8 billion compared to July 2026’s upwards revised $92.8 billion:

• Imports rose +4.3% to a record $420.8 billion.

• Exports rose only +1.4% to $315.2 billion, with “goods’ deficit widened to $136.6 billion; while services surplus was roughly unchanged at $31.0 billion.

Imports did the heavy lifting, pushing trade deficit in the wrong direction.

The wider inflation-adjusted goods deficit means net exports will drag down Q3 2026 GDP growth.

Investors mark your calendar and prepare for possible market weakness when the preliminary report comes out on 29 Oct 2026.

US Consumer credit.

On 07 Oct 2026, US Fed’s G.19 Consumer Credit Report was released.

For the month of August 2026, total outstanding consumer credit increased at a seasonally adjusted annual rate of 1.9% ($8.3 billion).

Overall, this is considered a weak & soft report for the month.

The expansion was less than half of July 2026's revised 4.1% growth pace, hitting its slowest rate since May 2026 and missing Wall Street forecasts of a $14.5 billion advance.

A falling consumer credit report is frowned upon by economists because US economy relies heavily on consumer spending, which is heavily fueled by credit.

Specifically, a decline in consumer credit outstanding, meaning people are either (a) borrowing less or (b) paying down debt.

While avoiding high-interest debt is fantastic for a US consumer’s financial health, a sharp, widespread drop in consumer credit usually signals underlying economic trouble rather than a sudden wave of financial responsibility.

US Jobless Claims.

On 08 Oct 2026, US Department of Labor released its weekly unemployment insurance report.

Latest data outlines what economists characterize as a rigid, "low-hire, low-fire" US labour market environment.

Weekly claims.

For week ending 03 Oct 2026, weekly claims for state unemployment benefits fell by -2,000 to a seasonally adjusted 197,000. (see below)

It outperformed Wall Street estimates, forecasting claims to rise to 200,000 and previous week’s upwards revised 199,000.

The 4-week moving average also declined by -2,500 to 198,000, registering its lowest mark since October 2022.

Overall, last week’s weekly claims is a highly strong report.

Weekly claims have held below the 200,000 threshold for 4 consecutive weeks, remaining anchored near historic 57-year lows, revealing that corporate layoffs across the country are remarkably subdued.

Continuing claims.

For week ending 26 Sep 2026, continuing claims rose by +17,000 to a seasonally adjusted 1.716 million.

This comes in more forceful than Wall Streets’ estimates of 1.71 million and prior week's downwards revised’s 1.699 million, a drop to a 3½ year low.

It’s 4-week moving average also declined by -12,250 to 1.711 million.

Overall, last week’s continuing claims report is moderately weak, despite remaining low by historical standards.

While overall claims’ volume is relatively steady, the continuous sequential increase in weekly continuing claims serves as a proxy for slow hiring.

Like previous weeks, while companies are reluctant to lay off staff ("low-fire"), those who lost their jobs are taking much longer to find new placement due to tepid corporate hiring ("low-hire").

Consumer Sentiments (preliminary).

For October 2025, US consumer sentiments preliminary report index, fell to 46.3 from September 2026’s 48.1, missing the consensus estimate of 47.6 and dropping to a 5-month low. (see above)

The preliminary report underscores widespread domestic financial anxiety driven by:

• A high cost of living.

• Steep borrowing costs.

• Energy price shocks stemming from the prolonged Middle East conflict.

The more alarming aspect of the report is the Current Economic Conditions subindex has plunged -12.2% to an all-time record low of 44.7.

Buying conditions for durable goods hit record lows, indicating that high interest rates & persistent price increases are severely stifling major household purchases.

The drop is acutely felt by (a) lower-income households and (b) smaller investors who lack the capital buffers to withstand these compounding pressures.

Overall, while a booming US stock market keeps higher-income spending buoyant, consumer sentiments report signals deep, bipartisan structural fatigue across the broader American consumer base.

My viewpoints: (mine only)

For last week, US stock market’s Friday gains were supported by continued optimism around AI-related earnings, that helped offset pressure from elevated Treasury yields, higher oil prices, and softer consumer sentiment.

Last week’s data presented a mixed picture - (a) Consumer sentiment weakened further in early October, (b) Trade deficit also widened more than expected in August 2025, driven by a surge in imports and (c) weekly jobless claims remained near historic lows, indicating that layoffs remain limited even as hiring slows.

This week, investors are expected to focus on corporates earnings announcement as Q3 earnings season set to start.

Apart from that inflation results are coming into focus as well.

For a start based on Federal Reserves Cleveland’s NowCasting, headline inflation is expected to soar past August 2026’s readings while core inflation will more or less, remains status quo. (see below)

Federal Reserves Bank of Cleveland - NowCasting

The highly anticipated CPI inflation report (Wed, 14 Oct 2026) is the one to watch, as its readings will throw hints on US Fed's ‌next policy decision at the end of the month.

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