Friday, 10/16/2026 a.m.

• Markets edge lower as technology stocks extend their decline – U.S. equity markets are modestly lower in early trading on Friday, as the technology sector is extending its recent underperformance. Bond yields are also declining, with the 10-year Treasury yield near 5.09% on reduced market expectations for a Fed rate hike later this month. International markets are firmer: Asian equities finished higher overnight, and European equities are also advancing as eurozone consumer price index (CPI) inflation held steady at 3.8% in September, as expected. WTI crude is trading lower near $96 per barrel following the International Energy Agency's decision to accelerate the release of the remaining 100 million barrels of oil covered by a previously announced agreement. The U.S. dollar is weakening modestly against most major currencies, consistent with lower Treasury yields.
   
• Industrial production exceeds expectations –U.S. industrial production increased 0.7% in September, ahead of forecasts of a 0.4% gain and marking the strongest monthly increase in five months. The headline figure was boosted by a 3.5% rise in utility output, while manufacturing production increased a more moderate 0.3%, roughly in line with expectations. Overall, industrial production grew at a 2.8% annualized pace in the third quarter. Combined with other recent data, stronger industrial production should help provide broader support for the economy and the labor market.
   
• Earnings season off to a solid start – With the first week of earnings season complete, results have been encouraging. Among S&P 500 companies that have reported, 85% have exceeded earnings estimates, with an average positive surprise of 3.3%. Looking ahead, the outlook is strong, with S&P 500 companies forecast to grow profits by about 27% from a year ago. The energy sector is expected to lead earnings growth, followed by technology and communication services. Growth is also expected to be broad-based, with 10 of the 11 sectors projected to report year-over-year earnings gains. If realized, broader earnings participation could help support a wider range of companies and sectors and help reduce the market's reliance on a relatively small group of large companies.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet}