Friday, 10/16/2026 p.m.

• Markets finish the week lower as technology weakness continues – U.S. equity markets ended lower on Friday, with technology and communications lagging. Bond yields also declined, with the 10-year Treasury yield near 5.08% as markets scaled back expectations for a Fed rate hike later this month. International markets were firmer: Asian equities finished higher overnight, and European stocks also advanced as eurozone consumer price index (CPI) inflation rose to 3.8% in September, matching estimates. WTI crude extended its recent gains amid continued disruptions in the Middle East. The U.S. dollar weakened 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 for 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, which was driven in part by higher electricity demand from data centers and unseasonably warm weather during the month for much of the country. 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. Alongside other recent data, these trends 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, early 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 remains strong, with S&P 500 earnings forecast to grow about 27% from a year earlier. Energy is expected to lead earnings growth, followed by technology and communication services. Growth is also projected to be broad-based, with 10 of the 11 sectors expected to report year-over-year earnings gains. If realized, that breadth could help provide a stronger fundamental foundation for a wider range of companies and sectors, potentially helping reduce the market's reliance on a relatively small group of mega-cap companies.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet}