Small caps led and the largest companies lagged. The Russell 2000 rose 2.0% to 2,775.90, about 9.5% below its August record and back out of the correction territory it entered a week ago, while the S&P 500 fell 0.5% to 7,623.68 and the Nasdaq 0.7% to 25,955.34, each for a second straight weekly loss. The Dow rose 0.4% to 52,215.16 despite a 1.2% drop on Friday. The ten-year yield fell about 10 basis points to 4.99%, its third straight weekly decline. Big technology paid for its spending plans. Meta's revenue rose 26% to $64.6B, but it raised the low end of its 2026 capital spending range to $135B, with the top at $145B, and its shares fell 7.0% on Thursday. Lam Research fell 11.8% the same day on its outlook, and the semiconductor index lost 6.7% in one session. Oil rose again. Brent climbed 6.2% to $116.72, its highest settle since April 29, after Houthi attacks on a Saudi oil facility and an airport and reports that the U.S. is weighing new strikes on Iran. WTI finished at $103.27. The data showed a strained consumer and a tight labor market. Housing starts fell 5.2% to an annual rate of 1.221 million, builder sentiment hit its lowest level since 2012, and jobless claims were 194,000. Consumer sentiment finished October at 48.0, with one-year inflation expectations at 4.7%. The Fed meets Tuesday and Wednesday, with a hold expected and most of a December hike priced in.
The Russell recovered the line it crossed in #040. A week ago it closed 11.3% below the 3,068.42 record from #031; this week it rose 2.0% to 2,775.90, about 9.5% below it, and closed back above correction territory. The move came with breadth rather than leadership. The equal-weight S&P 500 rose about 1.1% while the cap-weighted index fell 0.5%, regional banks gained about 3.8%, and the ten-year fell for a third straight week to 4.99%, nearly 30 basis points below where it stood three weeks ago. #040 warned that falling yields driven by a flight to safety are not a tailwind for small companies. This week yields fell further and small caps rose anyway, which is the first sign that lower long rates are reaching the part of the market that borrows. One week is not a trend, and the hike path and $116 oil are still in place.
The largest companies spent the week explaining their budgets. Meta's revenue rose 26% to $64.6B, but it raised the low end of its 2026 capital spending range to $135B, and the shares fell 7.0% on Thursday. Lam Research, which sells chipmaking equipment, beat forecasts and fell 11.8% on its outlook, taking the semiconductor index down 6.7% in a session and more than 3% for the week. General Motors announced a $20B buyback and fell 6.8% on guidance, Netflix cut its advertising revenue outlook, and AT&T and T-Mobile each fell about 8% on Friday after a report on SpaceX's wireless plans. Results themselves were strong: 83% of the 111 S&P 500 companies that had reported by Thursday beat estimates, according to LSEG. The market is pricing what the spending earns rather than what the quarter earned, the same preference for current cash flow #039 and #040 described.
Oil and inflation keep the Fed in play. Brent rose for a third straight week, up 6.2% to $116.72, after Houthi attacks on a Saudi oil facility and an airport and reports that the U.S. is weighing new strikes on Iran; WTI finished at $103.27. Gold fell 4.1% to $4,007.90. Households are feeling it. Final October consumer sentiment was 48.0, revised up from 46.3, but one-year inflation expectations were 4.7%, up from 4.6% in September, and long-run expectations were 3.5%. Housing starts fell 5.2% to 1.221 million against 1.305 million expected, and the builders' index was 29, its lowest since 2012. The labor market gives the Fed no reason to ease: jobless claims were 194,000, below the 200,000 forecast, and the flash composite PMI was 57.6. The committee meets Tuesday and Wednesday with the funds rate at 3.75% to 4.00% after September's hike. A hold is expected, and futures price most of a December hike.
Coverage ledger: the desk initiates coverage this week on NVEC, NVE Corporation, a debt-free spintronics maker in Minnesota whose second fiscal quarter fell 8% to $5.83M after a large medical device customer adjusted inventory, while first-half revenue rose 36% to $16.9M with net margins above 50%. Its distributor sales rose 67% in the quarter, a small-company read on the same industrial demand the PMI shows. IIIN reported its fiscal fourth quarter on Thursday: net sales rose 17.9% to $209.3M, but net earnings fell to $7.7M from $14.6M as gross margin fell to 10.0% from 16.1%, and its chief executive said rising costs are relentless. That is #040's producer price squeeze in a filing. UTMD reported third-quarter revenue down 12.1% to $8.62M and net income up 5.9% to $2.79M, with $85.2M of cash and investments and no debt. RELL reads Lam's outlook through its wafer fab equipment customers. ESP sits in a defense tape where Lockheed Martin rose 7.0% on raised guidance. BTBT sits next to the AI spending debate that moved Meta. Full dossiers in the research library.
| Ticker | Company | Move | Why it moved |
|---|---|---|---|
| RUT | Russell 2000 | +2.0% | Closed at 2,775.90, about 9.5% below its August record and back out of correction territory; the equal-weight S&P 500 rose about 1.1% while the index fell 0.5%, and regional banks gained about 3.8% |
| BRENT | Brent Crude | $116.72 | Rose 6.2% for a third weekly gain to its highest settle since April 29, after Houthi attacks on a Saudi oil facility and an airport and reports that the U.S. is weighing new strikes on Iran; WTI finished at $103.27 |
| 10Y | Ten-Year Treasury | 4.99% | Fell about 10 basis points for a third straight weekly decline, nearly 30 basis points in three weeks, and the two-year fell to 4.68%; futures price a hold at Wednesday's Fed meeting and most of a December hike |
| META | Meta Platforms | -7.0% | Fell on Thursday after raising the low end of its 2026 capital spending range to $135B, although revenue rose 26% to $64.6B; communication services was the weakest sector of the week |
| LRCX | Lam Research | -11.8% | Fell on Thursday on its outlook despite beating forecasts, taking the semiconductor index down 6.7% that day; the Nasdaq fell 0.7% for a second straight weekly loss |