October 9, 2026

The major averages overcame a mid-week technology selloff and volatile swings in crude oil prices, and Treasury yields to finish the week with modest gains. The week began with the NASDAQ and NASDAQ 100 (NDX) climbing to fresh all-time highs as traders largely shrugged off surging Treasury yields. The rally broadened Tuesday, with the S&P 500 setting a new all-time high as Treasury yields and crude oil prices eased. Reports of increased tanker traffic through the Strait of Hormuz initially helped push oil prices lower, while semiconductor stocks, including Advanced Micro Devices (AMD) and Nvidia (NVDA), provided much of the technology sector's strength. On Wednesday, the major averages initially retreated from their record highs but pared their losses to finish the session modestly lower as crude oil prices moved lower. Investors remained under pressure from surging U.S. Treasury yields, which reportedly reached their highest levels since 2002, while crude oil prices initially moved higher following new attacks in the Strait of Hormuz.

Crude oil prices rose sharply Thursday as Iran ramped up attacks on tankers transiting the Strait of Hormuz, while Hurricane Isaias threatened offshore production in the Gulf Coast region. However, President Trump limited the market reaction with a social media post stating that the U.S. would not attack Iran before the midterm elections. On the economic front, initial jobless claims came in at 199K, slightly below expectations of 201K. The major averages finished the week with modest gains, led by a rebound in the Magnificent Seven (Mag 7) stocks. The 10-year Treasury whipsawed throughout the week on headlines but pulled back to finish at 5.242%. Volatile crude oil prices landed at $91.67, a tick higher from the previous week as the ongoing Mideast conflict and Gulf Coast hurricane could be constricting supply. Sector leadership rotated toward value-oriented and cyclical groups, with Utilities (XLU), Energy (XLE), Consumer Staples (XLP) and Health Care (XLV) among the stronger performers. Technology (XLK) and Industrials (XLI) were the week's leading laggards.

For the period, the DJIA gained 477.99 points (0.9%) and settled at 51654.95. The S&P 500 jumped by 88.82 points (1.2%) and closed at 7811.54. The NASDAQ was higher by 175.31 points (0.6%), finishing at 27366.17. The small cap Russell 2000 lost 25.22 points (-0.9%) and settled at 2807.67. The five-week losing streak is the Russell 2000's longest such streak since May 2022.

Market Outlook: The technical condition of the market improved as leadership, previously concentrated in mega-cap technology stocks, began to broaden into other areas of the market. The NASDAQ and NASDAQ 100 (NDX) closed at new all-time highs in two sessions this week, while the S&P 500 set a new high in one session. MACD, a short-term trend gauge, remains in bullish territory for the S&P 500 and NASDAQ. MACD is weak for the DJIA but improved throughout the week with a bullish crossover. Momentum, as measured by the 14-day Relative Strength Index (RSI), is in the 60 range for the S&P 500 and NASDAQ and continues to strengthen. Momentum is also improving for the DJIA and the Equal-Weight S&P 500 (RSP), although both continue to lag the broader market as they steadily approach resistance at their respective 100-day moving averages (MAs). The small-cap Russell 2000 continues to find support at its 200-day MA, while the Dow Jones Transportation Average remains below its 200-day MA as volatile crude oil prices weigh on the group. The Philadelphia Semiconductor Index (SOX) continues to lose upside momentum but remains firmly in an uptrend.

The sector map showed a broadening in market participation, with nine of the 11 sector ETFs closing higher for the week. A rotation away from mega-cap technology and semiconductor stocks helped Utilities (XLU) emerge as the leading sector but still has some work to do before reclaiming its 50-day MA. Energy (XLE) and Consumer Staples (XLP) also showed strength, each gaining more than 3% for the week. Conversely, selling pressure in heavily weighted technology stocks contributed to underperformance in Technology (XLK) and Industrials (XLI). Eight of the 11 sector ETFs are trading below their 50-day moving averages (MAs), while seven are below their 200-day MAs, representing a slight improvement from last week. MarketEdge currently maintains a LONG opinion on only three sectors: Communication Services (XLC), Energy (XLE), and Technology (XLK).

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times.

Currently, the CTI is Positive at +5, unchanged from the previous week. Cycles B, C, D are Bullish, while Cycles A and E are Bearish. The CTI is projected to remain in a positive configuration into October, although adjustments are probable in extending some of the earlier bearish cycles.

Momentum Index (MI): The markets' momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish.

The Momentum Index is Neutral at -2, unchanged from the previous week. Breadth was mixed at the NYSE as the Advance/Decline line gained 556 units while the number of new 52-week lows exceeded the number of new highs on all five sessions. Breadth was negative at the NASDAQ as the A/D line fell by 675 units while the number of new lows out did the new highs on each day. Finally, the percentage of stocks above their 50-day moving average dropped to 24.4% vs. 29.4% the previous week, while those above their 200-day moving average dropped to 42.3% vs. 46.8% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Negative at -5, down a notch from the previous week.

Professional investors remain bullish. The National Association of Active Investment Managers (NAAIM) Exposure Index fell to 83.0% from 84.7%. Retail investors saw a slight uptick in the bulls with the Association of Individual Investors (AAII) reporting a bump in retail Bulls to 40.3%, which is above the historical average of 37.5% for the first time in a month. Bears are still hard to come by with the Percentage of Bearish Investment Advisors remaining around 15.4%.

Market Posture: Based on the status of the Market Edge, market timing models, the 'Market Posture' is Bullish as of the week ending 08/07/2026 (DJIA - 54,036.93). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Segment Rankings: What's Hot (34) - What's Not (138): Of the 172 Industry Segments that we track, 34 are rated as either Strong or Improving while 138 are regarded as Weak or Deteriorating. The Previous Week's totals were 41-131. The following are the strongest and weakest Industry Segments for the period ending 10/01/26. Strongest: Security Software & Systems, Movie Theaters, Medical Equipment Distributors, Diagnostics and Testing and Doors and Windows. Weakest: Parcel Delivery, Pulp & Paper Products, Other Transportation and Dairy Products.

ETF Center: The top performing ETF categories for the week ending 10/01/26 were: Specialty Technology (+2.74%), Shorts (2.57%) and Specialty Utilities (+0.02%). The weakest categories were: Sector-Basic Materials (-3.78%), Commodity- Base Metals (-3.59%), Europe (-3.24%) and Commodity- Precious Metals (-2.76%).