Weekly Market Update (Oct 04, 2026)
HIGHLIGHTS
September jobs data tempered earlier signs of strengthening momentum. Markets expect the Fed to hold rates unchanged in October.
- France: The euro area outlook is uncertain due to political and fiscal developments. Fiscal fundamentals remain weak and are unlikely to reach an inflection point before next year. Inflation is expected to rise, and the ECB is expected to raise rates in December.
- Japan: Tokyo CPI came in above expectations. Markets expect the BoJ to hike rates in December. Inflation expectations remain elevated, and financial conditions remain accommodative.
- China: The latest fiscal support package is smaller than the 2024 stimulus package. Financing costs will be lowered for selected industries. PMIs improved as infrastructure spending gained traction.
MARKETS
| Nasdaq | 27,190.86 | +0.45% |
| S&P 500 | 7,722.72 | -0.27% |
| Dow | 51,176.96 | -1.26% |
| 10-Year | 5.28% | +10bps |
| Brent | 102.25 | +4.94% |
| DXY | 101.92 | +0.87% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Barclays: The equity market remains resilient. The AI-driven investment boom continues, and positive supply shocks outweigh negative shocks.
Morgan Stanley: Housing, banking, small caps, and other cyclical sectors are losing strength, while liquidity remains solid. The AI ecosystem remains strong, with robust order books and rising earnings estimates.
Fixed Income
Morgan Stanley: Treasury investors have concerns about AI-related investment-grade issuance, shifts in demand for Treasuries, and US debt and deficit dynamics. However, the Fed’s hands are tied, making it unlikely to pursue approaches like QE or yield curve management. The hiking cycle is likely to be longer than expected.
J.P. Morgan: Treasury yields have moved higher recently. With sticky inflation and growth holding up, rates are likely to stay higher for longer.
Economy
UBS: The US labor market is strong, with the unemployment rate at its lowest level in 10 weeks. Inflation continues to moderate, although input costs have rebounded. We expect disinflation over the next six months.
J.P. Morgan: PMI data delivered a strong signal for global growth. Inflation pressures remain high, and major central banks have shifted toward a more hawkish stance.