U.S. Equity Market Trading Outlook — Monday, October 26, 2026
U.S. equities are pointing higher Monday as crude retreats from six-month highs and investors prepare for the busiest week of the third-quarter earnings season and Wednesday’s Federal Reserve decision. At 5:19 a.m. ET, Dow futures were up 0.49%, S&P 500 futures were up 0.30% and Nasdaq 100 futures were up 0.25%. Friday, the Dow fell 1.23%, S&P 500 declined 0.52% and Nasdaq slipped 0.21%, capping a second consecutive weekly decline for the S&P 500 as investors continued to reassess AI financing and capital intensity.
Treasury yields moved modestly higher Friday, with the 2-year up 3 basis points to 4.68%, the 10-year up 3 basis points to 5.00% and the 30-year up 3 basis points to 5.33%. The 10-year remains close to 5.0% this morning, well below its early-October peak above 5.35% but still restrictive for equity valuations. The Fed begins its two-day meeting Tuesday and is widely expected to keep the funds rate unchanged at 3.75%-4.00% Wednesday, while markets still assign roughly an 80% probability to another increase in December.
The dollar firmed Friday, with the DXY up 0.20 to 101.81. The euro fell 0.21% to $1.1194, sterling declined 0.22% to $1.3372, USD/JPY edged 0.04% higher to ¥156.84, and EUR/JPY fell 0.16% to ¥175.56. Currency trading is relatively subdued this morning, with the yen weakening modestly and the euro near $1.12 as investors wait for this week’s Fed, ECB and Bank of Japan decisions.
Energy is offering some relief after dominating Friday’s tape. December WTI surged $4.07, or 4.09%, Friday to $103.54, while December gold fell $49.20, or 1.21%, to $4,011.20. WTI is down roughly 2% toward $101.50 this morning as Qatari mediators pursue renewed efforts to de-escalate U.S.-Iran tensions. The decline follows a week in which Brent gained more than 6% amid Houthi attacks and fears of additional disruption to Gulf supply. Gold futures are rebounding roughly 0.5% toward $4,028, helped by the pullback in oil and renewed demand around the $4,000 level.
Today’s domestic economic calendar is relatively light. The September Chicago Fed National Activity Index is due at 8:30 a.m. ET, followed by the October Dallas Fed Manufacturing Survey at 10:30 a.m. Treasury will also sell $69 billion of 2-year notes at 1:00 p.m., an important test of front-end demand before the Fed meeting. Tuesday brings durable-goods orders, home-price data, Consumer Confidence and new-home sales.
The larger market catalysts arrive later in the week. The Fed announces its policy decision Wednesday afternoon, while third-quarter GDP and September PCE inflation are due Thursday. Consensus expects annualized GDP growth around 3.2% and core PCE inflation near 3.1% year over year. Roughly one-third of the S&P 500 reports earnings this week, with Alphabet, Microsoft and Amazon particularly important because investors increasingly want evidence that rapidly rising AI capital spending is producing commensurate revenue, margins and cash flow.
Sector Highlights
Friday’s market was broadly weaker despite relative stability in Technology. Energy +2.51% led by a wide margin as crude surged, followed by Technology +0.35% and Real Estate +0.23%. The remaining sectors declined, led by Consumer Staples -1.83%, Consumer Discretionary -1.39%, Communication Services -1.39%, Financials -1.33%, Industrials -1.29%, Health Care -1.12%, Materials -0.99% and Utilities -0.66%. Breadth was negative at 1.72:1 on the NYSE and 1.60:1 on the Nasdaq, confirming that Friday’s weakness extended well beyond the major indexes.
Communication Services
- Verizon (VZ) reports third-quarter results this morning, with materials scheduled for 7:00 a.m. ET and its conference call at 8:30 a.m. Wireless subscriber growth, pricing, free cash flow and competition from SpaceX’s expanding wireless ambitions will be the major focus. Verizon entered the quarter with full-year adjusted EPS guidance of $4.99-$5.04 and expectations for 9%-10% free-cash-flow growth.
- Alphabet (GOOGL) reports Wednesday after the close and is one of this week’s key tests for the AI trade. Investors will focus on Google Cloud growth, AI monetization and the relationship between rising infrastructure spending and incremental earnings. Consensus expects approximately $128 billion of revenue and $3.00 of EPS.
Information Technology
- Cadence Design Systems (CDNS) reports after tonight’s close. Cadence sits directly in the semiconductor-design and AI-infrastructure supply chain, making demand for advanced chip design, digital twins and hyperscale-computing tools especially relevant after October’s sharp correction in semiconductor shares. The company’s webcast is scheduled for 5:00 p.m. ET.
- Microsoft (MSFT) also reports Wednesday, with consensus around $90.6 billion of revenue and $4.73 of adjusted EPS. Azure growth and AI-related capital expenditures will be watched as closely as earnings themselves as investors demand stronger evidence that hyperscaler investment is translating into free cash flow rather than simply additional infrastructure requirements.
- AI infrastructure financing remains a pressure point. CoreWeave (CRWV) and Nebius (NBIS) are each down about 3% premarket and have lost more than 30% this month as access to external financing becomes increasingly expensive. While neither is an S&P 500 constituent, the correction matters for Nvidia (NVDA), Dell (DELL), HPE and other suppliers whose growth assumptions depend partly on sustained neocloud spending.
Materials
- Nucor (NUE) reports after the close. The company previously guided to third-quarter EPS of $5.55-$5.65, up from $5.04 in the second quarter, with stronger expected earnings in both steel mills and steel products as realized pricing and volumes improve. The report should provide a useful read on U.S. manufacturing, construction demand and the durability of recent steel pricing.
Real Estate
- Welltower (WELL) reports after tonight’s close, followed by its conference call Tuesday at 9:00 a.m. ET. Senior-housing occupancy and rent growth remain the main fundamental drivers, but the stock’s sensitivity to long-term yields also makes financing costs and acquisition economics especially relevant with the 10-year Treasury still near 5%.
- Public Storage (PSA) also reports after the close. Self-storage demand, occupancy, rent trends and acquisition activity should provide another read on real-estate fundamentals as higher mortgage rates continue to suppress residential transactions and mobility. Monday’s earnings calendar also includes several other property and insurance names.
Health Care
- Surgery Partners (SGRY) is up roughly 21% premarket after reports that Bon Secours Mercy Health is in late-stage discussions to acquire a majority stake in the outpatient-surgery operator. The potential transaction would value Surgery Partners at roughly $6 billion including debt. Although SGRY is not an S&P 500 constituent, it is one of the morning’s largest company-specific moves and highlights continued strategic demand for lower-cost outpatient-care assets.
Consumer Discretionary
- Tesla (TSLA) is up roughly 2% premarket, leading the mega-cap rebound after last week’s post-earnings weakness. The broader market remains focused on Tesla’s capital-spending plans and the economics of AI, robotaxi and robotics investment after management reduced its 2026 capex outlook last week. The rebound is occurring alongside the broader improvement in growth-stock sentiment as oil prices decline.
