Weekly Market Update for October 23, 2026
by Gavyn Jensen-Schneider, Research Associate
Capital continued to rotate out of AI-related names this week even after some strong earnings showings. The S&P 500 finished the week down -0.47%, while the Nasdaq fell -0.71%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.99%, down -10 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, closed at 4.31%, down -3 bps from last week.
Rotation out of AI has been the trade of the week; while the S&P 500 and Nasdaq both fell, the equal weight S&P 500 index (SPXEW) and Russell 2000 (RUT) were up +1.13% and +2.00% on the week. The S&P 500 is weighted by market cap, with the top 10 companies—all of which are AI-related names—representing 41% of the index. In our view, this rotation is a realization by investors that opportunities abound outside of AI; while big tech and the AI infrastructure buildout get the headlines and move the major indices, innovation in smaller industries should not be overlooked as earnings growth has been broad-based across public markets.
Meta was one of those heavyweights that jostled indices around this week. In its Wednesday earnings report, Meta topped Wall Street expectations nearly across the board. Improvements to ad algorithms enabled by Meta’s internal AI models drove growth in ad impressions (+10%), average price per ad (+14%), and topline revenues (+26%). Though AI is driving improvement, uncertainty surrounding the costs of FY27 capital expenditures for the AI buildout has ultimately pressured the stock.
Technology heavyweights Alphabet (GOOGL), Microsoft (MSFT), and Amazon (AMZN) headline as Q3 earnings season crescendos next week. Wednesday sees the 7th FOMC meeting of the year, in which the Fed is expected to leave interest rates unchanged. Q3 GDP and September PCE inflation data headline the macroeconomic data releases as we close out the month of October.
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