The S&P 500 Index ($SPX) (SPY) closed down by -0.06% on Monday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.38%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.71%. December E-mini S&P futures (ESZ26) fell -0.04%, and December E-mini Nasdaq futures (NQZ26) fell -0.72%.
Stock indexes settled mixed on Monday, with the Dow Jones Industrials posting a 2.5-week high. The broader market was under pressure Monday from higher crude oil prices, with WTI crude closing up more than +2% on concerns about escalating tensions in the Middle East after repeated Houthi attacks on Saudi Arabia from neighboring Yemen. Weakness in chipmakers and AI-infrastructure stocks also weighed on the overall market on Monday.
Hawkish comments from Cleveland Fed President Beth Hammack on Monday were bearish for stocks when she said inflation pressures are broad-based, not concentrated, and that restrictive Fed policy is needed to reach 2% inflation.
Stocks have support from the prospect of solid quarterly earnings results that will begin this week. Goldman Sachs on Monday raised its three-month view on global equity markets to overweight from neutral, saying, “Earnings growth remains supportive for equities and the recent valuation de-rating has improved asymmetry into the third-quarter earnings season.” Strength in energy producers also supported the overall market on Monday.
Market activity was below normal, as the cash Treasury market was closed on Monday for the Columbus Day bank holiday.
According to data compiled by Bloomberg Intelligence, Q3 S&P 500 profits are expected to climb by +25% from a year earlier, up from a July estimate of 22%. Q3 earnings season begins this week when US money center banks report. On Tuesday, Goldman Sachs, JPMorgan Chase, Citigroup, and Wells Fargo & Co. report results; on Wednesday, Bank of America and Morgan Stanley report.
Nov WTI crude oil prices (CLX26) closed up more than +2% on Monday after Iran-backed Houthi rebels in Yemen launched drone and missile attacks against Saudi Arabia over the weekend, raising the risk of escalation that could draw the US into the conflict. Also, there’s been a recent escalation of drone and missile attacks against vessels traversing the Strait of Hormuz, limiting energy exports from the region. Limiting gains in crude are the prospects of Russia releasing diesel supplies into the global market after the US Treasury issued a waiver for previously sanctioned Russian fuel. Last Friday, Russia said it will partially lift its ban on diesel exports, allowing 500,000 MT of diesel fuel to reach international markets following an agreement between Russian President Putin and US President Trump.
Markets are discounting a 22% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled mixed on Monday. The Euro Stoxx 50 closed up +0.45%. China’s Shanghai Composite closed down -0.43%. Japan’s Nikkei-225 Stock Average did not trade, as Japanese markets were closed today for the Health Sports Day holiday.
Interest Rates
December 10-year T-notes (ZNZ6) closed down by -1 tick on Monday. The 10-year T-note yield did not trade on Monday, as the cash Treasury market was closed for the Columbus Day bank holiday. Dec T-notes were under pressure on Monday as higher crude oil prices raised inflation expectations. Also, hawkish comments from Cleveland Fed President Beth Hammack were bearish for T-notes, as she said the Fed needs a more restrictive policy to reach 2% inflation.
European government bond yields moved lower on Monday. The 10-year German bund yield fell -0.4 bp to 3.477%. The 10-year UK gilt yield fell -0.3 bp to 5.440%.
ECB Governing Council member Yannis Stournaras said the ECB may raise interest rates again to curb inflation but without rushing any action, suggesting an ECB rate hike this month is less likely than one in December.
Markets are discounting a 12% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks fell on Monday, weighing on the overall market. Lumentum Holdings (LITE) closed down more than -9% to lead losers in the Nasdaq 100, and Sandisk (SNDK) closed down more than -5%. Also, ARM Holdings (ARM) and Micron Technology (MU) closed down more than -4%, and Marvell Technology (MRVL), Intel (INTC), and Seagate Technology Holdings Plc (STX) closed down more than -3%. In addition, Advanced Micro Devices (AMD), Lam Research (LRCX), KLA Corp (KLAC), Microchip Technology (MCHP), and Western Digital (WDC) closed down more than -2%.
Airline stocks retreated on Monday after crude oil prices rose more than +2%, which raises fuel costs and curbs the profitability prospects of the companies. JetBlue Airways (JBLU) closed down more than -5%, and Alaska Air Group (ALK) closed down more than -3%. Also, United Airlines Holdings (UAL), Delta Air Lines (DAL), and Southwest Airlines (LUV) closed down more than -2%, and American Airlines Group (AAL) closed down more than -1%.
Energy producers and service providers moved higher on Monday after WTI crude oil rose more than +2%. APA Corp (APA) and ConocoPhillips (COP) closed up more than +2%, and Diamondback Energy (FANG), Chevron (CVX), Devon Energy (DVN), ExxonMobil Holdings (XOM), Occidental Petroleum (OXY), and Phillips 66 (PSX) closed up more than +1%.
IonQ (IONQ) closed down more than -9% after agreeing to buy Elisity Inc. for as much as $1.3 billion in an all-stock transaction.
Chipotle Mexican Grill (CMG) closed down more than -3% after Starbucks said it has no plans to acquire the company.
Enact Holdings (ACT) closed down more than -2% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $44.
Adobe (ADBE) closed down more than -1% after Wells Fargo Securities double-downgraded the stock to underweight from overweight with a price target of $225.
First Tracks Biotherapeutics (TRAX) closed up more than +6% after reporting topline results from an early-stage trial of its experimental therapy for celiac disease.
Meta Platforms (META) closed up more than +3% after releasing a new artificial intelligence model called Muse Wonder, which the company claims has “frontier capabilities.”
Vylor Inc (VYLR) closed up more than +3% after UBS initiated coverage on the stock with a buy recommendation and a price target of $89.
Biogen (BIIB) closed up more than +1% after JPMorgan Chase upgraded the stock to overweight from neutral, with a price target of $300.
Earnings Reports (10/13/2026)
Albertsons Cos Inc (ACI), Citigroup Inc (C), Domino’s Pizza Inc (DPZ), Goldman Sachs Group Inc/The (GS), Johnson & Johnson (JNJ), JPMorgan Chase & Co (JPM), UnitedHealth Group Inc (UNH), Wells Fargo & Co (WFC).
