Market Report, 2026-10-23

Stocks showed weakness this week, albeit very limited in scope. Renewed concerns about whether artificial intelligence-related infrastructure investments can be justified by future revenue surfaced, a theme that has become increasingly common as we approach the end of the year.

Other than the Dow, which has generally been considered an index with a relatively defensive composition, all other major indices ended the week lower. The Dow gained 0.41% this week, closing at 52,215. The NASDAQ fell 0.71% to 25,955, influenced largely by semiconductor stocks. The S&P 500 declined 0.47% to 7,624.

The communication services sector fell the most, declining by more than 4% this week, partially because of concerns surrounding Meta's capital expenditure plans. Industrial stocks followed with a decline of nearly 2%, as many of their constituents occupy critical positions within AI supply chains. Defensive sectors rose considerably, while energy stocks rallied significantly because of higher oil prices.

Treasury bonds rallied amid a flight to safety triggered by stock market weakness. The 5-year Treasury yield declined by 9 basis points this week to 4.81%, while the 10-year yield declined by 10 basis points to 5%. This demonstrated the diversification benefits of fixed income investments, which have been relatively weak over the past few years.

Economic data this week pointed to a significantly slower housing market, as mortgage rates remained elevated while home prices continued to stay high. Consumer sentiment continued to drift lower as inflation concerns mounted. Preliminary business surveys showed continued expansion in business activity.

Next week will be packed with economic data releases. An interest rate-setting decision is scheduled, followed by a key inflation report the next day that will help inform our outlook.

Thank you for listening. Adams Wealth Advisors wishes everyone a great weekend, and we will be back next Monday.