The Dow Jones Industrial Average (Dow) lost 0.9 percent, the Standard & Poor’s 500 Index (S&P 500) fell 0.6 percent, and the Nasdaq Composite Index (Nasdaq) shed 2.0 percent for the week ending Oct. 30. Sector breadth was positive, with nine of the S&P sector groups closing higher and two closing lower. The healthcare sector (3.1 percent) was the strongest performer while the communication services sector (8.5 percent) was the weakest.

*See below for Index Definitions

Market Observations: 10.26.2026–10.30.2026

The S&P 500 finished lower for a third straight week, led by the technology and telecom sectors, after a mixed batch of earnings reports and forward guidance amplified worries around the sustainability of the artificial intelligence boom. Traders also digested an uneventful Federal Reserve (Fed) meeting and seemed reluctant to “buy the dip” ahead of this week’s midterm elections. For the month of October, the S&P 500 lost 0.9 percent while the tech-heavy Nasdaq Composite plunged by 5.3 percent.

FOMC Meeting: As widely expected, the Fed left interest rates unchanged at a range of 3.75 to 4.00 percent and reiterated their commitment to containing inflation. Governor Cook and Cleveland Fed President Hammack dissented, preferring to raise rates by a quarter percentage point. In the post-meeting statement, the committee indicated that the economy is expanding at a “strong” pace, an upgrade over a pace deemed “solid” during the September meeting. The committee also noted that the “accumulation of more information” will help the committee determine the policy stance to ensure a timely return of inflation to the committee’s 2 percent goal. Separately, Fed Chairman Warsh said the central bank will phase in an adjusted meeting schedule, with plans to hold rate-setting votes at seven out of eight meetings next year. The Fed will use one of those eight meetings in 2027 to discuss “broad monetary policy strategy” and won’t vote on its benchmark interest rate or release a statement following that gathering. In 2028, two of the eight meetings will then be reserved for broad discussion instead of setting interest rates.

Q3 Earnings: Through Friday Oct. 30, 301 companies in the S&P 500 have released third quarter results, with over 82 percent beating expectations. Aggregate earnings for this group are up over 29 percent from a year ago, solidly ahead of the roughly 25 percent projected growth rate at the end of September. On the sector level, healthcare and energy have posted the biggest upside surprises, while energy and technology have delivered the strongest growth rates. According to Bloomberg, all 11 of the S&P sector groups are expected to report year-over-year growth, with seven of these forecast to deliver double-digit gains. Full-year expectations call for S&P 500 earnings to grow by 29.4 percent this year, followed by 20.5 percent in 2027.

Economic Roundup: The U.S. economy expanded in the third quarter at the fastest pace in a year, powered by heated business investment and a resilient American consumer. Inflation-adjusted gross domestic product increased an annualized 3.4 percent in the three months through September after growing 2.2 percent in the second quarter. According to the Bureau of Economic Analysis, the economy remained energized by strong business spending, largely tied to investment in artificial intelligence. Outlays for equipment contributed more to GDP in the third quarter than at any time since 2011 outside of the pandemic rebound. Household spending was similarly strong, increasing an annualized 3.8 percent for a second straight quarter, even as rising prices erode paychecks and keep consumer sentiment depressed. Meanwhile, separate figures from the agency showed inflationary pressures mounted in September. The personal consumption expenditures price index rose 0.5 percent last month, the most since March. Excluding food and energy, the so-called core gauge advanced 0.3 percent. Both figures matched expectations. Lastly, US consumer confidence unexpectedly rose in October for the first time in four months on brighter views about the job market and business conditions. The Conference Board’s gauge increased 7.5 points to 91.7, the highest since June. The figure topped all projections in a survey of economists.

The Week Ahead:  All eyes will be on the outcome to Tuesday’s midterm elections with polls showing Democrats likely to recapture a majority of seats in the House, while the Senate race appears up in the air. The focal point of the data calendar will be Friday’s payroll report for the month of October. According to Bloomberg, economists expect nonfarm payrolls to expand by 60,000, while the unemployment rate is forecast to hold at 4.2 percent. Other gauges of labor market activity include the September Job Opening and Labor Turnover Survey (JOLTS) data on Tuesday and the October ADP report on Wednesday. Other economic reports of interest include the October Institute for Supply Management (ISM) indices, with manufacturing due Monday and services due Wednesday.  It will be another busy week in earnings, with 140 members of the S&P 500 scheduled to release third quarter results. Tech names reporting include Apple, AMD, and Palantir. Other large-cap names announcing results are Amgen, McDonald’s, Pfizer, Uber, and Booking Holdings. It will be a busy week for Fed speeches with eight Fed heads on the docket.

— By Michael Schwager, Chief Market Strategist, Managing Director

Definitions

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally defined as the leaders in their industry. It has been a widely followed indicator of the stock market since Oct. 1, 1928.

Standard and Poor’s 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Nasdaq Composite Index is a broad-based capitalization-weighted index of stocks in all three Nasdaq tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of Feb. 5, 1971.

This material contains opinions of the author, but not necessarily those of Guggenheim Partners, LLC, or its subsidiaries. The opinions contained herein are subject to change without notice. Forward-looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC.

Investing involves risk, including the possible loss of principal.

Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Wealth Solutions, LLC, Guggenheim Private Investments, LLC, Guggenheim Investments Loan Advisors, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Japan Limited, and GS GAMMA Advisors, LLC.

©2026 Guggenheim Investments. All rights reserved. #6078355