Technology shares carried the week’s losses. The Nasdaq 100 fell 3.26% in the five sessions to 22 October, and the technology sector fell 3.62%, the weakest of the sectors tracked. The S&P 500, which carries a heavier technology weighting than the other broad indices, fell 1.04% over the same stretch.
The Dow 30 moved the other way, adding 1.32%, and the Russell 2000 gained 0.61%. The split showed up across sectors too: financials rose 2.5%, health care rose 2.32%, consumer discretionary added 1.41% and energy gained 1.52%, all outpacing the broad market even as technology dragged the index-weighted averages lower.
Rates and the dollar
Treasury yields climbed through the week. The two-year yield stood at 4.81% on 21 October, up from 4.79% the previous session and against 3.45% a year earlier. The ten-year yield rose to 5.13%, up from 5.12% the day before and compared with 3.98% a year ago. The gap between the two, the ten-year minus two-year spread, narrowed to 0.31 percentage points from 0.32 points, and sits well below the 0.52-point reading of a year earlier, a flatter curve than investors have seen for some time.
Oil moved in the opposite direction to yields. WTI crude fell to $107.89 a barrel from $110.01, though it remains far above the $58.34 level of a year earlier. The trade-weighted dollar index eased slightly to 121.41 from 121.57, a level that itself sits above the 120.67 reading from a year ago.
Labour market data continued to point to a tight hiring environment. Initial jobless claims fell to 194,000 for the week, down from 200,000 the week before and well below the 222,000 recorded a year earlier, a trend that has run through most of the year.
What moved and why
The week’s pattern, technology weak and the Dow and defensive-leaning sectors firmer, lines up with the move in long-term yields. A ten-year yield at 5.13%, its highest level of the stretch shown here, tends to weigh hardest on the shares most dependent on future earnings growth, which is where the technology sector sits. Financials, by contrast, often benefit from a steeper or higher-rate environment on net interest income, and the sector’s 2.5% weekly gain was the strongest of those tracked.
The fall in jobless claims, alongside yields that moved up rather than down, suggests markets are not pricing in an imminent loosening of labour conditions. That combination, firm employment data and rising long rates, has coincided with pressure on rate-sensitive growth shares in each of the past several weeks.
The week ahead
Three releases dominate the calendar. The Federal Reserve’s rate decision from the FOMC meeting is due 28 October at 2:00pm ET. The following morning, 29 October at 8:30am ET, the Bureau of Economic Analysis publishes its advance estimate of third-quarter 2026 GDP. The BEA follows with its Personal Income and Outlays report for September 2026 at the same time, which includes the PCE inflation reading the Fed watches most closely.
Taken together, the three releases will give the clearest read yet on whether the current combination, a flattening yield curve, rising long-term rates and falling jobless claims, continues or breaks in either direction.