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Weekly Market Commentary - Week Ending October 23, 2026

by Fortem Financial October 20, 2026

The oversold bond market is finally beginning to stabilize

Oversold bond markets are finally starting to stabilize, mostly because of cracks in AI plays. Bond yields could consolidate for a period of time. However, any bond market reprieve should prove temporary, partly because a cap on yields reduces downside economic risks. Global growth has been firming, and inflation remains elevated and sticky.

 

Market & Economic Highlights

1 . Core CPI climbed 0.33% in September after a 0.29% increase in August. This has pushed the three-month annualized rate on core CPI to 3.41%, the fastest since September 2025. The upside surprise in core inflation was driven by a broad range of categories rather than one-off factors that are easy to dismiss.

2 . Inflation remains elevated relative to the Fed’s target while employment remains in line. The tightening bias is not going away.

3 . Despite inflation data, rising concerns around AI-related credit risks and tighter financial conditions have taken center stage, leaving the market reaction relatively muted. We continue to think the Fed will ultimately skip in October and wait until December.

4 . U.S. retail sales growth was mediocre in September (headline sales rose 0.8%), but stronger than confidence measures implied.

5 . The AI trade is getting sloppy amid intensifying competition and doubts about returns on massive AI investments. We are nowhere ready to write off the AI investment boom. Demand for compute continues to outpace supply, while rising adoption should fuel further investment. The five hyperscalers are expected to spend a combined $892 billion this year and $1.1 trillion next year. Their strong balance sheets and cash flow generation make their spending plans relatively insensitive to higher borrowing costs.

6 . The median duration of Fed tightening cycles since 1970 (11 cycles) has been 16 months. On average, stocks have fallen 13.7% from peak to trough during the cycle.

7 . S&P 500 EPS growth in 2026 is estimated at 31.6%. This compares to the 25-year average of 7.6% EPS growth.

8 . Energy and technology have seen the largest upward revisions to 3Q earnings estimates.

9 . Friday, Oct. 9, was the lowest volume full trading day for the S&P 500 ETF (SPY) since 2005.

10 . A big win by the Democrats in two weeks would signal that U.S. corporate income and capital gains taxes have secularly bottomed. Further, the regulatory pendulum has swung toward an anti-corporate tail risk.

Source: Bob Doll, Crossmark Investments

 

Market and Index Changes for the Week Ending 10/16/2026

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments. Data provided by Refinitiv.

 

Sincerely,

Fortem Financial
(760) 206-8500
team@fortemfin.com

 

 

Latest News

 

Fed sees AI boom adding to inflation headache, but others may pay for the medicine

The artificial intelligence boom has left central bankers faced with cooling the rest of the economy to lower price pressures amplified by an industry of marquee names like Amazon, ​Apple and Anthropic considered immune to rate hikes.

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Global food inflation is expected to intensify as supply shocks pile up

Muhamad Yasin, a 63-year-old parking attendant in central Jakarta, says he has cut back on meals as rising prices have put food staples beyond his reach.

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Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

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Five Star Professional Disclosure:
The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
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Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

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