Newsletter — week of October 26, 2026

Market performance

The S&P 500 ended the week of October 26–30 slightly lower, down 0.57%:

The rotation seen in recent weeks continued, with the Nasdaq underperforming again, down 2%:

The Nasdaq 100 ended October at −6.65%, its worst month since March 2025, when Trump’s tariffs were introduced.

It was a very eventful week, far more so than the S&P 500’s modest 0.57% decline might suggest.

Market news

The Fed holds rates, but markets expect a hike in December

On Wednesday, October 28, the Fed (the US central bank) left its rates unchanged in the 3.75%–4.00% range. Two committee members voted for a 0.25-point hike, and the statement still describes inflation as “elevated.” According to the CME FedWatch tool, which infers market expectations from futures contracts, the Fed is expected to raise rates twice more by March 2027:

This remains a limited adjustment, but it is enough to weigh on technology stocks, whose profits are expected far in the future and which need financing to invest. The next inflation figures will therefore be decisive, and they will again be closely tied to the geopolitical situation. And on that front…

Oil: still at its highest since April

Brent stayed above $116 and WTI (the US benchmark) above $103. Brent and WTI are up nearly 11% and 14% over October. On Thursday, hopes of renewed dialogue between the United States and Iran had pushed prices lower, before incidents in the Strait of Hormuz sent them back up on Friday.

The Trump administration also warned its Gulf allies to prepare for US strikes on Iran as early as November 4, the day after the US midterm elections.

As long as the strait is not secured, oil will keep fueling inflation and therefore the Fed’s rate hikes. Our oil hedge is more relevant than ever!

Earnings season: disappointments are heavily punished

This week, disappointing results were punished very harshly on the market; below are some particularly large drops:

Intel: −28.58% after revenue guidance of $15–16 billion versus the $17 billion expected;

Reddit: −29% after a lower-than-expected number of daily active users and current-quarter revenue guidance below expectations;

ServiceNow: −26.95% after announcing a slowdown in the growth of its upcoming order backlog (from 21% to 18.5% in the fourth quarter);

Alphabet (Google): −12.64% after revenue and earnings below expectations.

These falls show a tense market: investors expect a lot, and the slightest disappointment is punished.

Friday, October 30: a capitulation session?

Friday saw the Nasdaq’s worst session since June:

Nasdaq: −2.86%

S&P 500: −1.82%

Semiconductor index: −7.20%

Amazon’s and Alphabet’s results revived fears about the cost of AI, and two Fed officials said rates might need to rise to curb inflation. The VIX (the volatility index, which measures the size of the moves investors expect on the S&P 500 over the next 30 days) climbed sharply, from 13 to 19.42 after an intraday peak near 24:

This level remains below 20 and well short of the stress peaks above 30 seen during major panics. This is because it was mainly technology stocks that suffered.

The VIX is nonetheless rising, and we could see volatility return in the coming weeks before a genuine capitulation session (VIX above 30) that would definitively mark a bottom on the major indices. Our allocation lets us stay calm in every scenario.