Oil Falls but Stocks Cool as Yields Stay Warm
Published as of: October 5, 2026, 9:11 a.m. ET
(Monday market open) Coming days provide a breather between the recent data blitz and earnings season just ahead. Stocks edged lower early with Treasury yields holding near two-decade highs despite last Friday's soft U.S. jobs data. Falling crude helped arrest early Wall Street losses after Europe agreed to release about 100 million barrels of diesel and Middle East crude exports rose.
This week features results from PepsiCo (PEP) and Delta Air Lines (DAL), both barometers of consumer demand as gas prices soar. Also, watch for any pre-earnings updates from major firms, which sometimes arrive just before reporting season. Third quarter S&P 500 earnings are expected to rise 29.5% year over year, FactSet said. In fixed income, Treasury auctions could paint the demand picture.
On Wall Street Friday, stocks gained to end a mixed week, fueled by tech after the jobs report eased rate hike odds. The tech-heavy Nasdaq hit all-time intraday highs and rose slightly last week while the S&P 500 Index slipped. "The money flow continues to shift towards the tech and AI infrastructure complex at the expense of the 'non-AI' areas of the market, which could be impacted by higher interest rates," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR).
Three things to watch
- Jobs report addendum: Friday's jobs data put Federal Reserve policy in sharp focus as odds of an October rate hike stood at 20% early Monday, down from 70% a week ago, according to the CME FedWatch Tool. Chances are 84% of a hike before year-end. After raising rates last month for the first time in three years, it would be rare for the Fed to stop after one hike. Still, relatively slow jobs growth—interrupted by August's big jump that now looks seasonal—might give the Fed pause. Two high profile policymakers sounded dovish last week. The Fed has historically varied policy changes, sometimes changing rates each meeting and other times every other meeting, and the pace can affect market response. Stocks might feel less pressure from a slower hike regime. September wages rose just 0.1%, soothing fears that a tighter labor market would fuel the inflation burn and perhaps giving the Fed another excuse to walk slowly. Minutes from the Fed's last meeting arrive Wednesday.
- AI impact on labor revisited: Lethargic jobs growth could hint that AI-related competition has slowed hiring. Last week's light layoffs and soft jobs number suggest a "low hire, low-fire" climate with companies not wanting to adjust labor supply as they try to boost productivity through new technology. Of note, jobs growth was particularly weak recently in some sectors more exposed to AI including information, technology, and professional and business services—traditionally white-collar industries. "Tech has been pretty great if you're an investor," said Kevin Gordon, head of macro research and strategy at SCFR, after the jobs report. "If you're an employee, not so much." Tech sector employment is at its lowest level since December 2020. The possible AI impact on jobs now elevates data including gross domestic product (GDP), factory orders, and other hallmarks of economic vigor. If GDP continues its recent moderate rise without big increases in hiring, it could back Fed Chair Kevin Warsh's contention that AI is helping productivity. Proof is in the pudding, as productivity would ultimately need to rise and inflation remain checked. The next productivity update from the government comes early next month.
- Only two sectors show outperformance: Market breadth has been worthy of scrutiny of late; as noted last week, while the S&P 500 Index sits near all-time highs, fewer than half of its members are above their 200-day moving averages. This disparity is also evident from a sector view. As of October 1, the broad-market barometer has gained roughly 12% year to date, but just two sectors—energy and information technology—have posted double-digit percentage gains (40% and 29%, respectively). The remaining nine sectors are underperforming the S&P 500, with three groupings—consumer discretionary, financials, and utilities—in the red for the year. Breadth within sectors is similarly lopsided. Roughly two-thirds of energy and tech names are north of their 200-day averages, compared with less than 25% of names in the communication services, consumer staples, real estate, and utilities sectors. Energy's strength is a double-edged sword, as rising fuel prices have negative reverberations for other sectors, and mounting concerns around the AI trade may be making the technology sector more volatile.
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On the move
- Cerebras (CBRS) posted nearly 5% early gains following a post by OpenAI CEO Sam Altman, who called Cerebras a "close partner." This came after a research firm said OpenAI was using Nvidia (NVDA) chips, not Cerebras hardware, in its latest AI model, Barron's reported.
- Autodesk (ADSK) climbed 4% early on news that French firm Schneider Electric was buying Autodesk rival PTC (PTC) for $22.6 billion, according to Reuters. The valuation of the deal was considered low due to worries about AI's impact on software companies. Schneider builds equipment used in data centers. PTC shares jumped 36%.
- Vistra (VST) rose 3% after the U.S. Department of Energy approved a $4 billion federal loan package that will help the company upgrade three nuclear plants, Yahoo Finance reported.
- Intel (INTC) slid nearly 4% early, hurt by Tesla (TSLA) CEO Elon Musk's announcement that he's had discussions with Intel's rival chip maker Taiwan Semiconductor Manufacturing (TSM) about a collaboration.
- Crypto-related stocks rose early behind a 2% climb in bitcoin.
- The Cboe Volatility Index (VIX) rose 5% this morning, sometimes a sign of potential equity struggles.
- Data today is limited to the 10 a.m. ET ISM Non-Manufacturing PMI®. The number to watch is prices paid, which has been rising and feeds into key inflation meters watched by the Fed.
- The euro hit a 17-month low against the dollar, hurt by concerns about rising pressure on French debt and weak French banking stocks, Reuters reported. Chances of another European Central Bank (ECB) rate cut fell with eyes not only on France but Spain, where the prime minister called for an election. European stocks climbed, nevertheless.
- The PHLX Semiconductor Index (SOX) finished Friday near three-month highs but still 10% below the all-time peak of mid-June. Micron's (MU) solid earnings reinforced strong chip demand expectations. Nvidia hit a record high Friday as big tech continues propping the market.
- Tesla (TSLA) rose almost 5% Friday after reporting third-quarter vehicle deliveries of more than 486,000. Analysts had expected roughly 460,000. Second quarter deliveries were 480,000.
- SpaceX (SPCX) literally launched its way to a 7% rally Friday with three successful rocket launches in a 13-hour period, including one that transported four astronauts to the International Space Station.
More insights from Schwab
Decision tree: Across all kinds of decisions—from our salaries to our weekend plans—we tend to prefer options that progressively get better, if given the choice. Why is it that our minds place such a high premium on an upward trajectory? The new episode of Choiceology with Katy Milkman looks at why we're drawn to experiences that appear to improve over time.
Sector check: Get Schwab experts' six- to 12-month outlooks on the S&P 500's 11 sectors in our monthly Schwab Sector Views. The updated version highlights industrials, health care, and communication services among the sectors expected to benefit from fundamentals.
Chart of the day
Data source: S&P Dow Jones Indices. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The percentage of S&P 500 stocks trading south of their 200-day moving average ($SPXA200R—candlesticks) fell to 38.4% last week. In doing so, it breached its March bottom and reached its lowest level since April 2025, when markets were roiled by volatility surrounding "Liberation Day." Friday's lighter-than-expected jobs report lifted stocks, though, and the 200-day measure ended the week at 41.9%. Meanwhile, the S&P 500 Equal Weight Index (SPXEW—blue line), another measure of market breadth, posted its seventh straight weekly loss. This matched a streak that's happened only twice before, in July 2002 and May 2022. In both of those slumps, the equal-weighted index suffered double-digit percentage losses. This time, the index is down just about 5.8% from its August 14 levels.
The week ahead
October 6: Expected earnings from RPM International (RPM) and Constellation Brands (STZ).
October 7: Expected earnings from Levi Strauss (LEVI) and Applied Digital (APLD).
October 8: Expected earnings from PepsiCo (PEP).
October 9: Expected earnings from Delta Air Lines (DAL) and preliminary University of Michigan October consumer sentiment.
October 12: No major earnings or data expected.
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