CAPITAL SEASONS
Weekly Market Commentary | Week ending 9 October 2026
This week in 60 seconds
- The S&P 500 set a new record, then eased as the US 10-year yield touched its highest level since 2002.
- Spring holds. Our Market Pressure Index rose from 6.48 to 6.78, helped by calmer volatility and a smaller monthly loss across the sectors.
- Underneath, the market is still running on few legs. Only 4 of 11 major US sectors rose this month, and only a quarter of the 202 sector and industry funds I track sit above their 50-day average.
- The small-cap warning light has now been on for a third week.
- Next week brings US inflation data and the start of earnings season. Profits are expected to grow almost 30%.
Global Context: what happened, and why
What happened. The S&P 500 reached a record of 7,844.52 during the week. It then eased as a bond market selloff pushed the 10-year Treasury yield to 5.3645%, its highest since April 2002. By Friday the yield had settled back to 5.27%.
From Monday’s open to Friday’s close, the S&P 500 gained 0.96% and the Dow Jones Industrial Average gained 1.15%. Both closed Friday near record territory: the S&P 500 at 7,811 and the Dow at 51,655.
Over the past month, the picture is more mixed:
| Fund | Ticker | 1-month change |
| SPDR S&P 500 ETF | SPY | +1.0% |
| Invesco QQQ, tracking the Nasdaq-100 | QQQ | +4.1% |
| SPDR Dow Jones Industrial Average ETF | DIA | −3.1% |
| iShares Russell 2000, small companies | IWM | −5.8% |
| SPDR Gold Shares | GLD | −5.3% |
| Invesco DB US Dollar Index Bullish | UUP | +3.5% |
Volatility stayed calm: the VIX closed at 14.84.
Why it happened. Dr Bart’s three forces are pulling against each other.
Earnings are the force holding the market up. Analysts expect S&P 500 earnings to grow 29.6% this quarter compared with a year ago. That would be the third quarter in a row above 25%.
Interest rates are the force holding it back. When a government bond pays more than 5%, shares face real competition for every rand and dollar. The selling in bonds shows in the corporate bond market too: both the iShares iBoxx High Yield Corporate Bond ETF (HYG) and the iShares iBoxx Investment Grade Corporate Bond ETF (LQD) slipped below their 200-day averages this month.
Oil sits in the middle. Concern over supply eased after President Trump said the US would not attack Iran before next month’s midterm elections and spoke of “productive” talks to end the war. WTI crude still settled at $91.85, with Brent at $104.72.
South Africa
The Reserve Bank raised the repo rate by 25 basis points to 7.25% in a unanimous vote, taking the prime lending rate to 10.75%. Governor Lesetja Kganyago cited renewed upward pressure on fuel prices and warned that headline inflation could rise above 5% in the final months of 2026 and into early 2027. The final rate meeting of the year is in November.
The rand ended the week around R16.50 to the dollar. It firmed slightly from about R16.64 the previous Friday, but it is still 3.2% weaker than a month ago. For South Africans holding dollar shares, that monthly weakness has added to their rand value. This week’s small recovery took a little of it back.
South African shares had a harder month. The iShares MSCI South Africa ETF (EZA), which measures the JSE in dollars, fell 12.1% and now sits 9.3% below its 200-day average. At home, inland 95 petrol reached a record R30.25 a litre from 7 October.
United States
The labour market is cooling without breaking. September’s jobs report showed only 29,000 new jobs, against forecasts of 84,000–95,000, and unemployment rose to 4.2%. Yet layoffs remain rare: new jobless claims fell to 197,000 in the week to 3 October.
Consumers are feeling the strain. The University of Michigan’s preliminary October sentiment reading fell to 46.3, below the 47.8 expected. Consumers’ one-year inflation expectations rose to 4.7%.
On Thursday, Delta Air Lines (DAL) cut its full-year earnings forecast to $5.10–$5.60 a share, down from $6.50–$7.50 in July. It’s an early sign of what high fuel costs are doing to companies outside the energy sector.
Earnings season opens next week with the big banks. Citigroup (C), JPMorgan Chase (JPM), Goldman Sachs (GS) and Wells Fargo (WFC) report on Tuesday, and Bank of America (BAC) and Morgan Stanley (MS) on Wednesday. Companies have been unusually positive in their outlooks: of 116 S&P 500 companies that gave guidance for the quarter, 72 gave positive guidance.
Global Markets
Asia had a difficult week. Asian shares were heading for a second weekly fall as investors worried about energy prices, bond market turmoil and the huge sums needed to fund AI investment. The iShares China Large-Cap ETF (FXI) is down 4.4% on the month and 18.5% over the year.
Emerging markets overall slipped. The iShares MSCI Emerging Markets ETF (EEM) fell 4.0% on the month, but the iShares MSCI Brazil ETF (EWZ) stood out with a 10.3% gain. Commodity exporters are not moving as one group.
Europe closed Friday more than 1% higher in many markets. The euro, however, fell for a fifth straight week, sitting just under $1.12, as investors worried about France’s record public debt. The clearest single story was telecoms. Deutsche Telekom (DTEGY) fell about 7–8% after SpaceX agreed to buy US mobile spectrum for its Starlink Mobile service, because the move threatens T-Mobile US (TMUS), in which Deutsche Telekom holds 54%.
The Three Forces
| Region | Earnings | Inflation | Interest rates |
| South Africa | Under pressure | Under pressure | Under pressure |
| United States | Improving | Under pressure | Under pressure |
| Global | Stabilising | Under pressure | Under pressure |
Guidance: what it means for my portfolio
- A record index is not a broad market. When technology carries the index, a diversified portfolio can lag the headline number. That’s not failure. It’s what diversification feels like in a narrow market.
- Rates are the force to respect right now. With the 10-year above 5%, I’m asking more of every share I own: does its earnings yield beat what a government bond pays?
- Headlines are signals, not instructions. One week is a signal; two weeks is a pattern. I let my rules, not the news, decide when to act.
- Earnings season is a time for patience. Most of my holdings report in the next four weeks. I avoid acting within 14 days of a company’s results.
- The rand works both ways. A weaker rand flatters dollar holdings, but it can reverse quickly. I don’t build decisions on currency moves.
Capital Seasons Weather Map
This week’s Capital Seasons Weather Map registers Spring, with Mixed Conditions and a selective posture.
Trend: The S&P 500 (SPY) and the Nasdaq-100 (QQQ) are both above their 50-day averages, by 0.9% and 3.4%, so the Spring rule holds. The Dow (DIA) and small caps (IWM) are not, sitting 2.7% and 4.8% below.
Participation: Narrow. Only 4 of 11 sectors are positive over the month. Our measure of good-versus-poor ratings across about 3,400 US companies stands at +6.6%, little changed from +6.4%.
Volatility: Calm. The VIX is at 14.84, with a four-week average of 14.96.
Liquidity: Tightening. The dollar is up 3.5% on the month, and bond yields are at multi-decade highs.
Small-cap canary: For a third consecutive week, more than 10% of small caps carry our weakest ratings (10.3% this week). It is below the 15% level where I would reduce exposure, but it remains on my watch list.
This is a Spring of holding, not strengthening. I’m still planting, but selectively.
Sector-Sensei
Leading: Semiconductors dominated the month.
| Fund | Ticker | 1-month change |
| VanEck Semiconductor ETF | SMH | +5.8% |
| iShares Semiconductor ETF | SOXX | +6.6% |
| Technology Select Sector SPDR | XLK | +5.3% |
| iShares MSCI Brazil ETF | EWZ | +10.3% |
Lagging: Metals, defence and rate-sensitive sectors.
| Fund | Ticker | 1-month change |
| Sprott Junior Uranium Miners ETF | URNJ | −25.7% |
| VanEck Rare Earth and Strategic Metals ETF | REMX | −21.0% |
| Global X Uranium ETF | URA | −18.8% |
| Amplify Junior Silver Miners ETF | SILJ | −15.4% |
| Global X Copper Miners ETF | COPX | −12.9% |
| VanEck Gold Miners ETF | GDX | −11.9% |
| SPDR S&P Aerospace & Defense ETF | XAR | −10.4% |
| Real Estate Select Sector SPDR | XLRE | −6.9% |
| Utilities Select Sector SPDR | XLU | −5.5% |
The rotation is simple: money is going to companies whose earnings are growing fastest, and leaving rate-sensitive and commodity-linked areas.
Silicon Season
Semiconductors keep leading. The VanEck Semiconductor ETF (SMH) rose 5.8% over the month and is up 75.5% over the year.
There was a reminder of the risk on Thursday: tech stocks fell after a report that OpenAI’s annualised revenue was about $20 billion lower than previously estimated. They recovered on Friday. Inside the chip complex, the story still looks strong. Lumentum’s (LITE) CEO said optical parts are completely sold out through early 2029. On the other hand, Apple (AAPL) has reportedly cut component orders for its new iPhone 18 Pro models after rising memory chip costs forced price increases.
The scale of AI’s role is worth noting. Goldman Sachs estimates that nearly half of S&P 500 earnings growth in 2026 is tied to AI investment. When one theme carries that much of the earnings, any surprise in that theme carries further than usual.
Taiwan Semiconductor (TSM) reports on 15 October, and its results will be the first real read for the whole chip complex.
Portfolio Gardener
No weeds this week: none of my holdings fell below the quality floor. Two names are on close watch, and one swap is planned.
The swap. I’m considering replacing Glencore (GLNCY), a diversified miner, with Gerdau (GGB), a steelmaker. Analysts have been cutting their estimates for Glencore. Gerdau scores better on every balance-sheet test I use: low debt, more than twice the current assets it needs to cover short-term liabilities, and 27 years of dividends. I would buy Gerdau in two halves, around its results on 26 October.
The Telekom lesson. Deutsche Telekom (DTEGY) fell sharply on Friday’s spectrum news. My rule is not to sell into a headline gap. If its rating breaks below my floor next week, I’ll act. If it doesn’t, I’ll wait for the company’s results on 5 November, when management will need to address the new competition.
One to watch: Ryder System (R). Ryder sits right on my quality floor, but it reports on 22 October, so it stays untouched until then. If it slips, AerCap (AER), the aircraft lessor, is a like-for-like replacement I’m watching. Both lease equipment for a living.
Blackout season begins. From around 22 October, most of my holdings enter their earnings blackout. The next few days are the last clean window for any changes.
Mari’s overlay: Twenty of my thirty-six holdings sit below their 50-day average this week, even with the index at a record. That’s the narrow market showing up in my own book. It’s uncomfortable, but it’s the cost of not owning only one theme. I’ve seen this pattern before, and patience has usually been the better teacher.
These are my own portfolio decisions, shared for education. They are not recommendations.
What I’m watching next week
- US inflation data on Wednesday, 14 October, followed by producer prices on Thursday. A hot reading would revive talk of another Fed hike.
- Bank earnings: JPMorgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and Wells Fargo (WFC) on Tuesday. They are a read on credit and the consumer.
- Taiwan Semiconductor (TSM) on 15 October sets the tone for chips.
- The 10-year Treasury yield: does it hold above 5%?
- The small-cap canary: does a fourth week above 10% harden the pattern?
Just Starting Out
| How can the market hit a record when most shares are falling? An index like the S&P 500 gives bigger companies more weight. When a handful of very large technology companies rise strongly, they can lift the whole index, even if most other companies go nowhere or fall. That’s what “narrow” means. This matters for you because your portfolio probably doesn’t look like the index. If you own a spread of different companies, some weeks you’ll lag the headline number. That isn’t a sign you’ve done something wrong. A useful habit: when you hear “the market hit a record,” ask how many shares went up, not just how far the index moved. The answer tells you whether the Spring is broad or still on a few legs. |
Capital Seasons | Invest with the seasons. Not the noise. | capitalseasons.co.za
Capital Seasons publications are educational tools designed to support investor awareness and disciplined decision-making. They describe market conditions and investor context. They are not predictions and do not constitute personal financial advice.
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