End of Week Market Intelligence set up

Equity Research 9 October 2026 | 12:19PM EDT

End of Week Market Intelligence: set-up

US stocks are trading higher Friday and on pace for a ~1% gain for the week (for the Chris Hussey | S&P 500 as of Friday at 12:00PM) as investors are positioning ahead of 3Q earnings Goldman Sachs & Co. LLC season (which actually kicked off quietly this week) and ahead of the next move from Sarah Herr the Fed with the CPI report due out next Tuesday. | Goldman Sachs & Co. LLC

if you squint... This week brought an unremarkable ISM services survey, a still-eroding U Michigan Consumer sentiment survey, and 3Q26 results from PEP and DAL that point to still-shifting consumer tastes (services over soda) and rising input costs (especially jet fuel — see Bonnie Herzog’s “PEP: Slight Q3 beat but FY26 EPS guidance lowered, as expected given continued North American pressure - Maintain Buy” and Catie O’Brien’s “DAL: 3Q slightly below consensus; 4Q revenue outlook ahead of consensus”). On the oil front, Brent has risen a touch. And on the rates front, US 10-year Treasuries yields are little changed from where they started the week — still elevated at 5.25%.

But the story this week may have been less about what happened this week than about how investors are positioning ahead of what is scheduled to happen over the next few weeks: 3Q earnings season, another Fed meeting, and the Midterm elections. Along the way, we will be watching for inflation signs (CPI next week) and news on the AI trade (the hyperscalers report at the end of October). A few things that we are all setting up for:

n 3Q earnings. Ben Snider expects most companies to beat consensus estimates (27% yoy EPS growth for the S&P 500) as he discusses in last Friday’s note, “Q3 2026 earnings season preview.” Focus on: AI monetization and productivity gains. And Richard Ramsden set the tone for big bank results which come next week in “Banks 3Q26 Preview: Cautious optimism; focus on capital markets slowdown, strong NII, and moderating capital returns.” n The Fed. Rates are a big focus of markets with 10-year yields now sustainably above 5% and signs of sovereign debt cracks in Europe emerging — notably France — as Jari Stehn discusses in “ECB—Potential Implications of Rising Sovereign Stress.” Underlying the increase in rates is a post-pandemic echo-boom inflation impulse set off by the dual government policies of higher import tariffs and the US-Iran War’s impact on oil and refined product supply. This week, we got the FOMC Meeting minutes from the September meeting —

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs End of Week Market Intelligence

the first time the Fed raised rates this cycle (see “USA: FOMC Minutes Note ‘Most’ Participants Saw Another Increase as Likely ‘Appropriate by Year End,’ but Committee Will Approach Upcoming Meetings with an ‘Open Mind’”). And following this release, as well as the August core PCE data, and recent speeches by Fed Vice Chair Jefferson and New York Fed President Williams, we expect the second Fed hike in December, though we see a strong chance the FOMC ultimately concludes further tightening is unnecessary. We recognize, however, that we might be wrong about our view that rates should recede from here, and Pierfrancesco Mei estimates that the drag on GDP growth could be slightly over 0.5pp if rates remain higher for longer in “How Will Higher Rates Affect the US Economy?” n The Midterms. Alec Phillips updates our assessment of how polls are predicting this year’s Midterm elections in “US Election Monitor: October 8 Update.” Prediction markets moved further toward Democrats to take control of the Senate over the past week, lifted by polls showing them leading in Kansas…