Weekly Market Recap & Calendar – Week of October 19, 2026

Wall Street had its worst week since June as a sharp sell-off in technology and AI stocks hit the Nasdaq and S&P 500, while defensive sectors helped the Dow end higher. Hotter inflation data and surging oil prices added to the pressure. This week brings UK and Canadian inflation, Germany's ZEW survey and the October flash PMIs, ahead of a heavy central bank week at the end of the month.

Last Week's Market Snapshot (October 12–16)

The Nasdaq snapped a four-week winning streak, and the S&P 500 erased the gains from the prior week, when it set an all-time high. By sector, consumer staples led with a 5.02% gain, while technology was by far the weakest, tumbling 7.70%.

What Drove Markets Last Week

Tech and AI sell-off. Worries about debt levels and whether companies can justify huge AI infrastructure spending pushed chip and AI stocks sharply lower. On Friday alone, Micron fell 5.6%, AMD 6%, Broadcom 4.5% and Intel 5.8%, while Meta lost 3.7%. Investors rotated into defensive stocks, which cushioned the Dow.

Middle East and oil. Reports that Iran is using new tactics to target vessels in the Strait of Hormuz, along with strikes on Saudi energy infrastructure and the ongoing Houthi conflict, drove oil sharply higher. President Trump kept signalling that the US does not plan to strike Iran before the November midterms, but reports of renewed talks with Israel about possible military action kept uncertainty high. In Russia-Ukraine, Ukrainian strikes on Russian refineries prompted Washington to temporarily ease restrictions on Russian diesel to support supply.

US CPI (Wednesday). September CPI rose 3.7% year-on-year, above the 3.6% forecast and up from 3.4%, with core CPI at 2.6%. Energy was the main driver, and gasoline alone accounted for more than half of the monthly increase. The data raised concerns about sticky inflation and a Fed that may keep rates higher for longer.

US PPI (Thursday). Producer prices for September rose 6.3% year-on-year, far above the 5.3% forecast and up from 5.6% in August. As a leading indicator for consumer inflation, the print raised fears that businesses will pass higher costs on to consumers.

Economic Calendar: Monday, October 19 (GMT)

Economic Calendar: Tuesday, October 20 (GMT)

*Japan's trade balance releases at 11:50 PM GMT on Tuesday, which is early morning on Wednesday, October 21 in Tokyo.

Economic Calendar: Wednesday, October 21 (GMT)

Economic Calendar: Friday, October 23 (GMT)

*Japan's inflation data releases at 11:30 PM GMT on Thursday, which is early morning on Friday, October 23 in Tokyo.

Looking Ahead: October 26–28 (GMT)

The same week also brings the RBNZ, Bank of Canada and FOMC decisions on October 28, followed by the ECB on October 29.

What to Watch This Week

Inflation in Canada and the UK (Monday and Wednesday). Canadian CPI is forecast to rise to 3.2% from 3.0%, and UK CPI to 3.4% from 3.1%. Hotter readings would reduce the room for rate cuts at the Bank of Canada and the Bank of England and would typically support the Canadian Dollar and the Pound. UK unemployment on Tuesday, forecast at 4.9% to 5.0%, adds to the labor picture.

Germany's ZEW (Tuesday). The forecast is for a sharp drop to 25.1 from 34.7, with consensus at 31.6. A fall of that size would show that analysts are turning more cautious on Europe's largest economy, which could weigh on the Euro.

US housing starts and permits (Tuesday). With mortgage rates near multi-year highs, these numbers will show whether construction is holding up.

Flash PMIs (Friday). Germany's manufacturing PMI is forecast at 53.2 against 53.9 previously, while the UK and US readings are expected to hold close to prior levels. The US services PMI is forecast at 58.0, unchanged, and a higher reading would highlight resilient activity and persistent inflation concerns, while a lower one could ease pressure on the Fed.

Japan (Wednesday and Friday). Japan's trade deficit is forecast to narrow sharply from ¥1.1 trillion, and inflation is expected to rise to 2.3% from 1.9%, both relevant for the Yen.

Earnings and oil. The earnings season continues, so tech results will show whether last week's AI sell-off was a one-off. Oil near $100 remains a key driver of inflation expectations.

Market Takeaway

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