Market News

Stock market sector rotation: Energy leads while communication services suffers a sharp decline

U.S. stock market leadership is becoming increasingly selective. Three trading sessions reveal important differences between sectors, and even between industries within the same sector.

U.S. stocks are showing a notable change in leadership. Between the October 20 and October 23, 2026 closes, the Energy Select Sector SPDR Fund (XLE) gained 2.00%, while the Communication Services Select Sector SPDR Fund (XLC) fell 4.25%. The SPDR S&P 500 ETF (SPY) declined 1.18% over the same period.

For stock investors and traders, the message is not simply that the market is falling. Some sectors are attracting buying interest while others are struggling, and…

• Baker Hughes US oil rig count rises 1 to 460. Total rigs unchanged at 603
• US expected to remove 50% tariffs on some Canadian products as soon as today - report
• UMich final October final consumer sentiment 48.0 vs 46.3 expected
• Canada August retail sales +1.2% vs +1.3% expected
• US S&P Global flash October services PMI 57.9 vs 58.0 expected

Markets:

• Gold down $24 to $3999
• WTI crude oil up $4.01 to $103.47
• S&P 500 down 0.5%
• US 10-year yields up 4.6 bps to 5.00%
• AUD leads, CHF lags

There are heavy cross-currents working their way through markets at the moment. The latest one is the oil market spiking into the weekend, including brent hitting the highest since May at $117. There are growing signs that Trump will escalate versus Iran in an attempt to…

The major U.S. stock indices closed lower on Friday, with the Dow industrial average leading the declines. The Nasdaq 100 came within a little more than one point of unchanged, but the performance underneath the surface was less encouraging.

Only six of the 30 Dow stocks advanced in the supplied breadth snapshot. Within the Nasdaq 100, declining stocks outnumbered advancing stocks by 67 to 33. Buyers were making a play in cybersecurity and selected software shares, but that buying did not extend across the market.

For the week, however, the picture was different. The Russell 2000 gained about 2%, comfortably outperforming the larger-cap indices. The Dow also held onto a modest weekly gain, while the S&P 500 and both Nasdaq indices finished…

The NZDUSD has moved higher on four of five trading days this week, giving buyers something to build on after a sharp decline from the August high. The recovery has included a failed break below the rising 100-hour moving average and two successful tests of that moving average today.

Those are encouraging developments for the buyers. They are starting to show up on dips and defend a technical level.

However, there is still work to do. The price remains below the 38.2% retracement of the August-to-October decline. Until that level is broken, the move higher remains a relatively modest correction within the broader move lower.

A 422-pip decline left buyers with a hill to climb

From the August 21 high near 0.5986 to the October 14 low near…

Trump at a rally says they may do "another operation" against Iran.

• We may do another little Epic Fury
• We'll take care of Cuba on our way back from Iran

The market is certainly betting that Trump is going to do something in the short term, which is why oil has been so strongly bid in the past two days.

Meanwhile, The IRGC Navy said in a statement Friday that two supertankers struck naval mines while attempting to cross what it called an unauthorized southern route through the Strait of Hormuz, causing explosions and fires. I'd take that with a grain of salt but we're clearly in a paradigm that can't last.

Of course, Trump said recently there would be no attacks before the midterms but I don't imagine his credibility is too high on that…

The Fed decision is Wednesday, October 28, but markets have mostly given up on a move: fed funds futures put the odds of a hold at roughly 90-92%. The market believes that a hike less than a week before the midterms would be politically awkward. So now the question isn’t really about a rate hike in the week ahead but December and that is now at 85% for a hike.

I will be watching macro data including Thursday's PCE report but I will also be looking for macro signals from companies reporting this week. Last week, we heard from airlines that continued to highlight strong travel demand and corporate spending in a good economic sign, but what abotut the rest of the economy? Housing is particularly interesting with interest rates high and a…

The biggest earnings week ahead comes at an important time for the US stock market. The Nasdaq Composite and Nasdaq 100 are both trading below their respective 100-day moving averages, putting the sellers more in control from a technical perspective. Next week’s calendar brings Microsoft, Alphabet and Amazon, along with a broad mix of semiconductor, industrial, consumer and energy companies. The question is straightforward: Can earnings and guidance give buyers a reason to step back in, or will the results open the door for another shove lower?

The technical backdrop: Buyers have work to do

The technology-heavy indices head into the week with their 100-day moving averages overhead and their 200-day moving averages looming below:

• Nasdaq…

Baker Hughes reports that the US oil rig count rose by 1 to 460 in the week ending October 23. Gas rigs fell by 1 to 132, offsetting the increase and leaving the total US rig count unchanged at 603.

The US breakdown, including year-ago comparisons:

• Oil rigs: 460 versus 459 last week and 420 a year ago. Up 40 year over year.

• Gas rigs: 132 versus 133 last week and 121 a year ago. Up 11 year over year.

• Miscellaneous rigs: Unchanged at 11 versus 9 a year ago.

• Total US rigs: Unchanged at 603 versus 550 a year ago. Up 53, or 9.6%, year over year.

In Canada, the rig count increased by 3 to 220, compared with 199 a year ago. That brought the combined North American count to 823, up 3 on the week and up 74 from 749 a year ago.

The weekly changes are…

Election season is doing what trade negotiators couldn’t.

The Wall Street Journal reports the US is preparing to lift 50% tariffs on some Canadian agricultural and forestry products, with a proclamation possibly coming as soon as today. The motivation is political: Maine Sen. Susan Collins has been lobbying for relief and is in a dead heat with Democrat Troy Jackson with less than two weeks to go until Election Day.

Unfortunately, there is no real sign of a political thaw here as Trump could also raise other tariffs. USD/CAD is dow n18 pips to 1.3990 today and unmoved on this report.

The details:

• Scope and timing could still change, according to the WSJ’s sources
• The cuts may be offset by higher tariffs on other Canadian goods
• The White House…

As London/European traders head home for the weekend, the major European stock indices are closing mixed for the day, but lower across the board for the week. Spain and Italy managed gains today. Germany, France and the UK finished lower.

The closing numbers and weekly changes show:

• German DAX: 25,152.30, down 0.86% today and 1.84% for the week
• France’s CAC 40: 7,782.83, down 0.36% today and 2.19% for the week
• UK FTSE 100: 10,690.37, down 0.32% today and 1.76% for the week
• Spain’s IBEX 35: 18,989.81, up 0.40% today, but down 1.74% for the week
• Italy’s FTSE MIB: 48,558.85, up 0.36% today, but down 2.60% for the week

Italy’s bounce today helped, but it still finished with the largest weekly decline of the five markets.

Market breadth also showed…

Trump is speaking on Iran and much of it is the same things he's been saying for months but the market is sniffing out some kind of weekend escalation so the comments are being closely followed:

• Do we want to finish it or let it wither is the question
• We could take all of the oil in Iran
• We could end Iran war very quickly

I don't think you use the word 'wither' if that's the option you're leaning towards.

There are some bids in stocks today but WTI crude remains up $2.82 to $102.27 and about 40 cents from the highs of the day.

Other comments:

• Close to a trade deal with Mexico
• Says Canada is working hard to make a deal with us
• Discussed opening up north sea drilling with UK
• On Starlink, says if it's not fixed for Ukraine, he will talk to Musk
• Says he…

The four major US stock indices are telling different stories today. The Dow industrial average is under the most pressure, the S&P 500 is modestly lower, and the Nasdaq Composite and Nasdaq 100 are trading higher.

Here is the snapshot:

• Dow industrial average: Down 473.64 points, or 0.90%, at 52,394.34.

• S&P 500: Down 10.18 points, or 0.13%, at 7,653.25.

• Nasdaq Composite: Up 57.33 points, or 0.22%, at 26,066.19.

• Nasdaq 100: Up 133.19 points, or 0.46%, at 29,091.88.

However, look underneath those headline numbers and the picture is less encouraging. Declining stocks outnumber advancing stocks across all four indices—even in the two Nasdaq indices that are trading higher.

Within the Dow, just five stocks are higher versus 25 lower. In the S&P 500,…