The S&P 500 gained 1.1% this week and closed within half a percent of its high. Underneath, tech lagged, energy and defensives led, phone carriers had one of their worst days in decades, and the Fed signaled more hikes.
Top Stories
1. SpaceX buys spectrum, and telecom stocks get crushed. On Friday, SpaceX agreed to buy 800 MHz low-band spectrum from Grain Management. That gives Starlink Mobile a path to a ground network that reaches inside buildings. The three big carriers fell hard:
T-Mobile: -13.3%, its worst day since 2013
AT&T: -9.8%
Verizon: -8.7%, its worst day since 2002
Tower owner American Tower rose 9.3%. SpaceX gained 8.7% on the week.
2. An OpenAI revenue scare hit chip stocks Thursday. Reports put OpenAI’s annualized revenue near $50 billion, below the roughly $68 billion figure circulating earlier. The Nasdaq fell 1.25% that day. Friday’s bounce didn’t erase the damage. For the week, Micron fell 7.1%, CoreWeave fell 9.8%, and the semiconductor ETF (SMH) fell 4.6%.
3. Fed minutes keep another hike on the table. The Fed raised rates to 3.75% to 4.00% in September. Wednesday’s minutes from that meeting showed most officials expect another increase by year end. Futures price about 84% odds of a December hike.
4. Oil and Iran stay in focus. Tanker attacks in the Strait of Hormuz hit a wartime high, which helped energy lead all sectors at +5.2%. On Friday, with diesel near record prices before the midterms, Trump announced a deal with Putin for Russian diesel supply.
5. The White House escalates its fight with Fed Governor Lisa Cook. Trump formed a committee to review mortgage fraud allegations against Cook, which she denies, and set a hearing for Nov. 5. That keeps Fed independence in the headlines ahead of the Oct. 27 to 28 meeting.
Key Themes for Investors
Moats can disappear fast. Telecom has been treated as a safe income trade. One announcement knocked 9% to 13% off the carriers. If a company’s protection is spectrum or infrastructure, ask who could buy their way in.
The market is getting choosy about AI. Tech fell 1.2% and chips fell 4.6%, but Microsoft (+3.0%), Amazon (+4.3%) and Alphabet (+3.0%) gained. The losses hit the companies most dependent on OpenAI’s spending, like Oracle, CoreWeave and memory chip makers.
High rates are the backdrop. The 10-year Treasury yield sits at 5.24%, and 30-year mortgages are at 7.40%. With more Fed hikes likely, housing and small caps (Russell 2000 -0.9%) are still fighting uphill.
Consumers are splitting. Michigan sentiment fell to 46.3. A Fed survey showed nearly 20% of families are behind on loan payments, the most since 2010. Even so, consumer discretionary stocks rose 2.7%. Earnings will show who is still spending.
Bottom Line
The index looked calm, but leadership rotated hard underneath. Favor businesses whose earnings don’t depend on one customer, one regulator or cheap money.
Market Data (weekly)
S&P 500: +1.14% (7,811.09)
Nasdaq: +0.64% (27,364.32)
Dow: +0.93% (51,654.95)
Russell 2000: -0.91% (2,806.98)
VIX: 14.79 (from 15.31)
10-Year Treasury: 5.24% (from 5.28%)
2-Year Treasury: 4.80% (from 4.83%)
WTI crude: -2.2% | Brent crude: +1.4%
Sector Performance
Energy: +5.22% (best)
Utilities: +3.79%
Consumer Staples: +3.68%
Consumer Discretionary: +2.69%
Health Care: +2.56%
Financials: +2.22%
Real Estate: +1.59%
Materials: +1.23%
Communication Services: +0.05%
Industrials: -0.56%
Technology: -1.18% (worst)
Key Economic Data
ISM Services PMI: 54.9 vs. 55.0 expected. Prices paid hit 74.0.
NY Fed inflation expectations: 3.9% vs. 3.7% expected.
Jobless claims: 197K vs. 200K expected.
10-year auction: 5.30%, up from 4.83% last time. 30-year auction: 5.62%.
Michigan sentiment: 46.3 vs. 47.6 expected. Year-ahead inflation expectations: 4.7%.
Earnings:
PepsiCo beat on EPS ($2.34 vs. $2.29), but the stock was flat for the week.
Delta missed slightly ($1.72 vs. $1.77) and fell 4.2%.
Constellation Brands beat ($3.74 vs. $3.62) and rose 7.9%.
What to Watch Next Week
Mon: Columbus Day. The bond market is closed; stocks trade normally.
Tue: Banks kick off earnings season: JPMorgan, Wells Fargo, Citigroup, Goldman Sachs. UnitedHealth and J&J also report.
Wed: September CPI, expected at 3.6% year over year, up from 3.4%. A hot number raises December hike odds. Bank of America, Morgan Stanley and ASML report.
Thu: Retail sales (expected +0.2%), PPI and TSMC earnings. After this week’s chip selloff, TSMC’s comments on AI demand matter.
Later: FOMC meeting Oct. 27 to 28, midterms Nov. 3, Cook hearing Nov. 5.
This week showed how fast the market reprices a business when its moat or its biggest customer comes into question. Telecom investors lost 9% to 13% in a single day, and the AI names that depended on OpenAI got hit hardest.
Those are the risks paid subscribers see me dig into every Monday. Each deep dive runs one company through my six-pillar scoring framework, from moat strength to management quality to entry price, and ends with a clear verdict. If you haven’t yet, upgrade before the next surprise hits a stock you own.