Inflation, Earnings and Breadth: The Market’s Next Test

Large caps recovered last week, but uneven participation, a heavy inflation calendar and major bank and semiconductor earnings leave us focused on whether the broader market can confirm the move.

// THIS WEEK

October 12–16 is less about one ES level and more about whether the broader market can confirm last week’s recovery. ES outperformed NQ, equal-weight large caps improved, and Friday breadth finished positive. But weekly declining issues still exceeded advancers and small caps lagged. Firm services prices and rising consumer inflation expectations keep the rates market central to the equity story.

We’re watching Wednesday’s CPI, Thursday’s PPI and retail sales, and a wave of bank and semiconductor earnings for the next read on inflation, growth and risk appetite. Monday’s holiday seasonality offers modest historical context, while Friday’s monthly options expiration can add noise around positioning.

What matters most to us is whether stocks, yields, breadth and volatility begin telling the same story. A sustained ES break above 7897.50 would carry more weight if NQ and participation confirm it; failed rallies alongside renewed new lows would keep us more defensive.

// MARKET MOVING CATALYSTS FOR THE WEEK

October 12–16: inflation, bank earnings and semiconductors lead. All times Eastern Daylight Time (UTC−4); ~ means approximate.

Monday, October 12

Split holiday — Columbus Day / Indigenous Peoples’ Day. NYSE open 9:30 a.m.–4:00 p.m.; SIFMA recommends the cash fixed-income markets close. ES trades normal Globex hours with the regular 5:00–6:00 p.m. maintenance break and normal settlement.
12:50 p.m. — Hammack keynote at NABE.
What we’re watching: With cash-bond trading curtailed, we’ll lean more heavily on equity breadth, and the futures curve, then listen for any policy signal from Hammack.

Tuesday, October 13

3:45 a.m. — Waller discussion on AI; a policy signal is not assured.
~7:30 / ~8:00 a.m. — Goldman Sachs / Citi results.
8:30 / 10:00 a.m. — JPM / Wells Fargo calls; these are call times, not release times.
10:00 a.m. — September existing-home sales.
Time unverified — 6-, 13- and 26-week bill auctions; tentative dates.
What we’re watching: Bank credit, net interest income, capital-markets activity, housing demand, and short-term funding.

Wednesday, October 14

Before U.S. open — ASML Q3 results.
5:40 a.m. — Bowman discussion on bank oversight.
~6:45 / ~7:30 a.m. — Bank of America / Morgan Stanley results.
8:30 a.m. — CPI + real earnings for September.
2:00 p.m. — Beige Book.
10:55 p.m. — Bowman in Bangkok; topic unannounced, creating overnight headline risk.
Time unverified — 17-week bill auction; tentative date.
What we’re watching: The CPI reaction in yields and valuations, ASML orders and guidance, bank credit/trading trends, and regional pricing.

Thursday, October 15

2:00 a.m. — TSMC Q3 conference (2:00 p.m. Taipei); conference time, not release time.
8:30 a.m. — PPI, September retail sales, initial claims, Empire State and Philly Fed surveys.
10:00 a.m. — August business inventories.
Noon — EIA petroleum report; holiday-delayed.
4:30 p.m. — Hammack fireside discussion.
11:30 p.m. — Warsh–Georgieva conversation during Friday’s overnight futures session.
Times unverified — 4- and 8-week bill auctions; tentative dates. No coupon auction is listed for October 12–16.
What we’re watching: Whether inflation, demand and labor signals reinforce one another or diverge, plus semiconductor guidance, inventories, oil, and late Fed commentary.

Friday, October 16

8:30 a.m. — September import/export prices.
9:15 a.m. — September industrial production + capacity utilization.
What we’re watching: Traded-goods inflation and factory output versus Thursday’s regional surveys, with monthly options expiration adding a positioning overlay.

// SEASONALITY WATCH

Monday, October 12 brings Columbus Day; stocks trade normally. Friday brings standard monthly options expiration.

Bullish tendency: Across 55 Columbus Days, 1971–2025, the S&P 500 cash price index rose 35 times (63.6%). Friday-close-to-Monday-close returns averaged +0.55%, with a +0.20% median. The second-Monday holiday sample excludes dividends.

Bearish counterweight: The +11.58% financial-crisis rebound in 2008 lifts that average substantially; excluding it lowers the mean to +0.35%. The worst holiday was 2014 at −1.65%, and the latest 10 split five up, five down.

The long-run bias is positive, but this one-day tendency is no forecast for the whole week. We’ll give the seasonal pattern weight only if price and breadth confirm it; failed rallies would matter more to us than the calendar.

// BREADTH

Friday’s issues and share volume had advancing majorities on both exchanges; weekly issues still favored decliners. Cash-equity breadth gives us context for ES and NQ, but it is not futures volume.

Daily Breadth — October 9, 2026

Weekly Breadth — Week Ending October 9, 2026

A/D = advancing/declining; A% = advancing/(advancing + declining), excluding unchanged. Daily and weekly counts measure separate periods; weekly counts are not sums of daily observations or unique weekly highs/lows.

What we take from it: Weekly participation improved from the week ending October 2: advancing issues rose from 36% to 48% on NYSE and from 37% to 43% on Nasdaq. Weekly new lows eased from 757 to 518 and from 986 to 860, respectively. Declining issues still led both exchanges despite advancing-volume majorities, so we see recovery from a weak base rather than broad weekly confirmation. The equal-weight S&P 500 gained about 1.5%, ahead of the headline index’s roughly 1%, while small caps slipped. That points to selective broadening inside large caps with smaller-company participation still lagging.

What we’re watching next: We want to see advancing issues and share volume lead together on both exchanges over repeated sessions, with fewer new lows and broader participation alongside index gains. If the indexes rise while issue breadth stays negative—or declining volume and new lows expand again—we’ll view the recovery as less convincing. Friday’s positive issue balance alone does not settle that test.

// TECHNICALS

Last week’s tape: December ES (ESZ6) gained 89.50 points (+1.15%) during October 5–9, closing at 7866.00 against October 2’s 7776.50. December NQ (NQZ6) added just 74.25 points (+0.24%), closing at 31123.25. ES outperformed NQ by 0.91 percentage points, while breadth improved unevenly. To us, that combination says the large-cap recovery is real but not yet fully confirmed by technology or the broader tape.

Equity structure: ES opened the week at 7781.50, traded from 7760.25 to 7897.50, and finished 77% up that range. NQ ranged from 30792.00 to 31616.50 and finished only 40% up its range. We’re treating that relative weakness in NQ as an important cross-check rather than assuming the indexes are sending the same signal.

Levels that carry forward: For ES, Friday’s 7870.50 high is the first upside check before 7897.50. The support zone at 7815.75–7817.00 joins Wednesday’s and Friday’s session lows; below it sit Thursday’s 7783.00 low and the 7760.25 weekly floor. NQ first has to reclaim Friday’s 31266.50 high; 31616.50 remains the larger breakout test. Friday’s 30953.00 low and the 30792.00 weekly low are the downside checks.

What we’re thinking for October 12–16: A daily Globex close above ES 7897.50, followed by a successful retest, would become much more meaningful to us if NQ reclaims 31266.50 and breadth broadens with it. An ES failure through 7815.75–7817.00 would weaken Friday’s recovery, particularly if NQ loses 30953.00. A quick recovery back above the failed level would invalidate that rejection read.

Same December contracts throughout; full Globex week, October 4 at 6 p.m. through October 9 at 5 p.m. ET. Closes and returns use final session trades; October 9 official settlements were ES 7859.75 and NQ 31108.75.

// THIS WEEK’S TACTICAL FOCUS

October 12–16: we want the recovery to prove itself. Friday’s breadth improved, but declining issues still led the separate weekly totals. Our base case is rotation until December ES (ESZ6) closes above 7897.50 and holds a retest, preferably with December NQ (NQZ6) reclaiming 31266.50 and participation broadening. “Close” means the final Globex session trade, not settlement. Failed ES reclaims of 7815.75–7817.00—especially with NQ below 30953.00—would keep us defensive; reclaiming broken support would cancel that read.

Monday, October 12

Split holiday: equities and ES trade normally while SIFMA recommends a fixed-income close. We’ll lean more heavily on cash breadth because the bond market will be less informative. If support holds with advancing issues and volume leading, we’ll give the recovery more respect. Failed bounces would keep us cautious. Hammack speaks at 12:50 p.m. ET.

Tuesday, October 13

Bank earnings: we want to see financial-sector strength broaden beyond the first reaction. ES retests holding above 7870.50 would keep the weekly-high test in play; rejection accompanied by NQ weakness would look more rotational to us. We’re not interested in chasing strength into Wednesday’s CPI.

Wednesday, October 14

CPI, 8:30 a.m. ET: we plan to let the first reaction settle. ASML adds a separate NQ test. We’ll trust an upside break more if it survives a retest with improving participation; failed support reclaims would keep us defensive. Conflicting breadth or a full reversal would be a reason for us to back off. We’ll reassess again after the 2:00 p.m. Beige Book.

Thursday, October 15

The 8:30 a.m. ET batch: PPI, retail sales, claims and regional surveys test Wednesday’s direction. If the data reaction broadens across equities while yields stay contained, we’ll view that as constructive. If yields rise, technology weakens and breadth rolls over, we’ll treat that as a more important warning. We’ll reassess again before Warsh’s 11:30 p.m. ET conversation in Friday’s overnight session.

Friday, October 16

Expiry: import/export prices at 8:30 a.m. and industrial production at 9:15 a.m. ET precede the open. We’ll give sustained resistance reclaims more weight if breadth confirms them; failed rallies would keep us defensive until reclaimed. Monthly expiration adds positioning noise but no directional signal by itself.

Execution: We won’t chase scheduled releases, and we’ll size around volatility rather than conviction. When price and participation disagree, we’re more comfortable doing less. The week’s tell: ES above 7897.50 on a Globex close, followed by a retest hold with broader participation.