Oct. 2, in case you needed a reminder, offered investors a solid relief rally.
The Nasdaq Composite and Nasdaq-100 jumped to all-time highs and ended strongly as the technology sector surged. The Dow Jones industrials finished with a 250-point gain, and the Standard & Poor’s 500 Index rose 0.7% to 7,223.
Optical equipment giant Lumentum Holdings (LITE), up 15.3% last helped power those gains.
The G-7 industrial nations announced a plan to release 100 million barrels and oil and diesel fuel into global markets over the next four months. And there’s an expectation oil prices should go down this week and perhaps this fall.
Oil prices were modestly higher in trading late on Oct. 4. Stock index futures indicated a positive open for Oct. 5.
If nothing crazy happens, technology appears to have momentum on its side.
But the risks to markets remain, even if investors went into the weekend feeling fairly cheery. Mostly, the risks will be to energy markets, first, and bond markets, which have pushed global interest rates sharply in 2026.
The 10-year Treasury yield ended the week at 5.28%, up slightly from Oct 1’s close but lower than its 52-week high of 5.35% reached a day earlier. A 30-year mortgage would run you 7.57%, according to Mortgage News Daily, but that was down slightly from its Sept. 30 high of 7.6%.
Energy and interest rates are bound together by the conflict between the United States, Israel and Iran. And no one has much of a clue what may happen this coming week, let alone how it will end.
The concern is that, after maybe a week of evidence that tanker passage through the Strait of Hormuz was practically at pre-war levels, suddenly it wasn’t. Since Sept. 28, there have been at least seven Iranian strikes on vessels around the Strait, which links the Persian Gulf to the Indian ocean and beyond, The Wall Street Journal reported on Oct. 4.
Plus, the Defense Department is sending another aircraft carrier into the Middle East to go with two carriers already there. And it also adding an amphibious ship with 2,000 soldiers as well.
Complicating matters, on Sept. 4, Yemen’s government, which is backed by Saudi Arabia, declared war on Houthi rebels. This group is backed by Iran. U.S. military staff are providing intelligence and targeting planning assistance, the New York Times reported.
Here’s what else to watch.
Drone view of an oil tanker at sea. Getty Images
ISM services and Fed minutes top economic reports
These can move market but not like the Oct. 2 jobs report, which reported surprisingly light employment gains in September.
The Institute for Supply Management’s Services Managers Report, due Oct. 5, is expected to report an index reading of 55, down slightly from its August reading.That will suggest the domestic economy is stable.
The Federal Reserve will release the minutes from its Sept. 15-16 meeting, where its Federal Open Market Committee boosted its key interest rate slightly to try to force U.S. inflation lower. What investors and others want to know is how gung-ho the Fed may be to raise rather further.
There will be attention paid to the University of Michigan’s October survey on consumer sentiment, due on Oct. 9. So far this year, the survey has suggested consumers are not particularly bullish on the domestic economy. But non-bullishness has not translated into lower spending patterns.
More oil, gas and the economy
- Inflation frustration boils over as consumer confidence takes an unexpected turn ahead of the holidays
- September Payrolls Miss Every Estimate, Wage Growth Slowest Since 2021
- The costly, invisible crime happening time and time again
PepsiCo and Delta Air Lines offer biggest earnings reports
Frankly, this is not a big week for earnings report. The real flood will start on Oct. 13 when the nation’s biggest banks release their numbers.
Earnings from four consumer companies will dominate the week’s reports. The two most important: PepsiCo (PEP), due Oct. 8, and Delta Air Lines (DAL), due Oct. 9. Both companies are consumer-facing companies and will have much to say about consumer spending and travel demand.
A third report to consider: Constellation Brands (STZ), maker and distributor of beer, wine and spirits. Due Oct. 6, Constellation and its competitors have struggled in the last few years because many people have stopped or sharply reduced their consumption of alcoholic beverages.
Lastly, Levi Strauss (LEVI), due Oct. 7, will offer a look at how its business has fared under Trump administration tariffs. In July, the company boosted its full-sales and revenue guidance. The shares jumped 62% between March and the end of July but are down 23% since.
Related: Nvidia’s AI boom revives a Warren Buffett warning for investors
