Market Summary - October 5, 2026

Key Highlights:

• US bond yields reached their highest levels since 2002, with ten-year bonds at approximately 5.34%.
• Despite high yields, Wall Street indices, particularly the Nasdaq, continued to rise, with the Nasdaq hitting a new all-time high.
• Geopolitical tensions, especially in the Middle East and Brazil's election results, influenced market sentiment.
• Macroeconomic data showed a slight decline in the US ISM services index, but employment in the sector remained stable.

Market Overview

Market volatility was evident as US bond yields surged, yet investors showed resilience by buying technology stocks, which are perceived as less sensitive to interest rate changes. This led to a calm atmosphere on Wall Street, with the Nasdaq index achieving a record high.

Geopolitical Developments

In Brazil, right-wing candidate Flavio Bolsonaro advanced to the second round of elections, surprising many and becoming a market favorite. Meanwhile, ongoing tensions in the Middle East, particularly related to the Israeli-US conflict and Houthi attacks on Saudi facilities, continued to elevate risk premiums in commodity prices. In Europe, concerns about France's fiscal health ahead of the 2027 elections added to investor anxiety.

Macroeconomic Data

The ISM index for US services fell to 54.9 in September, slightly below expectations but still indicating expansion. A notable increase in the prices paid sub-index to 74 points raised concerns about persistent inflation into 2027. Following weaker labor market data, the likelihood of a Federal Reserve rate hike in October diminished, shifting focus to the upcoming minutes from the September meeting.

Indices Performance

The Nasdaq's record high was complemented by a 0.6% gain in the S&P 500, while the Dow Jones remained stable. In Europe, the STOXX 600 saw slight gains, but the Paris index fell by 1%, reflecting concerns over France's financial situation. The Japanese Nikkei rose by 2.4%, and the Polish W20 index gained over 1.4%.

Stock Highlights

Technology stocks led the rally, with significant gains in companies like Nvidia, Meta, Microsoft, and Tesla. PTC surged by 34% following its acquisition by Schneider Electric, while Vaxcyte rose by 30%. Brazilian banks Itau Unibanco and Banco Bradesco also saw sharp increases, buoyed by the election results.

Currency Movements

The euro fell to a 17-month low against the dollar, influenced by concerns over French debt. The dollar strengthened overall, reaching its highest level since April 2025, while the Japanese yen remained weak despite government assurances regarding debt management.

Commodity Prices

Oil prices declined after the G7 announced a release of 100 million barrels from reserves, with WTI prices dropping by about 1%. Gold prices stabilized around $4,137 per ounce, while silver saw a rise of over 1%.

Cryptocurrency Market

In the cryptocurrency space, Bitcoin experienced a slight decline of 0.6%, reflecting cautious sentiment amid a strong dollar and high bond yields.