October 26, 2026

The stock market is poised to start the final week of October on firmer footing. S&P 500 futures are up 0.31% at 7683.5, Nasdaq futures are up 0.60% and Dow futures are up 0.34%. Overseas markets set a constructive tone: the DAX is up 1.01%, the Euro Stoxx 50 0.68% and the FTSE 100 0.48%, while the Nikkei 225 slipped 0.80%. The primary assist this morning is a 1.92% retreat in crude oil to $101.29. That move provides a measure of relief on the inflation front heading into a week packed with mega-cap earnings, a Fed rate decision and a heavy slate of macro data.

Sector action reflects that crude-driven rotation. Energy is the clear laggard at -1.59%. Refiners MPC (-2.10%) and VLO (-1.67%) are leading the decline, alongside XOM (-1.37%), CVX (-1.27%) and COP (-1.59%). On the other side of the ledger, Technology (+0.52%) and Industrials (+0.52%) are out front. Chipmakers are carrying the tech trade, with NVDA +1.08%, AMD +1.03% and AVGO +0.96%, while CAT (+1.14%) and GE (+0.83%) support the cyclical bid. In Consumer Discretionary, TSLA is up 2.47% following a brokerage upgrade. Gold's 0.66% advance to $4034.20 has NEM up 1.91%. Defensive groups are lagging modestly, with Consumer Staples down 0.31% and Utilities flat.

The mega-cap complex remains a source of friction. AAPL (-1.30%), META (-0.76%) and NFLX (-0.68%) are trading lower, underscoring recent concerns that weakness in the largest index constituents has been dragging on the S&P 500. With a busy earnings calendar this week, dispersion among the heavyweights will likely dictate index direction more than broad sector themes.

On the macro front, the Chicago Fed National Activity Index came in at 0.07, beating the -0.10 consensus. The Dallas Fed Manufacturing Index (consensus 7 vs. prior 9.8) is due later today, along with 3-month and 6-month bill auctions and a 2-year note auction (prior 4.787%). The week's main event is Wednesday's FOMC decision. Polymarket prices 94% odds of a hold and just 6% odds of a 25 bp hike, with 96% odds of no cuts in 2026, so the market will parse the Fed's statement and press conference for any hawkish tilt. Thursday brings a heavy data dump: - Q3 advance GDP, forecast at 3.2% vs. 2.2% prior - PCE, forecast at 0.5% m/m and 3.6% y/y - Core PCE, forecast at 3.1% y/y - Initial jobless claims, forecast at 200K

Friday adds the Employment Cost Index and a speech from Fed's Musalem. Looking further out, the Nov. 3 midterm elections and the Nov. 6 jobs report (prior 29K) loom.

The options backdrop argues for caution beneath the calm headline futures indications. SPY at-the-money implied volatility sits at 15.9%, with an IV Rank of 78 (89th percentile), and the nearest-expiry implied move is ±0.9%. Dealer gamma has been negative for eight consecutive sessions, with total GEX of roughly -$16.6 billion per 1% move. That positioning tends to amplify moves in either direction. SPY is trading below its 770 zero-gamma level, with the put wall at 755 as support and the call wall at 800 as overhead resistance. The put/call volume ratio of 1.39 points to hedging demand, but the -5.2% 25-delta skew shows calls bid as well. That two-sided setup suggests investors are bracing for a larger-than-usual move around Wednesday's decision and Thursday's inflation data.