EB Daily Market Report - Brief Update - Friday, October 9, 2026

John Hopkins is traveling today, so I wanted to give you a brief update of today's action. Currently, all of our major indices are higher, led by the Dow Jones gain of 0.73%. The 10-year treasury yield is up 2 basis points to 5.25% amidst another weak University of Michigan October consumer sentiment index reading of 46.3, down from September's 48.1, and below consensus estimates. The current reading is also nearing the lowest consumer sentiment reading in history. Before you draw any conclusions as to what that might mean, take a look at this 50-year monthly chart of the S&P 500 and how bullish and bearish sentiment readings have impacted this benchmark index:

It might seem reasonable that a low consumer sentiment reading would be bad for U.S. stocks, yet history tells us a much different story. The better way to look at it is......if consumer sentiment is horrible, then there is only one way to go.....UP! And, in fact, the lowest consumer sentiment readings have generally occurred at or near significant market bottoms (green arrows). The absolute best consumer sentiment readings ever were recorded at the height of the dot com bubble (red arrow). Remember, sentiment readings are CONTRARIAN. When everyone is bearish, it's generally a very good thing for stocks.

Next week will kick off earnings season as JP Morgan (JPM, +0.43%) reports its quarterly results on Tuesday morning, before the opening bell. Banks have been under pressure with treasury yields rising, but JPM has been showing a lot of relative strength since printing a relative bottom back in February 2026. I suspect Jamie Dimon will tell us all that the sky is falling, because that's what he does. I'm much more interested to see how bank stocks react as Q3 earnings begin to roll in. While interest rates certainly matter with respect to bank valuations, so too do earnings. I expect earnings to be strong, but the question is what banks have to say about future guidance.

Later next week, we'll get the latest inflation data as both September CPI and PPI reports will be released. That will provide us clues regarding the Fed's next move, and will also have an impact on the beaten-up interest-rate-sensitive areas of the market.

Have a great weekend and I'll be back on Monday with our Weekly Market Report.

Happy trading!

Tom