October was a month full of tricks and treats for investors, all depending on which door you knocked on.
Markets were mixed for the month as economic data remained largely mixed. Inflation picked up and consumer sentiment stayed subdued, both of which weighed on the outlook. However, falling interest rates helped offset some of that pressure. Worries surrounding artificial intelligence drove a sharp pullback in large-cap tech, but other areas of the market held up well and kept the broader picture in balance.
The CRSP US Small Cap Index led the way, gaining 2.06%, with the Dow Jones Industrial Average close behind at 1.76%. The S&P 500 slipped 0.87% while the tech-heavy Nasdaq 100 was the clear laggard, falling 6.63% as high-flying AI names slumped. Value outpaced growth as a style, and defensive sectors fared better than cyclical sectors as investors took a more cautious stance.
International markets also struggled. Developed international stocks fell 1.66%, and emerging markets declined 6.41%. The pullback in AI-related tech stocks, along with higher oil prices, weighed on countries such as China and South Korea, which are heavily tied to the technology supply chain.
Bonds were a bright spot, recovering from last month’s volatility. Aggregate US bonds rose 2.37% as the 10-year Treasury yield fell from 5.29% to 4.94%, supporting bond prices. Uncertainty in tech-related sectors pushed investors toward safe-haven asset classes, helping push yields lower. The Fed left rates unchanged at its October meeting, but markets are still pricing in one more rate hike at the December meeting.
October showed how quickly leadership can rotate. Areas that had been driving markets higher stumbled, while others stepped up to provide support. This is a good reminder of the value of diversification. Concentrating too heavily in one theme can amplify losses when sentiment shifts. A balanced portfolio aligned with your longer-term goals and risk tolerance can help you weather periods like this with more confidence.
Turns out the hottest ride on the lot is… a hybrid?
With gas prices running high, hybrids and passenger cars had a strong third quarter, and Asian automakers were the biggest winners over their US counterparts.
Part of the reason is selection. Toyota alone offers 18 hybrid models in the US, with Kia, Hyundai, and Honda offering seven, six, and five respectively. Major US automakers on the other hand offer just a handful of options total between Ford and General Motors.
That gap is showing up in market share. Asian automakers made more than half of the new cars Americans bought in Q3, according to Cox Automotive.
Ford and GM plan to roll out more hybrids, but new models can take years to bring to market. Until then, US companies will have to hope drivers stay loyal to their gas guzzlers, at least for a few more miles.
AI just turned in its homework, all 722 pages of it.
In October, OpenAI released 722 pages detailing solutions and progress on 372 previously unsolved math problems across fields like number theory, algebraic geometry, and topology.
The release included claimed progress on several of the Millennium Prize Problems, a set of famously difficult puzzles that each carry a $1 million reward.
According to the company, nearly every result came from a single prompt given to an AI agent, with the average problem taking just three hours.
However, in September OpenAI said it had solved the Navier-Stokes equation, another Millennium Problem, but experts criticized the proof for relying on a controversial loophole.
Before anyone hands out a gold star, mathematicians want AI to do what every other teacher demands… show its work.
Broad Market Returns
| Asset Class | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | -0.86% | 1.45% | 11.75% | 12.08% |
| NASDAQ (QQQ) | -6.66% | 0.47% | 12.78% | 10.28% |
| Large Cap Growth (VUG) | -5.60% | -0.06% | 4.95% | 2.74% |
| Large Cap Value (VTV) | 5.53% | 4.15% | 21.20% | 25.26% |
| Small Cap Growth (VBK) | -2.26% | -2.93% | 9.63% | 9.18% |
| Small Cap Value (VBR) | 5.37% | -0.05% | 16.64% | 20.21% |
| Developed International (VEA) | -1.66% | -1.43% | 12.21% | 16.90% |
| Emerging Markets (VWO) | -6.41% | -5.34% | 3.57% | 3.28% |
| REITs (VNQ) | 4.81% | -4.24% | 9.18% | 9.32% |
| Aggregate Bonds (BND) | 2.37% | 0.12% | -0.42% | -0.12% |
| Corporate Bonds (VCIT) | 2.21% | -0.67% | -1.31% | -0.49% |
| High Yield Bonds (JNK) | 0.83% | -1.17% | 0.54% | 1.97% |
| Long Term Treasuries (VGLT) | 5.20% | 0.77% | -2.51% | -4.15% |
| International Bonds (BNDX) | 1.36% | -0.05% | 0.17% | -0.53% |
Market Health Indicator
The Market Health Indicator (MHI) measures market health on a scale of 0 – 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.
Fun Facts
- Whether you’re outdoorsy or getting on someone’s nerves, November 17th is National Take a Hike Day.
- Cuvier’s beaked whales can hold their breath underwater for longer than any other mammal on earth, up to more than 3-and-a-half hours.
- Crickets hear with their knees, using a special membrane called a tympanum located on their front legs.
- In Italian grammar, words ending in “i” are plural, while words ending in “o” are singular. So a single strand spaghetti is technically a spaghetto.
– The Aspire Wealth Team
October 2026 Market Update Video
