What Happened in the Markets Last WeekWeek ended Friday, October 9th, 2026 | Prepared Monday, October 12th, 2026 The short versionU.S. stocks reached new record highs last week even as Treasury yields climbed, oil stayed elevated, and consumer sentiment weakened further. On Friday, the U.S. government unexpectedly issued a license temporarily authorizing certain transactions involving Russian diesel fuel. This week brings fresh inflation numbers and the start of bank earnings season. Stocks: records at the top, softness underneathAccording to the Associated Press, the S&P 500 rose 1.2% for the week and closed Friday at 7,811.54, after setting an all-time high on Tuesday. The Dow Jones Industrial Average gained 0.9% and the Nasdaq added 0.6%. Smaller companies did not join in: the Russell 2000 slipped 0.9% for the week. The ride was not smooth. On Thursday, technology stocks sold off while energy stocks jumped alongside a rise in oil prices, according to Tapeboard's daily market summary. Treasury yields: the highest in more than two decadesEarly in the week, the 10-year Treasury yield touched its highest level since 2002, according to Trading Economics. Yields then eased somewhat, with solid demand at recent Treasury auctions helping limit further increases, and the 10-year ended the week around 5.24%, according to the AP. Mortgage rates moved higher too: Freddie Mac reported that the average 30-year fixed rate rose to 7.40% on October 8, up from 7.28% a week earlier. Why this matters for everyday life: higher yields tend to make mortgages, car loans, and business borrowing more expensive. Minutes from the Federal Reserve's September meeting, released Wednesday, suggested policymakers were open to another rate increase in 2026. The Fed's next meeting is October 27 and 28. Geopolitics and energy: an unexpected turn on Russian dieselThe most surprising headline of the week came Friday. The U.S. Treasury's Office of Foreign Assets Control (OFAC) issued General License 135, which temporarily authorizes certain transactions involving Russian-origin diesel, including its sale, delivery, and import into the United States. According to OFAC, the authorization expires at 12:01 a.m. Eastern time on April 7, 2027, and it includes a restriction involving certain Russian government accounts at U.S. financial institutions. President Trump said Russia had agreed to release up to 4.8 million tonnes of diesel to world markets, according to Ship & Bunker. Why this is unusual: Russia imposed restrictions on its own diesel exports in July after Ukrainian drone strikes damaged its refineries, and extended the restrictions for fuel producers through the end of October. Restrictions on other exporters run longer, and some exceptions apply. In early October, President Putin said Russian diesel would not return to global markets while Western sanctions remained in place, as reported by S&P Global. In other words, the U.S. eased sanctions on a wartime adversary's fuel in a way that closely matches what Moscow had publicly asked for. Before these disruptions, Russia was traditionally the world's second-largest diesel exporter, according to S&P Global. There are important limits. The license only waives U.S. restrictions; a sanctions attorney quoted by Ship & Bunker noted that UK and EU sanctions remain fully in force. It is also not yet clear how quickly, or whether, Russian supply will actually reach buyers while Russia's own export ban is still in effect. The backdrop is a very tight diesel market. According to AAA, the national average diesel price set a record of $6.53 per gallon on September 22 and stood at about $6.28 as of October 11. On October 2, G7 members announced a release of up to 100 million barrels of diesel and crude oil over four months, according to the French presidency. Brent crude traded around $104 per barrel on Friday, according to the AP. Because diesel powers trucking, farming, shipping, and rail, its price can show up in the cost of nearly everything we buy. The consumer: worried, and carrying a lot of debtSentiment is near record lows. The University of Michigan's preliminary October consumer sentiment index fell to 46.3, below economists' expectations and the lowest reading since May's record low of 44.8, according to Trading Economics. Its gauge of current economic conditions dropped to an all-time low, with high prices and borrowing costs weighing on plans to buy big-ticket items. Consumers' expectations for inflation over the next year rose to 4.7%, according to the same survey as reported by Fortuneo. Debt is at or near record levels. American households are carrying more debt than at almost any point on record. According to the Federal Reserve Bank of New York's most recent quarterly report (second quarter of 2026, released in August): Total household debt stood at about $18.8 trillion. That was down $13 billion, or 0.1%, during the quarter, but near the record set in the first quarter and up $383 billion from a year earlier. Auto loan balances reached a record $1.71 trillion. Credit card balances rose to $1.26 trillion, just below the all-time record set at the end of 2025, according to ABC News. Student loan balances were $1.65 trillion.
Some perspective helps here: debt measured in dollars tends to rise over time as incomes, prices, and home values grow, so a record balance does not by itself mean households are under record financial strain. Late payments and defaults remain elevated. Student loan repayment remains a concern: 10.6% of student loan balances were 90 or more days past due in the second quarter, and approximately 2.6 million borrowers were transferred to the Education Department's Default Resolution Group in the first quarter of 2026, according to the New York Fed. The New York Fed also notes that the re-reporting of previously defaulted student loans has distorted the delinquency data. For credit cards, ABC News reported that the share of balances more than 90 days delinquent rose from 7.6% in the third quarter of 2022 to 12.8% by early 2026. The New York Fed's Liberty Street Economics blog notes that this rise partly reflects older charged-off balances staying on credit reports longer, and that new credit card delinquencies have been elevated but largely stable since 2024. Across all household debt, 4.7% was in some stage of delinquency, roughly in line with the prior quarter. A new data point from last week. The Federal Reserve's consumer credit report, released Wednesday, showed revolving credit (mostly credit cards) shrank at a 4.2% annual rate in August. The release alone does not show why: balances can change because of new borrowing, repayments, charge-offs, and other factors. What to watch this week (October 12 to 16)Monday: Columbus Day. The bond market is closed; stock markets are open. Tuesday onward: Several of the largest U.S. banks begin reporting third-quarter results. Their comments on credit card spending and loan losses may offer a real-time look at consumer health. Wednesday: The September Consumer Price Index (CPI), the most closely watched measure of inflation. Thursday: Producer prices, retail sales, weekly jobless claims, and the Philadelphia Fed manufacturing survey. Ongoing: Any details on actual Russian diesel shipments, developments in the Middle East, and energy prices.
Looking a bit further out, the final October consumer sentiment reading is due October 23, and the Fed meets October 27 and 28. The bigger pictureLast week showed a split between how markets are behaving and how many households are feeling. Stock indexes reached records, while consumers reported near-record pessimism and borrowing costs climbed. Periods like this can be a helpful reminder to revisit how your plan handles higher interest rates, energy-driven price swings, and the possibility of market volatility, without reacting to any single week's headlines. Weekly Market Recap Link About Stacey Important Disclosures
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