Week In Review: Wall Street Skipped the Sushi and Went Back for Casserole

Last week the economy broke down on the shoulder, and the Fed put the radar gun away (catch up here). This week Wall Street threw a potluck. On one end of the table sat the fancy dish everybody had been raving about all year: AI chip stocks, glowing, expensive, artfully arranged. At the other end sat Grandma's casserole: power companies, soda, soup, oil, and health care. By Friday, the casserole dish was scraped clean, the sushi was under plastic wrap, and the S&P 500 had set a record anyway. Then a rocket-shaped food truck landed in the parking lot.

Friday Oct 2 close to Friday Oct 9 close

Nine sectors up, two down. The two in the red were tech and industrials, which is strange for a record week. The equal-weight S&P 500 fund (RSP), which gives every company the same vote instead of letting the giants dominate, gained 1.58% and beat the regular S&P 500 fund's 1.16%.

The $1,000 test: Did you have $1,000 in the S&P 500 last Friday? You have about $1,012 now. Had it in the utilities fund? About $1,040. Had it in Intel? About $877. This was the week the electric company was the exciting stock and the chip company was the cautionary tale.

On Tuesday the S&P 500 closed at 7,818.93, its first close ever above 7,800, and touched 7,844.52 during the day. For almost two months, 7,800 had been the ceiling. Tuesday it became the floor. We covered the record live on Wednesday.

Here's what made it weird. The usual suspects didn't set the record. The best sector of the week was utilities, up 3.97%. Utilities are the power and water companies, the stocks your grandfather bought so he could stop thinking about stocks. Consumer staples (soda, soup, toothpaste) rose 3.60%. Energy rose 3.60%. Health care added 2.79%. Meanwhile, tech fell 0.52%, the worst of all 11 sectors; in a week, the index set a record. That's like the team winning the championship while the star sat on the bench eating sunflower seeds.

The power companies had a real reason to party. Constellation Energy jumped 12.25% on Tuesday and finished the week up 15.8% after signing a 20-year deal to sell Google 890 megawatts of new nuclear power, squeezed out of upgrades to 11 reactors it already runs. Bigger engine, same car. AI data centers eat power like teenagers eat groceries, and every power plant with a pulse suddenly looks like a growth stock. Slow cooker, meet extension cord.

Not every boring dish got eaten. Caterpillar fell 5.75% on Wednesday, and Deere lost 9.6% on the week, after the FTC and the Agriculture Department opened an inquiry into how farm equipment gets sold and repaired, and borrowing costs kept climbing. An inquiry is not a lawsuit. It's the regulator knocking and asking if it can look around. Nobody enjoys that visit. A bulldozer financed at 5% is a business plan. Financed at 7%, it's a very expensive lawn ornament. Industrials were the only other red sector.

And the little guys? The Russell 2000 fell 0.92%, the only major index down on the week. Small companies borrow at bank rates, not bond-market rates, so they feel every rate bump in their teeth.

On Thursday, the Financial Times reported that OpenAI told investors its annualized sales were about $50 billion at the end of September. Earlier reports had put the number near $70 billion. "Annualized" means taking one month of sales and multiplying by 12, which is how a startup makes a great month look like a great year. Per the FT, most of the gap is bookkeeping: Anthropic counts sales that run through cloud partners like Amazon and Google, and OpenAI doesn't. Same lemonade stand, different way of counting cups. Nobody waited for the footnote. We walked through it on Friday.

Why would a footnote at one company hit a whole industry? Because the AI trade runs on one assumption: somebody at the end of the pipe pays for all these chips. OpenAI is one of the biggest somebodies. When its tab looks smaller, everybody selling it the shovels gets nervous. Bloomberg later reported that OpenAI expects to reach $70 billion or more by year-end, but by then the plates were already back in the kitchen.

The damage for the week: the chip fund we track (SMH) fell 4.32%. Micron lost 4.27%, AMD 4.07%, and Nvidia 2.00%, which is extra rude because Nvidia set record closes on Monday and Tuesday. Intel was the week's dud at -12.26%. Its slide started over the weekend, after reports that Taiwan's TSMC might join Elon Musk's giant "Terafab" chip-factory project in Texas. Musk's reply on X: "Just discussions, but something may come of it." Terafab is Intel's most visible customer outside the company, and the stock had more than tripled this year before the week started. Musk later insisted his companies will build and run the plant themselves, which helped for about a day. When you're priced for perfection, "something may come of it" sounds a lot like "we're seeing other people."

The companies that rent out the computers did fine: Amazon +4.34%, Microsoft +3.39%, Alphabet +2.38%. The landlords are fine. The furniture sellers got nervous.

The 10-year Treasury yield is what the US government pays to borrow for ten years. It quietly sets your mortgage rate, your car loan rate, and how much a company pays to borrow money. On Monday, it closed at 5.31%, its highest close since 2002, back when your phone flipped open and your music came on a disc. We flagged it in Tuesday's daily. The 30-year Treasury closed at 5.67% on Wednesday, the highest since at least mid-2002.

Then the government held three big debt sales (auctions), and buyers showed up. The 10-year eased to 5.24% by Friday, down 4 hundredths of a point on the week. Those hundredths have a name, basis points, and four of them is the bond market loosening its tie one notch, not taking it off.

The Fed made sure nobody got too comfortable. On Wednesday, it released the minutes from its September meeting, when it raised rates for the first time since 2023. The key line: "most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end." They also said inflation risk was "skewed to the upside," which is Fed for "we checked under the bed and the monster is still there." Then on Thursday, Fed Governor Christopher Waller, who votes at every meeting, said: "I anticipate additional hikes to support a timelier return of inflation to our 2 percent goal." He added that hikes "do not need to come at consecutive meetings." In plain English: maybe not this month. Definitely eventually. We unpacked the minutes on Thursday.

The betting site Polymarket agrees. It puts an October 28 hike at 15.5% and a December hike at 74.5%. Merry tightening.

Regular people are already feeling it. On Friday, the University of Michigan said consumer sentiment fell to 46.3, below the expected 47.6, with the current-conditions reading at 44.7, the lowest on record. People expect prices to rise 4.7% over the next year, up from 4.6%.

Brent crude, the global oil price, spent the week above $100 a barrel. On Thursday it jumped 4.1% to $104.28 after reports of more Iranian attacks on tankers and ship traffic through the Strait of Hormuz falling to its lowest since late July. Then President Trump posted that the US is having "productive discussions" with Iran and won't attack before the November midterms, and oil came off the boil. It eased Friday but stayed above $100. Nothing has been signed. "Productive discussions" is a status update, not a deal. The energy fund (XLE) rose 3.6% this week because every rally in your gas bill is a rally for whoever sold you the gas.

The bill landed at the airport. Delta Air Lines reported Friday morning, earning $1.72 a share (the profit split per share), below what Wall Street expected. Its third-quarter fuel bill was $4.1 billion, up 62% from a year ago. It cut its full-year profit forecast to $5.10 to $5.60 a share, from $6.50 to $7.50, and expects about $6 billion in extra fuel costs this year. CEO Ed Bastian said demand remains strong and that fares have risen about 20% this year. Which, if you've booked a flight lately, you already knew. Delta's stock dipped during the day and finished Friday basically flat, down 2.28% for the week.

On Thursday after the market closed, SpaceX (now a public company) said it's buying a nationwide set of wireless airwaves from Grain Management: up to 14 megahertz of spectrum in the 800 MHz band. Spectrum is the invisible real estate your phone signal travels on, and the 800 MHz kind is good at getting through walls. SpaceX says it will help Starlink work inside buildings and act like a mobile carrier. The price wasn't disclosed; the Wall Street Journal put it at about $8 billion in cash. The deal still needs the FCC's sign-off.

Friday, the three big phone companies found out what it feels like to be the casserole when a food truck shows up. Verizon fell 8.75%, its worst day since July 2002. AT&T fell 9.81%. T-Mobile fell 13.27%. That's the dud of the week, runner-up division. The whole communications sector somehow still finished the week up 0.05% because it also holds Google and Meta, like your phone bill getting canceled out by your streaming subscriptions.

The $1,000 test: had $1,000 in T-Mobile Thursday afternoon? You had about $867 by Friday's close. One announcement. One day. Nobody even turned off a cell tower.

To be fair, buying airwaves isn't building a network. SpaceX still needs approval and has to prove it works inside your kitchen. But Wall Street doesn't wait for the food truck to start serving. It watches the line form.

Odds pulled from Polymarket's public data Friday evening. Five of the biggest live economy bets, by money wagered.

1. How many Fed rate cuts in 2026? About $54.0 million wagered. Zero cuts: 95.6%. The rate cut is the ex everyone still talks about. It's not coming back this year.

2. Fed decision in October? About $31.5 million. No change: 83.5%. Hike: 15.5%.

3. Strait of Hormuz traffic back to normal by Dec 31? About $14.5 million. Yes: 17.5%. "Productive discussions" bought oil a day. It didn't buy the bettors.

4. Largest company at the end of December? About $8.0 million. Nvidia: 83.5%, Apple: 15%. The sushi is still the most expensive thing on the table.

5. Fed decision in December? About $3.0 million. 25-basis-point hike: 74.5%. That's a quarter of a percentage point, wrapped and under the tree.

GLD rose 1.17% this week to $384.58. It's up 5.2% from a year ago, down from about 7% a week earlier, because gold had a big run last October and the comparison is getting tougher.

Gold spent the week like a guest who can't decide whether to stay. Down 1.67% Wednesday when yields jumped, up on Thursday and Friday when oil spiked, and the bond market calmed down. Gold pays no interest, so when Treasury bonds pay 5.3%, holding a shiny rock costs you real money in lost earnings. Grandma's coins still beat her savings account this year. Just not by as much as she'll claim at Thanksgiving.

Freddie Mac's average 30-year mortgage rate rose to 7.40% this week, from 7.28% last week. A year ago, it was 6.30%. Last week's 7.28% was already the highest since November 2023, so this one clears that too.

What that means in money you can feel: on a $400,000 loan, the monthly principal-and-interest payment at 7.40% is about $2,770. That's about $33 more a month than last week and about $294 more than a year ago. That's a car payment.

The Mortgage Bankers Association's weekly survey said mortgage applications fell 4.2%. House hunters aren't shopping. They're window-shopping from the car with the engine running.

The week as a potluck: the appetizer was a record S&P 500 on Tuesday, served on a paper plate by the power company. The main course was supposed to be the AI sushi tower, but somebody flipped over the price card on Thursday, read "$50 billion, not $70 billion," and the whole room backed away slowly. The bond market showed up with a 2002 vintage at 5.31% and spilled it on everyone's mortgage. Delta brought pretzels and a $6 billion fuel bill. And just as everyone was cleaning up, a rocket-shaped food truck landed in the parking lot, and the phone companies dropped their trays. The check: 7.40% on a 30-year loan, with a sticky note from the Fed that says "more by Christmas."

This was the week Wall Street set a record and quietly changed its order. For most of the year the menu was simple: buy the AI chips, buy the cloud giants, don't think too hard. This week the money walked to the other end of the table. Power companies, soup, soda, oil and medicine got eaten. The chips got sent back. The S&P 500 still hit a record, because the market is big enough to set a record on casserole.

The one question that decides next week: what does Wednesday's September consumer price index (CPI, the government's main inflation report) say? Forecasters expect yearly inflation around 3.6% to 3.7%, up from 3.4%, mostly from gasoline. If the core number (inflation without food and energy) runs hot too, the Fed's "not necessarily October" gets a lot shorter. If it's tame, the casserole crowd gets to keep the record warm.

The fancy dish got sent back. The casserole won. And the check is still on the table.

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Disclaimer: This newsletter is for informational, educational, and mildly therapeutic purposes only. It is not investment advice, a recommendation to buy or sell anything, or a recipe. We are not your financial advisor, and nothing here creates a binding agreement with the market gods, the Federal Reserve, or whoever brought the sushi. Past performance does not guarantee future results, any more than last year's potluck guarantees anyone will eat your dish this year. Please consult a licensed professional before making financial decisions, and bring a covered dish.