S&P 500 hits record as hawkish Fed minutes lift yields; Hormuz ship attacks surge

Monday, October 12, 2026 | Review: October 5–October 11

US stocks edged higher in choppy trading near record levels last week. On October 6, the S&P 500 surpassed its August closing record and went on to gain 1.2% for the week. Minutes of the Fed's September meeting showed that most officials favored another hike before year-end, pushing the 10-year Treasury yield to its highest level since 2002. Bitcoin briefly tested the $80,000 area as spot ETFs suffered heavy outflows. In the Middle East, attacks on ships near the Strait of Hormuz reached their highest weekly total since the war began, while repeated Houthi attacks on Saudi airports helped lift Brent above $104 a barrel on October 8. Gold rebounded from a two-month low and gained about 1.3% for the week.

Last Week's Main Theme: Hawkish Minutes Push Treasury Yields to Highest Since 2002

The Fed released the minutes of its September meeting in the early hours of October 8, Beijing time. Most officials considered another rate hike before year-end likely to be appropriate. Treasury selling accelerated after the release, and the 10-year yield closed that day, October 7 in US Eastern time, at its highest level since 2002. St. Louis Fed President Alberto Musalem said on October 9 that the Fed needed to raise rates again.

Higher yields deepened market divergence. Equity indices remained resilient ahead of earnings season, but technology stocks and cryptoassets came under pressure. Spot Bitcoin ETFs recorded their largest daily outflow since late June. Meanwhile, tensions in the Middle East spread beyond shipping to civilian facilities inside Saudi Arabia, lifting the risk premium in oil prices.

Oil: Ship and Airport Attacks Lift the Risk Premium

Reuters, citing three maritime security sources, reported at least 12 attacks on oil tankers and vessels carrying liquefied natural gas or liquefied petroleum gas near the Strait of Hormuz during the week from September 28 to October 5, the highest weekly total since the war began. The International Maritime Organization (IMO) recorded nine incidents over the same period. Maritime sources said the IMO typically required more time to verify and formally register incidents. September crude exports from the Gulf region, excluding Iran, had recovered to more than 81% of pre-war levels, but frequent attacks threatened that recovery.

On October 7, Houthi attacks on King Khalid International Airport in Riyadh and Abha Airport killed three foreign nationals and injured 36 people. On October 8, increased Iranian attacks on tankers in the Strait of Hormuz, together with a hurricane threat to Gulf of Mexico output, lifted Brent by about 4% to $104.28 a barrel. WTI settled at $91.49. Oil prices eased slightly on October 9 after Trump said the United States would not take military action against Iran before the US elections.

A Houthi missile struck King Khalid International Airport again on October 10. Saudi Arabia's General Authority of Civil Aviation initially reported 12 deaths and 309 injuries; the death toll later rose to 13. The airport was attacked again on October 11. Repeated Houthi strikes on Saudi airports since October 7 had killed at least 20 people in total.

Gold: Rebounds from Two-Month Low, Gaining About 1.3% for the Week

Spot gold touched a two-month low on October 7 under pressure from rising Treasury yields, before rebounding 0.4% to $4,127.40 an ounce on October 8. Dip-buying then lifted gold 1.5% to $4,194.36 on October 9, a one-week high, bringing its weekly gain to about 1.3%.

Euro: French Budget Faces Resistance; ECB Expected to Hold

France's fiscal difficulties remained a major source of uncertainty for the euro. On October 9, the National Assembly's Finance Committee almost unanimously rejected the revenue section of the draft 2027 budget. The budget was due to move to debate in the full assembly this week. The French–German 10-year yield spread narrowed somewhat from the start of the week.

A Reuters poll published on October 8 showed that 70 of 73 economists expected the European Central Bank to leave rates unchanged on October 29, while 64 expected a 25-basis-point hike in December. The ECB's deposit rate stood at 2.50%, and euro area inflation was 3.8% in September.

Equities: S&P 500 Sets Record and Gains 1.2% for the Week

On October 5, the Nasdaq rose 1.05% to a record 27,477.31, while the S&P 500 gained 0.66% to 7,773.95. On October 6, the S&P 500 climbed 0.58% to 7,818.93, surpassing its August closing record. The Nasdaq added 0.45% to another record of 27,599.79, and the Dow rose 0.49% to 51,521.28.

US equities retreated after the minutes. On October 8, the Nasdaq fell 1.25% to 27,193.34 and the S&P 500 declined 0.47% to 7,765.36. The Technology Select Sector SPDR Fund (XLK) lost 1.8%, while the Energy Select Sector SPDR Fund (XLE) rose 3.0% alongside oil prices. Stocks rebounded on October 9, with the S&P 500 gaining 0.6% to 7,811.54, the Dow adding 0.8% to 51,654.95, and the Nasdaq rising 0.6% to 27,366.17. Compared with the October 2 close, the S&P 500 gained 1.2% for the week, the Dow rose 0.9%, and the Nasdaq advanced 0.6%.

Cryptocurrencies: Heavy ETF Outflows as Bitcoin Tests $80,000

Hawkish meeting minutes and rising Treasury yields pushed Bitcoin down about 2.6% to roughly $83,400 on October 7. It briefly fell as low as about $80,427 on October 8 before stabilizing.

Fund flows weakened markedly. US spot Bitcoin ETFs posted net outflows of about $90 million on October 5, followed by net inflows of roughly $119 million on October 6. Net outflows reached about $485 million on October 7, the largest daily outflow since June 25, followed by a further $244 million on October 8. Flows became mixed again on October 9.

This Week's Watchlist (Beijing Time)

Risk Warning: This article is for reference only and does not constitute investment advice. Financial markets involve risk, and past performance is not indicative of future results.