The Stenger Report - 10/12/26
Equity indices generally advanced last week, with the S&P 500, Dow and Nasdaq gaining 1.2%, 0.9% and 0.6%, respectively, while the Russell 2000 declined 0.9%. The S&P 500 briefly reached another record high, though leadership rotated meaningfully: Utilities, Consumer Staples and Energy each gained 3.5%+, while Tech was the week’s weakest sector. The equal-weight S&P 500 outperformed, snapping a seven-week losing streak and providing an improvement in market breadth. AI-linked semiconductor shares came under pressure amid renewed questions around AI spending and monetization. Treasury yields stayed elevated despite easing from their intraweek highs, with the 10-year closing near 5.24% after briefly reaching 5.36%, its highest level since 2002. On the monetary policy side, markets are still pricing an 82% rate hold probability. The September CPI release and the start of 3Q earnings season, however, will be important near-term tests for both inflation and equity valuations.
Notable Mover last week: Sandisk Corp (NASDAQ: SNDK) moved out of the S&P Top 50 again last week (-8% week of 10/5 and ~32% off 3Q26 highs) and marks the stock’s second move out of the top 50 this year. Despite this, the semiconductor stock is still up over ~1,100% in the last year. When Sandisk reemerged as a public company in 1Q25, its market cap was ~$7B and it now sits at ~$216B. While its core business is the same, the revenue mix and margin stories have perfectly caught the AI / data center wave. The key question at this stage, though, is there still room to run? Investors chasing Sandisk in 3Q26 are feeling very different from any investors jumping on in 2025. The market is pricing the stock ~5.6x its one-year forward earnings, suggesting an earnings rerate in the near term. For owning Sandisk in this bull market, we think investors should first recheck their buy thesis and form an opinion on earnings persistence prior to buying more. Nick discusses “trend chasing” and other behavioral pitfalls in portfolio management on a recent episode of The Nick Stenger Show linked here: Ep. 215 – Dumb Money.
Total returns presented; Multi-year periods are annualized; Heatmap shows relative timeframe performance across all assets. Data from sources is deemed to be reliable but accuracy is not guaranteed. Past performance is no guarantee of future results. As of 10/9/26.
Nick Stenger
Chief Executive Officer
Financial Advisor
Jerry Goeden, CPA, CFA
Senior Vice President
Portfolio Manager
Financial Advisor in Chicago, IL
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