Weekly Stock Market Check (2026/10/26–10/30)

Japanese stocks fell for the second consecutive week last week. The Nikkei Stock Average closed at 62,693.16 yen, down 2,631.13 yen or 4.03% from the previous weekend. The TOPIX also fell 2.46% to 3,965.81, as selling in semiconductor and AI-related stocks spread across the entire market. The Nikkei has fallen more than 11% from its October 6 high, and while there is room for a short-term rebound, a bottom has not yet been confirmed.

In the U.S. market, the Dow Jones Industrial Average rose 0.41% for the week, while the S&P 500 fell 0.47% and the NASDAQ Composite fell 0.71%. In addition to concerns over the profitability of AI investments, the rise of Brent crude oil to $116.72 and the U.S. 10-year Treasury yield ending near 4.99% acted as a drag on the market.

This week will see a concentration of events including the FOMC, U.S. GDP and PCE data, the Bank of Japan’s Monetary Policy Meeting, and major U.S. tech earnings. While there is room for an autonomous rebound in the first half of the week, price ranges are likely to expand sharply in the second half due to the combination of policy, inflation, and earnings results. The biggest focus is whether the Nikkei can defend the area around its 200-day moving average and recover to the 63,000 yen level.

🗽 U.S. Stocks Last Week

Closing prices on October 23 were $52,215.16 for the Dow, 7,623.68 for the S&P 500, and 25,955.34 for the NASDAQ Composite. For the week, the Dow rose 0.41%, while the S&P 500 fell 0.47% and the NASDAQ Composite fell 0.71%. The NASDAQ 100 also closed at 28,957.53, down 0.79% for the week.

The NASDAQ rebounded early in the week on buying back of AI-related stocks, but in the second half of the week, major tech earnings triggered a renewed awareness of the time and capital burden required before massive AI investments translate into profit growth. On the 23rd, higher oil prices added further pressure, and approximately three-quarters of S&P 500 constituents declined. The Dow fell $652.82 from the previous day, the S&P 500 fell 0.52%, and the NASDAQ Composite fell 0.21%.

However, the small-cap Russell 2000 rose 2.0% for the week. The entire U.S. stock market did not collapse in one direction; rather, there was a shift in funds from highly valued large-cap growth stocks to small-cap and some cyclical stocks. This week, I want to avoid being reassured by index gains alone and instead look separately at the breadth of advancing stocks and the reaction of major tech companies.

💴 U.S. Interest Rates and Economic Indicators

The U.S. 10-year Treasury yield ended at 4.988% on the 23rd, near the psychological threshold of 5%. Although it declined throughout the week, the rise in oil prices is pushing up inflation expectations, which is not a comfortable level for the stock market. If it clearly exceeds 5%, it will be a headwind for high-PER growth stocks, while if it falls below 4.9%, the valuation burden may ease.

The FOMC will be held from the 27th to the 28th, with the policy announcement scheduled for 3:00 AM on the 29th (Japan time) and the press conference at 3:30 AM. The central scenario in the market is for the policy interest rate to remain unchanged, but the key is the interest rate outlook from December onwards. If vigilance against inflation is strong, it will likely lead to higher interest rates and lower stock prices, while if a cautious stance is confirmed, it will likely lead to lower long-term interest rates and a buyback of growth stocks.

At 9:30 PM on the 29th (Japan time), the preliminary U.S. GDP for the July-September quarter and the personal income and personal consumption expenditures for September will be released simultaneously. If the PCE price index exceeds market expectations, concerns about interest rate hikes could reignite even after the FOMC. A combination of weak economic growth and high inflation is the most severe for stocks, while a combination of resilient economic growth and stable prices is ideal.

💱 Dollar-Yen

The dollar-yen ended in the upper 156 yen range in the overseas market on the 23rd. While a weaker yen supports the profitability of export companies, if it occurs simultaneously with higher oil prices, import costs will swell, acting as a headwind for domestic demand-oriented companies and households.

This week, with consecutive monetary policy decisions in Japan and the U.S., the direction is likely to change significantly. If the FOMC maintains a tightening stance and the BOJ shows a cautious stance, the yen is likely to weaken further. Conversely, if the Fed is cautious about additional rate hikes and the BOJ is strongly vigilant against upside risks to prices, the yen is likely to strengthen. For Japanese stocks, a gradual weakening of the yen toward the 157 yen range is a tailwind for export stocks, but if the yen strengthens rapidly toward breaking 155 yen, I want to be careful about selling in futures and high-priced stocks.

🔥 Crude Oil and Middle East Situation

Brent crude oil rose 3.1% on the 23rd to close at $116.72 per barrel. It rose 6.2% for the week, reaching its highest level since June 2022. WTI crude oil has also risen to the $103 level. With supply concerns in the Middle East in the background, crude oil remains an important factor that moves both stock prices and interest rates this week.

Higher oil prices are a tailwind for energy and resource stocks, but they push up costs for air transport, land transport, chemicals, retail, and other sectors. Furthermore, in the U.S., it strengthens vigilance against prolonged monetary tightening through higher prices. If Brent approaches $120, I want to be wary of three things: pressure on consumption, declining corporate profit margins, and rising long-term interest rates, rather than just looking at the rise in resource stocks. Conversely, if it falls back to the low $110 range, it will be a source of relief for the stock market.

🗾 Japanese Stocks Last Week

The Nikkei Stock Average fell from 65,324.29 yen on October 16 to 62,693.16 yen on the 23rd, down 2,631.13 yen or 4.03% for the week. The TOPIX fell 2.46% from 4,066.00 to 3,965.81, and the TSE Growth Market 250 Index also fell 3.15%. The Nikkei fell on 4 out of 5 trading days, down about 9.2% in total over the two weeks.

On the 19th, the start of the week, the index narrowed its losses after a sharp drop in the morning, but fell again on the 20th. Although it rebounded 0.85% on the 21st, it fell 1,713.40 yen on the 22nd following the decline in U.S. AI and semiconductor stocks, closing at the low for the day. On the 23rd, it fell to as low as 61,462.61 yen before recovering more than 1,200 yen, but the closing price was 214.68 yen lower than the previous day.

The Nikkei Stock Average saw a larger weekly decline than the TOPIX, largely due to the impact of high-priced semiconductor stocks like Advantest and Tokyo Electron. However, the TOPIX also fell below 4,000, with selling spreading to non-ferrous metals and banks. This is no longer a ‘Nikkei-only correction’ like the one seen two weeks ago, and it will be important this week to see if the TOPIX can recover the 4,000 level.

📈 Japanese Stock Futures

As of 5:53 AM on the 24th (JST), the Osaka night session Nikkei 225 futures were at 62,640 yen. This is approximately 53 yen lower than the cash closing price of 62,693.16 yen on the 23rd. The CME yen-denominated futures also closed at 62,650 yen on the 23rd, indicating that the opening on Monday will be largely flat.

Futures only indicate the direction for Monday morning; this week, the premises will change significantly due to central bank meetings and earnings reports. First, I want to confirm if the market can hold the low of 61,462.61 yen from the 23rd and the 200-day moving average of around 61,465 yen. If it clearly breaks below this at the close, the downside will open up toward the low 60,000 yen range. On the other hand, if it recovers 63,000 yen and manages to establish itself in the 64,000 yen range, a further autonomous rebound is likely.

🎯 This Week’s Japanese Stock Market Forecast

The Nikkei this week will see a clash between buying back after the sharp decline and caution regarding the FOMC, US inflation data, the BOJ meeting, and corporate earnings. The first half of the week is likely to see attempts at a rebound following the stabilization at the end of last week, but earnings for Alphabet and Microsoft are scheduled after the US market close on the 28th, followed by Amazon on the 29th. Japanese semiconductor stocks will move significantly depending on the explanations regarding AI investment amounts and profitability.

The latter half of the week will continue with the FOMC results, US GDP, PCE, and the BOJ meeting. If strong earnings and lower interest rates align, a strong recovery can be expected, centered on high-priced semiconductor stocks. Conversely, if concerns over AI investment burdens, higher-than-expected PCE, rising oil prices, and caution regarding BOJ tightening overlap, there is a possibility of breaking below the 200-day moving average. It is necessary to evaluate each piece of data one by one and not assume that a temporary rebound in the index marks the bottom.

• Weekly forecast range: 60,500 yen – 65,500 yen

• Central range: 61,500 yen – 64,000 yen

• Upside conditions: Strong earnings from major US tech companies, receding concerns over AI investment, US 10-year Treasury yield falling below 4.9%, oil prices falling back, and the Nikkei recovering 64,000 yen

• Downside conditions: Higher-than-expected PCE, US 10-year Treasury yield establishing itself above 5%, Brent crude approaching $120, accelerated yen appreciation, and the Nikkei breaking below the 200-day moving average

• Main point of focus: Whether the Nikkei can hold the 200-day moving average around 61,500 yen and whether the TOPIX can recover 4,000

The bullish scenario is one where major US tech earnings show growth commensurate with AI investment, US interest rates fall after the FOMC, and the BOJ does not signal rapid additional tightening. In this case, there is room to recover 64,000 yen and return to 65,500 yen. The neutral scenario is a range between 61,500 yen and 64,000 yen, with the market fluctuating based on each policy event. The bearish scenario is one where oil prices and interest rates rise again and major US tech earnings lead to disappointment, with caution warranted for a downside move to 60,500 yen.

To summarize the whole situation in one sentence: ‘This week, while attempting an autonomous rebound with the 200-day moving average as support, the concentration of the FOMC, US GDP/PCE, the BOJ meeting, and major tech earnings means that the latter half of the week is likely to see wider price swings in either direction.’

※ Figures are based on the latest closing prices and scheduled announcements confirmed as of 5:33 AM JST on October 26, 2026. Descriptions regarding future price movements are market scenarios based on confirmed facts and do not guarantee results. This article is a record of personal market observations and does not recommend the buying or selling of specific stocks or financial products.

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