Dow drops 1.2% as WTI tops $103 on Iran fears; 10-year hits 5% before Fed week
Monday, October 26, 2026 · as of Oct 26, 6:27 AM ET · covers the prior trading session
Friday's US session closed lower, led by a 1.23% Dow drop, as reports of a possible new strike on Iran sent WTI up 3.8% to $103.27 and pushed the 10-year Treasury yield to 5.00%. Asia was mixed overnight, while European indices and US index CFDs edge higher ahead of a week with Fed, ECB and BoJ decisions plus megacap tech earnings. Dairy product prices stayed soft, and diesel sits near $6.28 a gallon.
Key numbers
What mattered yesterday
- The Dow fell 1.23% to 52,215.16 on Friday, its worst day in two months, while the S&P 500 lost 0.52% and the Nasdaq slipped 0.21%. Tapeboard
- December WTI settled up 3.80% at $103.27 and Brent at $116.72 after reports of a possible new US–Israeli strike on Iran and Houthi attacks on Saudi Arabia. Cappnotes
- Treasury yields rose on oil-driven inflation worries: the 10-year closed at 5.00% (+4 bp) and the 2-year at 4.69% (+4 bp). U.S. Treasury
- University of Michigan sentiment (final Oct.) came in at 48.0 vs. 46.3 expected, with 1-year inflation expectations at 4.7%. Cappnotes
- Earnings reactions were mixed: Robert Half +21.7%, LKQ −22.5% after pulling guidance, American Express −3.7% despite raising guidance. BigGo Finance
Market snapshot
Why it mattered
Reported: Selling spread from tech into defensives while energy led; crude logged its highest close since spring on Iran-strike reports (BigGo). This morning, US index CFDs are steadier ahead of a week with the Fed, the ECB and the BoJ (Trading Economics).
Our read (commentary, not investment advice): The key link right now runs from oil above $100 to inflation expectations to a 5% 10-year. While it holds, tech rallies look fragile, and Wednesday's Fed guidance on a possible December hike matters more than the hold itself.
Today's calendar
- Mon: Chicago Fed National Activity Index (Sep) 8:30 ET; Dallas Fed Manufacturing (Oct) 10:30 ET; China's Fifth Plenum runs through Thu.
- Tue: Durable goods (Sep) 8:30 ET; Conference Board confidence and new home sales 10:00 ET.
- Wed: Fed decision 2:00 ET, press conference 2:30 ET; EIA crude stocks 10:30 ET.
- Thu: Q3 GDP (advance), Sep PCE/income/spending and jobless claims 8:30 ET; ECB decision 9:15 ET; BoJ decision ~11:00 pm ET.
- Earnings this week include Microsoft, Alphabet, Amazon, Intel, Visa, Coca-Cola, Boeing, Eli Lilly and Exxon Mobil (timing not confirmed).
Business lens
- Dairy (USDA NDPSR, week ending Oct 17, vs prior week): 40-lb blocks $1.3856/lb (−4.5¢), butter $1.3547 (−1.1¢), nonfat dry milk $1.9959 (+3.0¢), dry whey $0.7260 (+0.6¢). Barrels: unavailable. September FMMO all-market average: Class III $16.04, Class IV $18.94/cwt (USDA AMS). CME spot moves and Class III/IV futures for Friday: unavailable. Weekly direction (USDA survey): cheese and butter both lower.
- Feed: Friday corn, soybean, soymeal and wheat settles are unavailable. Indicative soybeans are ~1,242¢ (−1.2%) at ~06:25 ET (Trading Economics).
- Fuel: US on-highway diesel was $6.276/gal for the week of Oct 19, +9.7¢ w/w (EIA). A new reading is due today.
- Freight: unavailable.
- Rates: SOFR 3.90%, and the 2-year is at 4.69%.
Our read: Weak cheese and butter alongside firm NDM keep Class IV ahead of Class III, which favors powder-heavy utilization over cheese. Diesel above $6 and $100+ crude raise hauling and input costs just as component values are soft, so margins stay thin unless feed eases.