Weekly Market Review - 19-10-2026

2 days ago

5 min read

UK equities outperformed as US technology stocks suffered sharp losses. Meanwhile, civil unrest in France unsettled European markets, US inflation accelerated and Britain's electricity grid faced rising costs.

Market Recap.

Equity markets delivered contrasting performances this week, with UK shares moving higher while US markets recorded losses, particularly among technology stocks.

The FTSE 100 ETF led the way, rising 2.20% after gaining steadily throughout the second half of the week.

In the United States, the Dow Jones Industrial Average ETF edged down 0.23%, recovering some of its earlier losses before finishing slightly lower.

Broader US equities experienced a sharper decline, with the S&P 500 ETF falling 2.11%. Technology stocks saw the largest losses, as the Nasdaq 100 ETF dropped 4.73%, extending its decline significantly during the final two sessions.

News.

France has experienced some of its worst civil unrest in years, as protests over education, rising living costs and public spending escalated into widespread rioting over the weekend.

The demonstrations began with students protesting teacher shortages and deteriorating school conditions, before attracting workers and trade unions concerned about fuel prices, wages and proposed government spending cuts. Although most demonstrations were peaceful, violence spread across several cities, with shops looted, public buildings set alight and almost 2,400 people arrested.

The unrest has added to concerns about France's political stability and growing public debt. French shares fell and government borrowing costs rose on Monday, while the effects reached UK markets, with the FTSE 100 opening 0.40% lower and sterling strengthening against the euro. Prolonged instability could also affect UK businesses with significant French trade and investment exposure.

Inflation.

US inflation accelerated in September, with consumer prices rising at their fastest monthly pace since April as higher energy costs added pressure to household budgets.

The Consumer Price Index increased 3.70% year-on-year, up from 3.40% in August, according to the Bureau of Labor Statistics. Prices rose 0.60% over the month, compared with 0.40% in August.

Petrol prices were a major contributor, rising 9.10% during September and accounting for more than half of the monthly increase. Core inflation, which excludes food and energy, also increased to 2.60% annually, from 2.40% previously.

The figures suggest that price pressures extend beyond energy, complicating the Federal Reserve's decisions on future interest rates.

Central Banks.

Bank of England Governor Andrew Bailey has said that higher energy costs have so far had relatively limited effects on wider UK prices, although it remains too early to judge whether inflation pressures will become more persistent.

Speaking at an international financial meeting in Bangkok, Bailey indicated that evidence of businesses passing higher energy costs through to other prices remained subdued. However, sustained cost pressures could eventually affect company margins and pricing decisions.

The Bank of England held interest rates at 3.75% in September, with policymakers continuing to assess whether energy-driven inflation could spread into wages and services. The comments come ahead of the Bank's next interest-rate decision on 5th November.

Commodities.

Oil prices fell during Monday's trading after the US waived several sanctions targeting Russian energy trade, raising expectations of improved supplies. However, both benchmarks remained above the prices quoted in last week's review.

Compared with those figures, WTI crude rose 6.88% to $97.37 per barrel, while Brent increased 2.82% to $107.86. Continued disruption to Middle Eastern shipping routes and risks to energy infrastructure kept supply concerns elevated.

Precious metals moved lower overall, although gold was broadly unchanged, edging down 0.02% to $4,175.51 per troy ounce. Silver experienced a sharper decline, falling 4.76% to $57.66. Expectations surrounding US interest rates continued to influence precious metals.

ESG.

The cost of balancing Great Britain's electricity network has risen sharply, exposing the financial challenges of integrating growing renewable energy capacity into the grid.

The National Energy System Operator incurred £47.9 million in balancing costs on a single day, while September's total reached a record £505 million.

Transmission constraints mean wind farms are sometimes paid to reduce generation where electricity supplies exceed network capacity, while more expensive gas-fired power stations are brought online elsewhere to meet demand.

These costs ultimately feed through into electricity bills. With further renewable projects planned, the figures demonstrate the scale of investment needed in transmission networks, energy storage and other infrastructure to improve efficiency and reduce costs for consumers and businesses.

Geopolitics.

The European Union has introduced its largest single package of sanctions listings against Russia since the invasion of Ukraine, targeting 1,569 individuals and companies linked to the country's military-industrial complex.

The measures include 826 Russian businesses and 743 company executives, with a particular focus on supply chains supporting the production of military equipment, including missiles, drones and aircraft.

Further sanctions announced on 15th October targeted three individuals and nine businesses accused of circumventing existing restrictions, particularly those covering energy trade and financial transactions.

The measures are intended to restrict Russia's access to critical technology and financing, with implications for international trade, industrial supply chains and companies exposed to sanctions compliance risks.

Week Ahead.

United States

Housing activity and business surveys will be the main focus in the US this week. September's housing starts and building permits are scheduled for Tuesday 20th October, providing an update on construction activity and the impact of borrowing costs. Weekly Initial Jobless Claims follow on Thursday 22nd, before preliminary October Manufacturing and Services PMI figures and the University of Michigan's final consumer-sentiment survey on Friday 23rd. Investors will also monitor major corporate earnings as the Federal Reserve enters its pre-meeting quiet period ahead of its late-October policy decision.

United Kingdom A busy week for UK economic data begins on Tuesday 20th October with labour-market figures covering employment, unemployment and wage growth. September's Consumer Price Index and producer-price figures follow on Wednesday 21st, alongside public-sector borrowing data. These releases will be closely watched for signs of persistent inflation and their implications for Bank of England policy. Retail sales figures for September are scheduled for Friday 23rd, providing an update on consumer spending, while preliminary Manufacturing and Services PMI readings will offer a further assessment of business activity.

Eurozone

Government finances and business activity will be the main focus across the Eurozone. Eurostat's latest government deficit and debt figures are scheduled for Tuesday 20th October, covering revised annual figures for 2025 and second-quarter 2026 data. The releases will be particularly relevant given renewed concerns about French borrowing costs and fiscal stability. Preliminary October Manufacturing and Services PMI figures for France, Germany and the wider Eurozone follow on Friday 23rd, providing an early indication of business conditions and price pressures ahead of the European Central Bank's next policy meeting.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.