{
  "id": 11933523,
  "title": "Spiking bond yields, midterms, earnings to test US stocks’ typical fourth-quarter strength",
  "url": "https://urgent.news/2026/10/04/spiking-bond-yields-midterms-earnings-to-test-us-stocks-typical",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-04T13:00:32.000Z",
  "source": {
    "name": "Investing.com",
    "slug": "investing-com",
    "url": "https://www.investing.com/news/economy-news/spiking-bond-yields-midterms-earnings-to-test-us-stocks-typical-fourthquarter-strength-4930935"
  },
  "original_language": "en",
  "account": "The United States stock market faces multiple challenges heading into its typically strong fourth quarter, as investors grapple with rising bond yields, upcoming corporate earnings, and the November midterm elections. The benchmark S&P 500 is already up nearly 13% for 2026, but sits about 1% below its mid-August record high. Since 1945, the S&P 500 has historically gained around 4.2% on average in the fourth quarter, with the index hitting gains 85% of the time. However, this year, investors are on high alert for potential pullbacks if it appears Democrats could gain full control of Congress, as that could lead to policy changes impacting the market.\n\nA major headwind is the surge in bond yields, with the 10-year Treasury yield reaching 5.34%, its highest level in 24 years. This increase in yields, driven by expectations of strong economic growth, surging energy costs, and heightened competition for capital due to companies expanding in AI, could be impeding the market's advance. These higher yields not only create more investment competition for equities but also pressure stock valuations and translate into higher borrowing costs throughout the economy.\n\nCorporate earnings season and a pivotal Federal Reserve meeting are expected to add to the market's challenges in the coming weeks. Large companies like PepsiCo and Delta Air Lines have already reported third-quarter results, with the broader reporting season set to begin the following week. While profits have surpassed projections, they have also raised the bar for stellar performance that could test the market. AI spending is particularly important for this earnings season, as companies are revising capex revisions, which has helped lift profits for many firms. The US stock market's performance has been highly correlated to the AI theme, according to Nelson Yu, head of equities at AllianceBernstein.",
  "summary": null,
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}