How to Check Your Stocks When Money Costs More

Profits are growing and borrowing got more expensive. That tug-of-war picked the winners and losers from October 5 to 9, 2026, and it tells you what to check in the stocks you own.

By David Berkowitz · Berk on Value · October 11, 2026

Companies are earning more money. Money also costs more to borrow. From October 5 to 9, 2026, that tug-of-war decided which stocks rose and which fell, and it explains a lot about the stock market this week.

Here is the plain-English version: what moved, why it moved, and the one question I ask about every company I research for clients.

1. Higher interest rates can pull stock prices down

Picture a lemonade stand that earns $100 a year. If a safe savings account paid 2%, you might pay $2,000 for that stand. Now say the savings account pays 5%. The stand looks less special, so you’d pay less for it. Nothing changed at the stand. Your other choice got better.

Stocks work the same way. When interest rates rise, investors can earn more from safer places, so they pay less for each dollar of company profit. Economist Ed Yardeni laid out both sides of this in two notes this week: an earnings outlook he calls the Roaring 2020s¹, and a spectrum of reasons bond yields are rising⁹. In my view, the balance between those two forces matters more to a long-term owner than any single day of trading.

2. Four funds told four different stories

An ETF, short for exchange-traded fund, is one basket that holds many stocks at once. I watch four of them to take the market’s temperature.

Total return with dividends from Oct. 2 to Oct. 9, 2026, and from Dec. 31, 2025 to Oct. 9, 2026, based on adjusted daily closes from Yahoo Finance. These figures are based on historical market data over the periods studied and are provided for educational purposes only. Past performance does not guarantee future results.

When the equal-weight ETF beats the regular one, more companies joined the rally beyond a handful of giants. Small companies still fell, so this was no everybody-wins week.

3. Safe businesses and energy led the sectors

A sector is a group of companies that do similar work. Utilities led the week (XLU, +4.0%)¹¹. Those are the power and water companies that send you a monthly bill. Consumer staples, the things people buy no matter what, and energy came next. Technology was one of only two sectors that fell (XLK, -0.5%)¹².

Keep one week in perspective. Utilities finished the week still slightly down for the year, while technology remained up sharply for the year. A strong week can be a bounce. It does not prove a new long-term trend.

4. Inside each group, the details changed the story

Banks are the clearest example. The broad financial sector was up for the week (XLF, +2.3%)¹³, so you might guess banks had a good week. They did not. Banks were down (KBE, -1.9%)¹⁴, and regional banks were down more (KRE, -2.5%)⁷. Insurance companies and stock-trading firms lifted the group.

Technology split the same way. Software was up (XSW, +3.4%)⁵ while semiconductors were down (XSD, -4.9%)⁶. Investors are asking harder questions about the billions being spent on AI chips and data centers, and about who pays for it all. Clients often ask me whether tech was up or down in a given week. My honest answer: it depends which part.

5. The earnings case: profits can grow, but forecasts must be earned

Yardeni’s base case is that new technology helps companies make more with the same people and equipment. Earnings per share means a company’s profit divided by its number of shares. He reports that Wall Street analysts expect the S&P 500 to earn about $364 a share in 2026, $419 in 2027 and $489 in 2028¹. His own 2028 forecast is $450, below the analysts’ number. Even an economist who likes this story thinks the crowd may be too hopeful.

Profit margins matter just as much. A profit margin is how many cents of profit a company keeps from each dollar of sales. The full edition of Yardeni’s research shows analysts expecting margins to climb from about 13.2 cents in 2025 to 18.1 cents in 2028. That forecast needs fast sales growth and wider margins at the same time. If either one comes up short, the forecast misses.

Forward-looking statements are opinions as of the recording date and are subject to change without notice.

6. Why rates are rising matters as much as how far

Yardeni sorts the reasons for rising bond yields along a spectrum⁹. At the healthy end, rates rise because the economy is growing and companies want to borrow and build. In the middle sit two problems: an energy price shock tied to the war in the Middle East, and the unwinding of the yen carry trade. That second one means investors who borrowed cheaply in Japan may have to sell other things as that borrowing gets pricier. At the worrying end sits government debt. He puts the United States near the healthy end and France at the worrying end.

Here is what that means for stocks, using a made-up example, not a forecast. Say a company’s earnings grow 15%. Investors used to pay $25 for every $1 of yearly earnings, and now they pay $22. The stock price rises just 1.2%. A lower price tag ate most of the profit growth.

Strong business results do not mean a strong stock return in the short run.

7. The economy held up, and the Fed stayed firm

A monthly survey of service businesses showed growth with rising costs. In September the ISM services index came in at 54.9¹⁵, down from 55.4 in August. Anything above 50 means growth. Its prices-paid reading rose to 74.0 from 72.6, which means businesses paid more for what they buy (fuel, shipping and supplies among them).

Layoffs stayed rare. In the week ending October 3, first-time unemployment filings were 197,000¹⁶, below the 200,000 economists expected. The number of people still collecting benefits rose by 17,000 to 1.716 million. People with jobs are keeping them, while people looking for work are having a harder time.

The Federal Reserve released the minutes of its September meeting⁸. Every participant supported raising rates by a quarter of a percentage point, to a range of 3.75% to 4.00%. Several said policy was not restrictive or only mildly restrictive, and most said another increase would likely be appropriate by year-end. The next meeting is October 27 and 28.

8. The S&P 500’s biggest winners and losers

I screened the S&P 500 for the largest price changes from the October 2 close to the October 9 close.

Weekly price change from Oct. 2 to Oct. 9, 2026, based on daily closing prices from Financial Modeling Prep²⁴. Dividends excluded. These figures are based on historical market data over the periods studied and are provided for educational purposes only. Past performance does not guarantee future results.

Most of the big winners had a specific reason. Power producers drew buyers because data centers, the giant buildings full of computers that run AI, need huge amounts of electricity. Three of the five decliners make or test chips or sell chip parts, in a week when chip stocks fell as a group.

9. The ValueAligned Portfolio: five up, five down

The ValueAligned Portfolio is a list of 29 stocks. Clients I advise through Savvy hold these stocks. Here are the five that rose most and the five that fell most. These are individual stock returns, not the return of any portfolio or model.

Weekly price change from Oct. 2 to Oct. 9, 2026, based on daily closing prices from Financial Modeling Prep²⁴. Dividends excluded. These figures are based on historical market data over the periods studied and are provided for educational purposes only. Past performance does not guarantee future results.

Three of the five weakest are chip companies (TSMC, AMD and NVIDIA). That matches the chip selloff across the market. The worry is who pays for the next round of AI spending and how fast that spending earns its money back. That is a question for the whole industry, and no proof that any one company’s sales are falling.

10. What to watch next week

The government reports the Consumer Price Index²⁶ and the Producer Price Index²⁷ next week. Those measure price changes for families and for businesses. In the better case, inflation cools and companies say business is healthy, and more stocks keep joining the rally. The harder case has prices still climbing and companies sounding worried. That squeezes stocks twice: lower profits, and a lower price for each dollar of profit. Neither case is a prediction.

Forward-looking statements are opinions as of the recording date and are subject to change without notice.

Here is the question I ask about every company I research for clients. Can it grow its cash earnings per share, at good returns on the money it invests, year after year? In my view, that question beats any headline.