Financials Gained 6.5% in October While Tech Lost 3.7%
Bank earnings beats and a chip-led selloff pulled two S&P sectors in opposite directions over the same three weeks — the mechanics, not a forecast.
Over the seventeen trading sessions from October 1 through October 23, 2026, the average NASDAQ-listed Financial Services stock gained roughly 6.5%. Over the same stretch, the average NASDAQ-listed Technology stock lost roughly 3.7%. That's a 10-point gap between two S&P sectors in under a month, and it didn't happen randomly — it traces back to two specific, dated events: a cluster of bank earnings reports and a chip-stock selloff. Reading the two side by side is a clean case study in how sector-level price action actually gets made, which is the same question Zorro's sector rotation model tracks on a rolling basis.
What happened in financials
On Tuesday, October 13, Goldman Sachs, JPMorgan, Citigroup and Bank of America all reported third-quarter results, and the group split on execution even as the sector as a whole kept climbing. Goldman beat decisively — EPS of $17.01 against a roughly $13 consensus — on the back of equities-trading revenue that jumped 72% to $6.44 billion, offsetting a weaker fixed-income quarter. JPMorgan missed, earning $5.57 a share against $5.93 expected, reportedly its first miss in nearly three years, on softer investment-banking and fixed-income trading. Citigroup's profit rose 40% year-over-year and beat estimates. Bank of America's net income fell to $6.9 billion after a $1.2 billion regulatory settlement charge. All of this landed against a Federal Reserve that had just raised its target rate a quarter point to 3.75%–4.00% on September 16.
A mixed set of four bank reports doesn't explain a sector-wide 6.5% gain by itself — FMP's Financial Services average covers every NASDAQ-listed stock tagged to the sector, not just the four money-center banks that reported that Tuesday. But the timing lines up: the sector's single best day in the window, +2.11%, came on October 15, two sessions after the earnings cluster, and two more strong days followed on October 22 (+1.61%) and October 23 (+1.02%). A bank sector that had been punished by a rate hike earlier this year absorbed another one in September and kept climbing anyway — a reminder that the same macro input doesn't always move the same sector the same way twice, because the input isn't the only thing that changed.
What happened in tech
Friday, October 16 was the other half of the story. A chip-stock selloff dragged the Nasdaq Composite down 2.1% that day to 26,140.03, capping a 4.5% weekly decline widely reported as the index's worst week since June. The Philadelphia Semiconductor Index had fallen roughly 15.7% over its longest losing streak since October 2008 before the slide finally broke. The proximate worry, per contemporaneous reporting, was whether the pace of AI infrastructure spending — combined 2026 capital expenditure across Microsoft, Alphabet, Amazon and Meta had already topped $452 billion — could keep justifying chipmaker valuations, with higher rates sharpening the question. FMP's average NASDAQ Technology stock fell 2.21% that same Friday, close enough to the cap-weighted Nasdaq's 2.1% move that the two measures agreed for once on both direction and magnitude — not the usual case, since one is built from every tagged stock equally and the other is dominated by its largest constituents.
Energy told the other side of that day's story: its NASDAQ average rose 1.62% on October 16, as reporting tied oil's rise that week to persistent Middle East supply risk. One sector sold off on a spending-return worry while another rallied on a supply shock, on the same trading day — the kind of simultaneous, unrelated push-and-pull that a rotation model has to net out rather than explain away with one cause.
The five-sector scoreboard
| Sector | Cumulative change, Oct 1–23 | Best single day | Worst single day |
|---|---|---|---|
| Financial Services | +6.5% | Oct 15, +2.11% | Oct 19, -0.88% |
| Energy | +3.4% | Oct 23, +3.09% | Oct 14, -2.04% |
| Consumer Cyclical | +1.8% | Oct 19, +2.28% | Oct 16, -2.44% |
| Healthcare | +1.1% | Oct 9, +2.10% | Oct 1, -2.25% |
| Utilities | -2.9% | Oct 6, +2.96% | Oct 19, -3.37% |
| Technology | -3.7% | Oct 15, +1.90% | Oct 22, -1.88% |
Figures are compounded daily averages from FMP's sector-performance-snapshot series, each sector counted as every NASDAQ-listed stock FMP tags to it, equally weighted regardless of market cap.
Why this isn't a rotation call
None of this says financials will keep outrunning tech, or that the chip selloff marks a top. Three weeks is a window too short to separate a genuine shift in capital allocation from two sectors each absorbing their own news. Utilities' -2.9% over the same stretch is proof of that: no earnings cluster, no single headline, just a sector swinging between daily gains above 2% and losses past 3% with no durable direction either way — the same kind of noise covered here before using an identical methodology. A real rotation shows up as index weight sustaining a drift over months, which is a different number from any single week's average return.
What the October divergence does show is the machinery working as described: a cluster of earnings reports with real dispersion inside them (one bank up big, one down) can still move a sector's average in one direction, while an unrelated spending-and-valuation worry in a completely different sector moves it the opposite way, in the same calendar stretch, for reasons that have nothing to do with each other. Checking which story applies to which sector — rather than reading one index headline as if it described the whole market — is what a sector-level pass on the stock screener is actually for: isolating a sector's full list of names instead of inferring its behavior from the two or three biggest ones.