Week in review: record highs, but an even narrower market

Good morning. It's Sunday, so let's wrap up the week. On the surface it was a good one. The major indices finished higher, and the Nasdaq and S&P 500 kept brushing against record highs. The Fed minutes were hawkish, and AI stocks had one day of sharp wobbling on a report about OpenAI's revenue, but they recovered by the next day.

Beneath the surface, though, the market got narrower. Small caps fell a fifth straight week as yields surged, and the top 10 stocks now make up 40% of the S&P 500, double the 20% of 1990. A handful of giant tech names are carrying the index while everything else is held down.

Meanwhile the bond market keeps sending signals. The 10-year yield touched 5.36% at one point, and one analyst described the problem as systemic across global government bonds rather than any one country's. The US deficit reached about $2 trillion this year, and the extra yield demanded on high-yield bonds has widened. President Trump struck a deal with Putin to import 300,000 tons of Russian diesel, but critics call it too little, too late.

Next week, all of this gets tested. Big banks like JPMorgan and Goldman Sachs start the earnings season, and September inflation arrives. Some survey measures point to a jump back toward 2022 levels, so tension over the number is high.