In AI We Trust. A slow news day couldn't stop the Nasdaq's rally, with artificial intelligence pushing the tech-heavy index to a fresh high amid a lack of other catalysts. Not all tech benefited, however.

The Dow Jones Industrial Average added 0.2% while the S&P 500 rose 0.7%. The Nasdaq Composite ended up 1.1%, its 23rd record close of 2026.

With little in the way of earnings or economic data this week, investors were searching for direction and reverted to the AI trade that's served them so well.

Rising interest rates may have weighed on markets at the end of the third quarter, but "the S&P 500 and Nasdaq hid much of that weakness, as both indexes are dominated by large technology companies, which investors see as having durable AI-driven profits," notes Ameriprise Chief Market Strategist Anthony Saglimbene.

AI was the focal point for investors with not much else to focus on Monday, although chip stocks lagged behind for much of the day in a pattern that might be worryingly reminiscent of the dot-com bust.

That weakness may not last once third-quarter earnings season begins in earnest next week. The current consensus calls for 30% growth, a deceleration from the second-quarter's 52% jump but double the pace expected at the start of the year. It "would represent the third straight quarter with 25+% earnings growth," writes Nationwide's Chief Market Strategist Mark Hackett. "Technology is expected to lead with 65% growth, driven by the semiconductor and equipment stocks."

So then -- as so often happens on Monday -- we're just watching the clock.

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No Pep

Earnings season is about to ramp up again, but it's a fairly light schedule this week. That means there's less to distract investors when PepsiCo reports later this week.

It's been difficult to be any kind of consumer stock in this market, with inflation still running high on the back of gas prices, a housing affordability crisis, and downbeat consumer sentiment -- the University of Michigan releases its consumer sentiment index for October on Friday and economists expect it to tick lower again.

Staples should be less subject to consumer cutbacks than their discretionary peers, but the category still hasn't been much of a haven. Input costs are up and demand is falling as more Americans focus on healthier foods and wellness or curb their cravings with GLP-1 medications. Meanwhile, higher interest rates give yield-hungry investors alternatives to consumer staples' traditionally generous dividends.

Amid those issues, shares of Pepsi are down 12% in 2026, trading at multiyear lows.

On one hand, investors might think that all the bad news is priced in. And from a technical standpoint "shares are extremely oversold," writes Jay Woods, chief market strategist at Freedom Capital Markets. That "doesn't mean we jump in and buy as things can remain oversold for extended periods of time. What it does mean is we may be due for a relief rally and the risk/reward over the near-term may skew bullish."

Then again, as Nike's earnings showed last week, relief rallies are far from guaranteed.

Pepsi is scheduled to report third-quarter results on Thursday morning.

The Calendar

Constellation Brands, Lamb Weston Holdings, and RPM International report quarterly results tomorrow. -- Dan Lam

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