Tensions in the Middle East push oil prices higher, all three major U.S. stock indexes close lower, bank earnings lose favor, tech giants become a safe haven, signals that the Fed's rate hikes are nearing an end are clear, gold spikes then pulls back, the 10-year U.S. Treasury yield hovers at a high level. Wall Street's biggest bear warns of risks in 2027, the AI narrative continues to dominate the market, TSMC and CPI data are about to be released, a single article to see the market's opportunities ahead.
Every Monday to Friday morning, we focus on macro, US equities, AI, precious metals, and crude oil, using data to review the market and trends to seize opportunities, produced by PANews.
Tensions in the Middle East push oil prices higher, Trump's "market rescue" plan struggles to take effect
The three major US stock indices closed lower collectively last night, with the Dow down 0.35%, the S&P 500 down only 0.02%, and the Nasdaq down 0.15%. On the surface, the moves appeared calm, but in reality financials and semiconductor equipment were the hardest hit, as market sentiment swung sharply between disappointment that "even good earnings get sold" and a dense wave of comments from Federal Reserve officials.
WTI crude rose about 1.1% to near $95, while Brent held at a high level. The rise in oil prices was mainly due to renewed tensions in the Middle East, after an administrative building at Saudi Aramco's Dhahran headquarters was attacked and caught fire, the Houthis threatened to strike oil facilities in the Eastern Province and Riyadh again, and multiple ships have been attacked in and near the Strait of Hormuz over the past two weeks. Trump said the Houthis "very likely intend to drive oil prices higher before the midterm elections" and is considering bringing Turkey into the action.
The market reacted coolly to Trump's attempt to lower fuel prices by "unleashing" Russian diesel supply. US diesel futures prices remained at about $4.94 per gallon, above levels before the agreement was announced. Rabobank's energy strategist pointed out that the supply scale is "too little, too late" to reverse fundamentals. In addition, the agreement carries enormous uncertainty: the supply volume Trump expects is far higher than Russia's current commitment, and the supply can only materialize if Ukraine stops striking Russian refineries, which Ukraine has already explicitly refused to do.
Fed hints rate hikes are nearing an end, BofA says 10-year Treasury yields need to rise to 5.9% to trigger repositioning
New York Fed President Williams said early this morning that one more rate hike this year is still appropriate, but that he currently sees no reason for further tightening in 2027. This remark contrasted with the market's earlier concerns about continued rate hikes in 2027 and also pushed the dollar and short-end US Treasury yields lower.
However, there is far from consensus within the Fed. Chicago Fed President Goolsbee warned that AI demand is spilling over from data centers into electricians, construction, and general services, and that difficulties in hiring workers, longer lead times for electrical components, and rising construction costs could all cause inflationary pressures to spread. Richmond Fed President Barkin said action is needed against persistent inflation.
Gold briefly rose above $4,200 before falling back, the dollar index slipped about 0.2% from a three-month high, the Treasury yield curve flattened, and the 10-year yield edged down to around the 5.2% range, still near a 24-year high. Bridgewater founder Dalio warned that supply-demand imbalances are worsening and the bond bear market is far from over. This year the government needs to roll over about $10 trillion and add about $2.1 trillion in borrowing, while corporate AI financing competes with it for funds, and traditional overseas buyers are less willing to participate.
Although the market remains wary of long-end supply, funds are still flowing in. Nearly $14 billion has flowed into US Treasury funds this month, and third-quarter inflows reached a record $59.3 billion. Asset managers including BlackRock, PIMCO, and Amundi have begun re-accumulating US Treasuries, preferring intermediate duration around 10 years, but remaining cautious on 20-year and 30-year long bonds.
A BofA survey showed that respondents believe the 10-year US Treasury yield would need to rise to 5.9% to prompt a large-scale shift in asset allocation from stocks to bonds. This means that although the current yield level is already putting pressure on stocks, it has not yet reached the threshold to trigger large-scale asset repositioning. JPMorgan CEO Jamie Dimon also reminded that the market needs to prepare for the 10-year Treasury yield rising to 6%, and stressed that if yields rise another 1 percentage point from the current level, it would cause more severe economic shocks to households, businesses, and the government than in the past.
Banks' "good results" fall out of favor, tech giants become a safe haven, big shorts say 2027 may be the real test for the bull market
The third-quarter US earnings season opened with the four major banks, but "good earnings" are losing their magic. JPMorgan fell after revenue and profit missed expectations, Goldman Sachs was knocked to a slight decline even after stock trading revenue surged 72%, Citi plunged 5.6% despite posting its best third-quarter revenue in a decade, and Wells Fargo fell more than 3% as net interest income stalled. Net interest income set a record high for the fifth consecutive quarter at $56.5 billion, but what the market wants is not growth, but "growth stronger than expected."
Legendary hedge fund manager Paul Tudor Jones said on CNBC that 2027 could be an extremely challenging year for US stocks and revealed plans to adopt a short strategy throughout 2027. He compared the current environment to 1999, saying increased new share supply could bring the most negative fund flow pattern since 2002. In his view, the key support for the bull market over the past four years came from buybacks and reduced share supply from M&A, but that logic is now reversing. Jones warned that AI companies such as Anthropic and OpenAI may see large-scale IPOs, SpaceX also recently completed an offering, and AI infrastructure requires continuous financing, meaning the market will face a large number of new shares and secondary offerings.
Goldman Sachs chief US equity strategist Ben Snider is less pessimistic. He expects US equity issuance in 2026 could exceed the 2021 record of $540 billion, but believes that whether measured by number of deals or issuance relative to market capitalization, it remains close to historical averages and is not enough to end the bull market. But Snider also acknowledged that about $1.7 trillion in shares will be unlocked in 2027, companies may also issue about $600 billion in new shares, and the net supply increase in the US public equity market could be the highest since 2000. This will pressure valuations, though it may not directly burst the bull market.
Wall Street "big short" David Rosenberg is more cautious. He said that in his 40-year career he has never seen the current market so extreme in terms of valuations, leverage, and investor positioning, and that AI's support for US stock gains even exceeds the impact of tech stocks on the market on the eve of the internet bubble. He has increased holdings of US Treasuries and overseas stocks and worries that consumers are increasingly relying on stock market gains to maintain their lifestyles, so the next bear market could produce broader social shocks.
Specific project moves and stock price fluctuations:
JPMorgan closed down 0.86%: revenue and total trading revenue were below expectations, fixed income trading fell for the first time in more than two years, and investment securities losses weighed. Dimon warned that fiscal deficits, inflation, asset prices, and geopolitical risks are still evolving.
Goldman Sachs closed down 0.23%: EPS and revenue greatly exceeded expectations, stock trading revenue soared 72%, but FICC fell nearly 1%, investment banking backlog declined, and the beat was priced in in advance.
Citi closed down about 5.6%: results beat expectations, but equity sales and trading revenue was below expectations, and credit card profit fell 8% year over year (higher rewards costs, partnership fees, and credit provisions), with the sequential weakening becoming the main reason for the selloff.
Wells Fargo fell more than 3%: revenue and net interest income missed expectations, despite strong consumer banking and lending, wealth management growth, and higher buybacks and dividends. The CET1 capital adequacy ratio fell to 10.0%.
Johnson & Johnson closed down 5.73%: sales and adjusted EPS beat expectations, but a $5.519 billion talc litigation settlement charge pushed GAAP net income down to $210 million, a year-over-year decline of 95.9%. More worrying for the market was the slowdown in the medical technology business, from 7.7% in the first quarter and 4.6% in the second quarter to 2.5% this quarter. Related healthcare sector: the healthcare sector fell about 1.33%, one of the main drags on the S&P.
Applied Materials closed down 6.69%: semiconductor equipment stocks were one of the biggest drags last night, amid market concerns about a peak in the memory cycle, progress in China's DRAM supply, and declining marginal returns on AI capital expenditure. The company's CEO said revenue is expected to double in the coming years, but headcount will not grow in tandem, and AI will be used in product development, quality control, and customer-site manufacturing processes to improve productivity.
Micron Technology closed down 3.62%: the memory chip sector suffered a repricing of supply expectations, and sharp declines in South Korea's SK Hynix and Samsung Electronics triggered a global memory chain selloff. The market is worried about intensifying competition in DRAM and server memory, a possible peak in the pricing cycle, and the earnings upgrade logic facing scrutiny. The memory sector fell broadly: SK Hynix's US ADR dropped more than 3%, SanDisk closed down 0.34%, and Seagate narrowed losses to about 0.8% after falling more than 6% intraday.
Apple rose 0.09%, a record closing high: intraday market capitalization briefly topped $5 trillion, making it another US company after Nvidia to touch that threshold. Apple released the smart home hub HomeView, priced at $299, equipped with a 7-inch screen, supporting desktop and wall-mounted use, shipping on November 13; it features Siri AI, supports up to six users through facial recognition, and integrates FaceTime, music, calendar, reminders, and smart home control. The company also released a new Apple TV 4K and HomePod Mini, and partnered with LG and Schneider to launch a smart home accessory line. In related business, in the most recent quarter ended June this year, Apple's wearables, home, and accessories business generated $7.88 billion in sales, accounting for about 7% of the company's total revenue.Meta closed up 2.63%: Meta launched an AI-driven algorithm customization tool on Facebook, allowing users to tell the system in natural language what content they want to see; meanwhile, Pivotal Research raised its Meta target price from $790 to $930, maintaining a "Buy" rating. Meta AI head Alexander Wang revealed that the company is making high-intensity bets on the Muse Wonder model and personal superintelligence, and the market views it as a representative of the ability to deliver on the AI application side.
Nvidia closed up 0.97%: Jensen Huang announced in Paris that Nvidia will take a stake in French healthcare platform Doctolib, with the investment amount undisclosed, and will support its development of AI assistants for doctors and patients; Huang also said Nvidia has invested at least $8 billion in Europe over the past year and will announce more than $2 billion in European investment plans in the coming week.
Alphabet-A closed up 0.30%: Google officially launched Gemini 4 Argon, opening it to Google AI Pro and Ultra subscribers, Gemini API developers, and enterprise users. DeepMind said the model is aimed at complex problem-solving and has frontier capabilities in programming, enterprise workflows, and cybersecurity defense.
Microsoft closed up 0.43%, setting a record closing high for the first time since October 2025: the market continues to bet on the operating leverage brought by its cloud business, AI software revenue, and in-house chip deployment.
SpaceX closed down 4.21%: SpaceX's AI business confirmed it will attend a New York City Council AI safety hearing on October 16 to respond to issues including data privacy, security protections, and whistleblower protection. The company previously did not attend the October 5 hearing and faces subpoena and enforcement pressure, with regulatory risk beginning to weigh on the capital narrative.
Visa closed up 1.74%, while Mastercard also hit a record high: Visa received approval from China's central bank to prepare to establish a bank card clearing business in mainland China, advancing further into China's local payments market. Visa CEO Ryan McInerney said the company has participated in China's payments ecosystem for more than 40 years and looks forward to advancing its local business in accordance with PBOC regulations.
Bank of America fell 2.24% after hours: on the eve of earnings, the U.S. Treasury Department fined the bank a total of about $1.2 billion due to serious and persistent anti-money laundering and sanctions compliance issues. Regulators determined that the bank failed to report more than $5 billion in suspicious transactions as required, with the OCC issuing a $750 million civil penalty, while OFAC also reached an $11.6 million settlement over alleged violations of sanctions related to Iran, Russia, drug trafficking, and terrorism.
What to watch next:
October 14 (Wednesday)
20:30 U.S. September CPI release: this is the last inflation report before the Fed's October 27-28 policy meeting. If headline CPI is above 3.7% or core CPI rises 0.3% month over month, the market may reprice the rate hike path for October or even December, pressuring growth stocks and pushing up the dollar and Treasury yields; if core CPI remains at 0.2%, it would be conducive to a short-term recovery in risk assets.
The U.S. additional port fee on ships owned, operated, or built by China takes effect: this will affect shipping costs and the China-U.S. trade chain. The market is watching the impact on Chinese exporters, shipping companies, and car carrier vessels.
Korea Semiconductor Exhibition (SEDEX 2026), running through October 16: the theme is "Entering the Silicon Intelligence Era," with Samsung Electronics and SK Hynix set to showcase next-generation memory solutions in a bid to boost market confidence.
Anthropic holds Pre-IPO investor day: the market is focused on its revenue, cloud partnership costs, compute leasing contracts, and IPO timetable. If it discloses strong revenue growth, AI sentiment will be boosted; if cost pressure is too great, the market will continue to question AI commercial returns.
Earnings: Bank of America, Morgan Stanley, BlackRock, and ASML report results: Bank of America and Morgan Stanley will complete the picture of major bank earnings, BlackRock will reflect global asset management fund flows; ASML is a core event in the semiconductor equipment chain, and orders and guidance will affect sentiment in the AI chip sector.
October 15 (Thursday)
02:00 The Fed releases the Beige Book on economic conditions: the Beige Book will reflect consumption, employment, wages, and prices across U.S. regions. If it shows a strong economy and high inflation stickiness, rate hike expectations will rise; if it shows cooling demand, interest rate pressure may ease.
G20 finance ministers and central bank governors meeting held: the market is focused on discussions of global debt, inflation, exchange rates, and financial stability. If the meeting emphasizes fiscal risks and high interest rate pressure, it may continue to affect long-end bond yields.
Nvidia China Developer Day held in Suzhou, running through October 16: the market is focused on Nvidia's statements on China's ecosystem, developer tools, AI applications, and compute solutions. If there are new partnerships or product updates, they may affect discussions of AI applications and domestic compute substitution.
Tesla's next-generation Roadster event held: the market is focused on the new car's performance, mass production timing, and whether it incorporates SpaceX-related technology. If the launch exceeds expectations, Tesla and the high-end EV chain may receive a sentiment catalyst; if it is delayed again, the market may be disappointed.
Earnings: TSMC reports third-quarter results, Alcoa reports after the close: TSMC is the most critical event in the AI hardware chain, with the market focused on AI chip demand, advanced process capacity utilization, advanced packaging revenue, and capital expenditure plans. If guidance is strong, Nvidia, semiconductor equipment, AI servers, and the optical module chain will benefit; if demand or capital expenditure slows, AI hardware stocks may come under pressure.