US markets | Week of 12 October 2026
The one-page story
For most of the year the question around AI stocks was whether the demand was real. TSMC just answered that: third-quarter profit of $23.6 billion, up 68.7% year over year, its sixth straight record. This week the question changed to a different one: who pays for the buildout, and at what interest rate?
The inflation shock. September producer prices rose 1.3% on the month against a 0.6% forecast, taking the annual rate to 6.3%, the fastest since December 2022. Energy prices were up 10.8% and gasoline 20.3%, but even the measure excluding food, energy and trade services rose 0.5%. Consumer inflation, reported a day earlier, was 3.7% annually, up from 3.4% in August, with core at 2.6%.
The market reaction. On Wednesday 14 October the S&P 500 fell 1.11% to 7,718.94 and the Nasdaq Composite fell 1.88% to 26,692.87. The damage was concentrated in companies that finance data centers with debt: CoreWeave dropped more than 15% in one session, and Oracle fell nearly 9%. Micron, AMD and Nvidia slipped further the next morning. The day before, memory names had already been hit by reports that China’s CXMT is making progress on a new DRAM design, with Micron down roughly 4–5% and Samsung down more than 7% early.
Why rates matter more to AI than to most sectors. An AI data-center project is a large upfront bill paid back over many years. With the 10-year Treasury yield touching a 52-week high of 5.32% last week, and futures pricing roughly a 67% chance of a quarter-point Fed hike in December (before the PPI print), the discount rate on those future cash flows is climbing.
Rotation, not retreat. The week was not a collapse. The prior week the S&P 500 gained 1.2%, the Dow reached record territory above 51,500 and money moved into healthcare and financials. Goldman Sachs reported equities revenue up 72% to $6.44 billion and a profit of $17.01 a share against $13.02 expected. LSEG estimates Q3 S&P 500 earnings growth near 30.6%.
What to watch next week. The Fed speakers’ tone after the PPI surprise, the rest of the big-bank and early tech earnings season for any change in AI capital-spending plans, the retail sales report, and the 10-year yield against the 5.32% high.
The takeaway. The earnings are strong. The vulnerability is leverage: the market is now sorting AI winners that are funded by cash flow from those funded by borrowing.
Key data points
| Item | Figure |
|---|---|
| September PPI, m/m | +1.3% (forecast +0.6%) |
| PPI, annual | 6.3% (forecast 5.5%), highest since Dec 2022 |
| Energy / gasoline PPI | +10.8% / +20.3% |
| CPI, annual | 3.7% (Aug: 3.4%); core 2.6% |
| S&P 500, 14 Oct close | 7,718.94 (-1.11%) |
| Nasdaq Composite, 14 Oct close | 26,692.87 (-1.88%) |
| Dow, 14 Oct close | 51,621.48 |
| CoreWeave, 14 Oct | More than -15% |
| Oracle, 14 Oct | Nearly -9% |
| TSMC Q3 profit | $23.6 billion, +68.7% YoY |
| JPMorgan Q3 | Net income $15.3B, EPS $5.57 (est. $5.90) |
| Goldman Sachs Q3 | EPS $17.01 vs $13.02 est.; equities revenue +72% to $6.44B |
| 10-year Treasury yield | 52-week high 5.32% (week of 5–9 Oct) |
| Fed funds range | 3.75%–4% after September hike |
| Pre-PPI futures | ≈ 27% October hike, ≈ 67% December hike |
| Q3 S&P 500 earnings growth (LSEG est.) | ≈ 30.6% |
Sources: CNN, TheStreet, Analytics Insight, TradingKey. Figures as reported. Not investment advice.
Educational purposes only, not investment advice.
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