The S&P 500 closed above 7,800 for the first time on Tuesday, then spent the rest of the week absorbing a 24-year high in Treasury yields and a report questioning the revenue behind the artificial intelligence buildout.
Minutes of the Federal Reserve’s September meeting, released Wednesday, showed most officials expect another rate increase by year-end.
Yet Governor Christopher Waller said timing is flexible.
"The hikes do not need to come at consecutive meetings, but they should be in place in an acceptable period of time," he said.
CME FedWatch put the odds of a hike at the Oct. 27-28 meeting near 18%, about where they stood a week ago, with a December move priced at 69%.
Bond Yields Climb Anyway
The 10-year Treasury yield touched 5.36% on Wednesday, its highest level in 24 years, and the 30-year reached 5.73% midweek, also its highest since 2002. By Friday, the 10-year stood near 5.27% and the 30-year near 4.60%.
On Thursday, the Financial Times reported that OpenAI’s annualized revenue was about $20 billion below what the company had previously signaled.
The Philadelphia Semiconductor Index fell 3.4% and Micron Technology Inc. (NASDAQ:MU) lost 4.8% on the session.
But the week’s biggest story came Thursday night. Space Exploration Technologies Corp. (NASDAQ:SPCX) agreed to buy wireless spectrum that would let it compete with mobile carriers.
The Week’s Most Violent Moves Among S&P 500 Stocks
- AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) each fell 11%, marking their steepest one-day drops since 2000 and 2002.
- T-Mobile US Inc. (NASDAQ:TMUS) lost 13%, its worst day since taking that name in 2013. Tower owner Crown Castle Inc. (NYSE:CCI) jumped 12%.
- PTC Inc. (NASDAQ:PTC) led the S&P 500 for the week, up 35% after Schneider Electric SE (OTC:SBGSY) agreed to buy it for $205 a share.
- Constellation Energy Corp. (NASDAQ:CEG) gained 16% on a nuclear power agreement with Alphabet Inc.’s (NASDAQ:GOOGL) Google.
Hormuz Fuel Crisis Hits Both Wall Street And Main Street
Fuel costs reached corporate earnings on Friday. Delta Air Lines Inc. (NYSE:DAL) reported adjusted earnings of $1.72 a share, below the $1.81 consensus, and cut its full-year forecast to $5.10-$5.60 a share from $6.50-$7.50.
Its fuel bill rose 62% to $4.14 billion. Consumers have noticed.
University of Michigan’s preliminary consumer sentiment index fell to 46.3 in October from 48.1, the second-worst print in seven decades of records and below economists’ expectations of 47.6.
The gauge of current conditions fell to 44.7 from 50.9, the survey’s worst reading ever.
"Frustration over cost-of-living continues to mount," survey director Joanne Hsu said. Year-ahead inflation expectations rose to 4.7% from 4.6% and long-run expectations to 3.5% from 3.4%, both the highest since May.
Next week brings big bank earnings on Tuesday and September consumer inflation on Wednesday.
Next Week: Big Bank Earnings, September Inflation
JPMorgan Chase & Co. (NYSE:JPM) and Goldman Sachs Group Inc. (NYSE:GS) report Tuesday, with analysts expecting earnings of $5.93 and $12.86 a share. Bank of America Corp. (NYSE:BAC) follows Wednesday, with consensus at $1.10 a share.
Also on Wednesday, economists expect consumer inflation to accelerate from 3.4% to 3.6%, while core prices are seen rising 0.2% on the month, down from 0.3% in August.
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