10-15-2026: Hot CPI and PPI, Yield Reversal, AI Angst + Staples Rally

Eric Criscuolo, Market Strategist at the NYSE, reviews a choppy week in which the S&P 500 slipped about 1% after a hot core CPI print sent yields sharply higher, only for a full reversal to offer equities no relief. Tech led the retreat, down roughly 4% with memory names hit hardest, as AI spending doubts and slowing growth at Anthropic fueled the bear case. A hotter PPI and a core retail sales miss then pushed 10 and 30-year yields down 15-20 basis points. Strong breadth lifted the equal-weight index as investors rotated into Staples and Healthcare, both up about 4%. Looking ahead, Meta, Tesla, IBM, SAP, and Blackstone headline a very busy earnings slate.

Hey, I'm Eric Riscolo, market strategist at the New York Stock Exchange. And this is Market Storylines.

Every week, we're here to keep you up to date on the key trends and events driving global markets.

We're recording this on Thursday, October 15th, because the intelligence formerly known as artificial or TIFCA has still not destroyed humanity. Yet.

While the human race continues on, the Yankee season sadly did not.

While no more local playoff with no more local playoff games, excuse me, we were all geared up for the beginning of Q3 earnings season this week.

Now, Michael noted the shifting dynamics of last week, including another record for the S&P, talk of renewed US strikes in Iran, and a pause in the move higher in yields.

Now, Monday was quiet with bond markets closed, and my family and I taking a day trip to Kartrite indoor water park.

The big financial stocks then took their positions in the earnings leadoff spot on Tuesday. which was also my daughter's birthday. Happy birthday, Devon.

Citigroup, JP Morgan, Wells Fargo and Bank of America all reported that overall economic dynamics are solid, consumer trends remain healthy, and credit performance is stable if not strong.

However, the stocks largely fell after the results.

Tech was a little wobbly as well to start the week, especially the semiconductor and memory stocks.

Concerns about Chinese competition, AI capital raising and rising credit spreads weighed more on the sector.

Broadcom CEO generated headlines after commenting that AI investors were quote, gambling with little understanding of what they're betting on.

The kindling ignited on Wednesday, triggered by a hot core CPI print.

Treasury yields exploded higher right after the data and more rate hikes got priced into expectations.

The 10-year jumped 15 basis points and the two-year about 20 basis points. That immediately put equities under pressure.

The S&P 500 fell over 1%, breaking a streak of 53 trading days without a 1% decline.

Small caps saw larger losses and the overall AI trade was under a barrage of fire.

Meanwhile, Anthropic showed impeccable timing as it hosted a pre-IPO investor day.

Details trickled out including Q3 revenue of about 17 billion, which grew 45% sequentially.

Now that sounds incredible, but that growth is a slowdown from Q2's 143% growth, fueling the bear narrative.

Perhaps the bigger story, however, was the huge reversal in Treasury yields.

By the time equities opened after the CPI data, yields had peaked and were already turning back.

As the NYSE closing bell rang, 10 and 30 year yields were down about two to three basis points on the day, and the two-year was flat.

It was very notable that the complete U-turn did nothing to help equities.

Now today, we got another hot inflation print with the PPI. Actually, it was much hotter than the CPI.

This time, yields skipped the upside feign and used and just went lower.

A miss in core retail sales out at the same time contributed to the move lower.

Now as we record this, two-year yields are down a couple of basis points for the week, but 10 and 30-year yields are down 15 to 20 basis points.

After a big run up in Q3, a narrative shift is occurring for yields. Inflation remains high, keeping the near term priced for higher rate levels, if not further hikes.

However, demand concerns are rising.

If AI spending slows, equity markets will likely come under pressure, and overall demand in the economy could slow, as AI is such a huge driver.

Now it raises questions about longer-term growth and puts Treasuries in a better position, especially with rates still high currently, allowing investors to lock in yields at these levels.

Now as we record this, the S&P 500 has rallied off its lows getting back into the green today, after trading below its 50-day moving average.

For the week, the S&P is down about 1% but the equal weight is up about 0.5% as strong breadth overcomes weak mega caps and investors rotate into defensive and non-tech sectors.

Consumer staples and healthcare are very strong this week, with both sec- with both sectors up about 4%, and strong across the board.

Tech is the big laggard down about 4% with memory names hit especially hard.

Now while they didn't yesterday, small caps are reacting positively to today's decline in yields, but are still down for the week.

Despite the tech concerns, it's notable that the VIX remains well under 20.

A looking across other asset classes, oil is higher this week, with hostilities continuing across the Middle East.

The US military is looking into plans to use the MOAB or Mother of all Bombs, non-nuclear, if new strikes are ordered according to reports.

Precious metals are lower but started to show some signs of life on today's drop in yields. And the dollar is higher, is lower, excuse me, as well.

Bitcoin is about flat on the week.

Now looking to next week, earnings will continue to pour in. Given all the AI angst, Meta will be a very important update, along with IBM, SAP, Tesla, Blackstone, and Western Digital among many others.

The data calendar will be light, headlined by Flash PMIs and China data.

But most importantly, the NBA champion New York Knicks will begin their title defense and raise their championship banner on Tuesday night.

You can catch Market Storylines on tv.myse.com or on the NYSE YouTube channel.

Thanks for joining me. I'm Eric Riscolo. We'll see you next week. Go Knicks.