Stock futures fell as September Inflation came in hotter than expected, pushing the 10-year Treasury Yield back to about 5.30% and gold to its lowest since early August. Bank of America tumbles on a $1.2 billion penalty, BlackRock reports record assets, and Brent holds near $106 after an attack on a Saudi Aramco building.

1. INFLATION: September CPI Rises 3.7% as Gasoline Jumps 9.1%, With Core Inflation Hotter Than Expected at 2.6%

Consumer prices rose 0.6% in September, as expected, taking annual inflation to 3.7% from 3.4% in August against 3.6% forecast. Core CPI, which excludes food and energy, rose 0.3% on the month against 0.2% expected and 2.6% on the year against 2.5% expected, up from 2.4% in August. The energy index jumped 5.2% and gasoline 9.1%, accounting for about half of the headline gain, with the national average at $4.34 a gallon against $3.08 a year earlier. Shelter rose 0.4%, used cars and trucks 0.7%, and food was flat. The report comes a month after the Fed's first hike in 3 years and 2 weeks before its Oct. 27-28 meeting.

  • Transportation services rose 0.6% after 0.5% in August, suggesting energy costs are passing through logistics and transport.
  • Risk note: producer prices, retail sales and jobless claims land Thursday, and with the Fed's preferred PCE gauge not due until the day after its next decision, CPI carries extra weight.

2. BONDS/FED: Yields Jump After CPI and October Hike Odds Climb; Gold Falls Below $4,100 and the Dollar Hits a 15-Month High

The 10-year Treasury yield rose 9 basis points to about 5.30%, the 30-year 5 basis points to 5.61% and the 2-year more than 12 basis points to 4.914%. Markets now see about a 50% chance the Fed holds in October, down from more than 78% before the report, and a nearly 99% chance of a December hike. Fed Vice Chair for Supervision Bowman said she feels "no urgency for taking further action at this point," a day after Boston Fed President Collins said she expects another increase before year-end. Gold fell below $4,100, its lowest since early August, and the dollar index rose as much as 0.5% to 102.72, its highest since April 2025. IMF chief Georgieva told Treasury Secretary Bessent that growth "cannot deliver fast enough the necessary adjustments" to debt.

  • The split between Collins and Bowman shows a committee divided on timing, which is why a core CPI beat revived October hike odds.
  • Risk note: a hot producer price reading on Thursday would reinforce the case for a move before December.

3. BANKS: Bank of America Falls 4% After a $1.2 Billion Money-Laundering Penalty; Morgan Stanley Beats on Equities Trading

Bank of America (NYSE:BAC) fell about 4% after third-quarter profit dropped 17% to 91 cents per share, or $1.08 excluding the penalty against $1.10 expected, on Revenue of $30.12 billion against $30.69 billion. The US Treasury said it failed to report more than $5 billion of suspicious transactions, the third-largest penalty in Treasury history, and regulators placed it under a consent order. Sales and trading revenue fell 5% to $5.1 billion after the bank had guided to flat. Morgan Stanley (NYSE:MS) beat with Earnings of $3.03 per share against $2.91 on revenue of $20.34 billion against $19.95 billion, as equities trading revenue rose 41% to $5.8 billion, though Investment Banking missed and fixed income fell 7%. Its shares traded lower.

  • Tuesday's big bank results were strong yet shares ended lower, suggesting a higher bar this earnings season.
  • Risk note: the consent order raises questions about controls and expenses, and BofA slipped to fourth place in global investment banking fees from third.

4. EARNINGS: BlackRock Jumps 5% as Assets Reach a Record $15.49 Trillion; ASML Beats on Profit and Hears Interest in Orders Into 2030

BlackRock (NYSE:BLK) rose about 5% after adjusted earnings of $15.93 per share beat the $14.13 expected, on revenue of $7.8 billion, up 19%. Assets under management reached $15.49 trillion from $13.46 trillion a year earlier, helped by $205 billion of inflows including $134.5 billion into iShares ETFs. Redemption requests at its HPS private Credit fund fell to about 11.5% from 13.3%. ASML (NASDAQ:ASML) reported net profit of 4.96 billion euros against 4.1 billion expected, though net sales of 11.66 billion euros narrowly missed 11.72 billion, and said some customers are "expressing an interest" in orders into 2029 and 2030. Its US-listed shares fell 1%.

  • BlackRock's flows show the AI-led Equity rally feeding asset managers, with Debt products drawing $78.2 billion despite the Treasury selloff.
  • Risk note: surging yields and a Fed hiking cycle call into question whether the rally can be sustained.

5. OIL: Brent Holds Near $106 as an Aramco Building Is Attacked and the IEA Warns of a Diesel Squeeze Into 2027

Brent crude traded near $106 and West Texas Intermediate rose nearly 2% to about $96. Saudi Arabia's energy ministry said an administrative building belonging to Aramco in Dhahran was attacked overnight, with no injuries, following Houthi strikes on Riyadh that included a fatal hit on its airport. President Trump accused the Houthis of "purposefully" trying to drive up oil prices before the midterms. The IEA said diesel Supply will stay tight into the second half of 2027, with global diesel exports down 700,000 barrels a day from a year ago. US Central Command rejected an Iranian commander's claim that Iran controls the Strait of Hormuz.

  • Trump said last week he would temporarily ease limits on Russian diesel exports, but analysts do not expect much relief for truckers and farmers.
  • Risk note: the IEA says inventories lost "crucial" stock cover ahead of peak winter demand, so new attacks on Saudi Arabia threaten any supply recovery.

6. PRE-MARKET MOVERS: Dell and HPE Fall on a Downgrade, Albemarle Gains on an Upgrade and GameStop Rises as Its CEO Buys 844,000 Shares

Dell Technologies (NYSE:DELL) fell more than 2.5% and Hewlett Packard Enterprise (NYSE:HPE) nearly 4% after Barclays cut both to equal weight from overweight, doubting that rallies of more than 350% and 185% this year can last. Albemarle (NYSE:ALB) jumped 3% after Mizuho upgraded it to outperform on lithium Demand running ahead of expectations. GameStop (NYSE:GME) gained 2% after CEO Ryan Cohen disclosed buying 844,000 shares. SpaceX (NASDAQ:SPCX) was down 3.71% as CEO Elon Musk wrote that Micron (NASDAQ:MU) has been "reasonable" on future memory prices while others have been "extortionate." Denmark's Orsted fell about 3% after the Justice Department asked a court to remand approval of its Revolution Wind project off Rhode Island.

  • Musk's post signals customer pushback on memory prices set during the global shortfall.
  • Risk note: with semiconductor earnings expected to grow 130%, the question for chip stocks is how much valuation is left.

7. MARKET SETUP: Futures Slip After CPI, Europe Gains, China's Trade Surplus Hits $938 Billion and Visa Wins Full Control of a Chinese Card Business

S&P 500 futures fell 0.2%, Nasdaq-100 futures 0.5% and Dow futures 62 points, or 0.1%. The Stoxx 600 gained 0.6%, as did France's CAC 40 and Germany's DAX, and the FTSE 100 rose 0.4%. In Asia, Japan's Nikkei 225 added 0.32%, South Korea's Kospi 0.82% and Australia's ASX 200 fell 0.62%. China's exports rose 36% in September from a year earlier, lifting its trade surplus to $938 billion in the first 9 months, on track to beat last year's $1.2 trillion record. Visa (NYSE:V) won permission to set up a card-clearing operation in China and will be the first US card firm to own its Chinese Business outright, facing UnionPay.

  • S&P 500 companies are expected to post blended earnings growth of about 30%, so the bar for the rest of earnings season is high.
  • Risk note: a strategist said chip demand is hard to argue with, but "we question how much valuation is left in the space."

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