October 10, 2026

October 10, 2026 | Market Commentary | Can Stock Prices Continue to Rise Even with US Long-Term Interest Rates Above 5%? Focus on Major Bank Earnings and US CPI

As of publication: October 10, 2026, 18:15 (JST). As it is Saturday, the stock markets in Japan, the US, Europe, and China are closed. Cryptocurrencies are trading 24/7, so they are currently active.

Data as of (all times in JST)

US Stocks (S&P 500, NY Dow, Nasdaq Composite, Russell 2000): Closed, closing prices for regular trading on October 9, as of October 10, 2026, 4:59
VIX Index: Closed, as of October 10, 2026, 5:14
Japanese Stocks (Nikkei 225, TOPIX): Closed, closing prices on October 9, as of October 9, 2026, 15:30
European Stocks: Closed, DAX as of October 10, 2026, 0:38, UK 100 as of 0:35
Chinese/Hong Kong Stocks: Closed, Shanghai Composite as of October 9, 2026, 15:59, Hang Seng as of 16:59
Foreign Exchange (USD/JPY, EUR/USD): Closed, as of October 10, 2026, 5:58
US 10-Year Treasury Yield: Closed, as of October 10, 2026, 5:59
Japanese 10-Year Treasury Yield: Closed, as of October 10, 2026, 2:12
WTI Crude Oil: Closed, as of October 10, 2026, 5:59, Brent Crude Oil: Closed, as of 5:58
Gold: Closed, as of October 9, 2026, 13:58 (this is an outdated value)
Bitcoin, Ethereum: Trading, as of October 10, 2026, 18:15

Introduction: Stock Prices Continue to Rise Amid High Interest Rates and High Oil Prices

The biggest theme this week is the tug-of-war between “US long-term interest rates being at their highest level in about 24 years while stock prices remain near record highs.” The US 10-year Treasury yield rose to 5.3645% on October 7. This is the highest level since April 2002. The background is the rise in energy prices due to the war in the Middle East. Because of this, there is growing concern that inflation (rising prices) will be prolonged.

The FRB (Federal Reserve Board) implemented a 25 basis point (0.25%) interest rate hike in September. This is the first rate hike since 2023. In the minutes released on October 7, the majority of participants viewed another rate hike within the year as appropriate.

Terminology: The FRB is the highest decision-making body of the US central banking system and is the organization responsible for managing monetary policy. Terminology: Basis point is a unit used to express changes in interest rates or yields; 1 basis point is 0.01%. 25 basis points corresponds to 0.25%.

The reason stock prices are still resilient is the strength of corporate earnings. An analysis article by Investing.com points out that US companies have continued to see double-digit profit growth for seven consecutive quarters. The profit growth forecast for the July-September quarter is approximately 25% year-on-year in that article. On the other hand, Reuters reports that LSEG data predicts about 30%. Since the forecast figures differ depending on the report, it is necessary to check the latest aggregate data from primary sources.

There are two major points of focus going forward. One is the US September Consumer Price Index (CPI) to be announced on October 14 at 21:30. The other is the earnings of major banks, which will begin in earnest from October 13. Furthermore, the US midterm elections on November 3 are approaching. President Trump stated on a posting site on October 8 that he would not attack Iran until the midterm elections. This statement has temporarily calmed oil prices. However, the statement does not have legal binding force, and the situation in the Middle East remains fluid.

Conclusion: The biggest theme is the structure where earnings support the ‘weight of interest rates and oil’

US stocks rebounded on October 9. The S&P 500 rose 0.59%, the NY Dow gained 0.83%, and the Nasdaq Composite climbed 0.64%. However, high-tech stocks were sold off heavily the previous day, October 8. The S&P 500 Information Technology sector fell 2.1%, and the Philadelphia Semiconductor Index dropped 4%. This was triggered by a report from the Financial Times questioning OpenAI’s revenue growth.

Market movements are not uniform. The NY Dow rose 0.93% for the week, and the S&P 500 gained 1.15%. On the other hand, the Russell 2000 is noticeably lagging, down 0.91% for the week and 2.90% over the past month. Small and mid-cap stocks, which are sensitive to the economy and borrowing costs, tend to be easily affected by high interest rates.

According to Reuters, LSEG Lipper data shows that $5.11 billion flowed out of US stock funds in the week ending October 7. This is the first outflow in three weeks. Meanwhile, US bond funds saw a record weekly inflow of $19.78 billion, and money market funds (MMFs) also saw an inflow of $68.49 billion. Sector-specific funds, such as those for high-tech, saw an inflow of $5.68 billion. This suggests that investors are not selling stocks across the board, but are being selective about where they place their capital.

Brent crude oil rose 2.42% for the week, and the dollar strengthened, reaching its highest level in about five months. Nevertheless, stock prices remain resilient because the strength of the numerator (corporate earnings) is offsetting the weight of the denominator (interest rates and oil prices). However, this dynamic could change if expectations for AI-related financing and performance collapse.

Current State of Global Markets

US Stocks (Closing prices for regular trading on October 9. Market closed)

S&P 500: 7,811.54 (Change from previous day +46.18, +0.59%) | Market Closed | As of 4:59 AM, October 10, 2026
NY Dow: 51,654.95 (Change from previous day +423.31, +0.83%) | Market Closed | As of 4:59 AM, October 10, 2026
Nasdaq Composite: 27,366.17 (Change from previous day +172.83, +0.64%) | Market Closed | As of 4:59 AM, October 10, 2026
Russell 2000: 2,806.98 (Change from previous day +12.85, +0.46%) | Market Closed | As of 4:59 AM, October 10, 2026
VIX Index: 14.84 (Change from previous day -0.57, -3.70%) | Market Closed | As of 5:14 AM, October 10, 2026
Click here for the latest Fear & Greed Index information! It shows NATURAL at 45

The S&P 500 closing price is about 0.1% below its record closing high of 7,818.93 on October 6 (according to analytical articles). The Nasdaq Composite rose 0.64% for the week and 4.92% over the past month. It is an index centered on large-cap high-tech stocks.

The NY Dow is an index with only 30 constituent stocks, and has a high weighting of cyclical and defensive stocks. Its gain on October 9 outperformed the S&P 500 and the Nasdaq.

The Russell 2000 is an index composed of 2,000 US small and mid-cap stocks. It is easily affected by the economy and the domestic financing environment, and tends to be relatively weak in high-interest rate environments.

Terminology: The Russell 2000 is a stock index composed of approximately 2,000 US companies with smaller market capitalizations, indicating the trends of small and mid-cap stocks.

The VIX index is at 14.84, a level close to the lower end of its 52-week range (13.38–35.3). Market fear is relatively calm. However, a low level does not necessarily mean safety. It can sometimes indicate that there is little preparation for sudden negative news.

Terminology: The VIX index is an index calculated from S&P 500 option prices, indicating the expected range of stock price fluctuations over the next 30 days. It is also called the “Fear Index.”

European Stocks

DAX (Germany): 25,087.27 (Change from previous day +280.30, +1.13%) | Market Closed | As of 12:38 AM, October 10, 2026
FTSE 100: 10,552.05 (Change from previous day +110.45, +1.06%) | Closed | As of October 10, 2026, 0:35

Asian Stocks

Nikkei 225: 69,030.92 (Change from previous day -11.19, -0.02%) | Closed | As of October 9, 2026, 15:30
TOPIX: 4,104.81 (Change from previous day +13.35, +0.33%) | Closed | As of October 9, 2026, 15:30
Shanghai Composite Index: 3,813.79 (Change from previous day +1.89, +0.05%) | Closed | As of October 9, 2026, 15:59
Hang Seng Index: 24,211.35 (Change from previous day +425.56, +1.79%) | Closed | As of October 9, 2026, 16:59

Bonds, Currencies, Commodities, and Crypto Assets

US 10-Year Treasury Yield: 5.244% (Change from previous day +0.011 points) | Closed | As of October 10, 2026, 5:59
Japan 10-Year Government Bond Yield: 3.001% (Change from previous day -0.09 points) | Closed | As of October 10, 2026, 2:12
USD/JPY: 158.33 yen (Change from previous day +0.45 yen, +0.29%) | Closed | As of October 10, 2026, 5:58
EUR/USD: $1.1202 (-0.09% from previous day) | Closed | As of 5:58 AM, October 10, 2026
WTI Crude Oil: $91.66 (+$0.17, +0.19% from previous day) | Closed | As of 5:59 AM, October 10, 2026
Brent Crude Oil: $104.42 (-$0.30, -0.29% from previous day) | Closed | As of 5:58 AM, October 10, 2026
Gold: $4,191.0 (+$59.2, +1.43% from previous day) | Closed | As of 1:58 PM, October 9, 2026
Bitcoin: $82,920 (+0.30%) | Trading | As of 6:15 PM, October 10, 2026
Ethereum: $2,497.03 (-0.21%) | Trading | As of 6:15 PM, October 10, 2026

Important News

1. Headwinds for AI-related stocks; Nvidia and Intel decline (US trading on October 8, reported at 9:35 PM on October 9)

What happened: Following a report by the Financial Times, doubts have spread regarding OpenAI’s revenue growth. Nvidia (NVDA) and Intel (INTC) were sold off.

Numbers: Nvidia was down 3.1%, and Intel was down 6.3%. The S&P 500 Information Technology sector was down 2.1%, and the Philadelphia Semiconductor Index was down 4%. Reuters reports that OpenAI’s annualized revenue for September was $20 billion lower than previously indicated levels. This figure is based on reports and has not been officially confirmed.

Market reaction: On the following day, October 9, the Nasdaq Composite rebounded by +0.64%.

Bullish factors: The sell-off was triggered by doubts regarding the revenue outlook of specific companies, not a contraction in AI demand itself. Reuters reported on October 9 that $4.53 billion flowed into tech sector-specific funds for the week. This indicates that there is still capital looking to buy the dip.

Bearish factor: The larger the investment in AI, the greater the disappointment if revenue growth falls short of expectations. During the earnings season, the outlook for the return on investment for AI-related companies will be questioned once again. Read more

2. Reports of Massive Fundraising by Broadcom and SpaceX (Reported on October 9 at 19:47)

What happened: Reuters reported on a story from The Wall Street Journal. Broadcom (AVGO) is seeking to raise $50 billion in funding. SpaceX (SPCX) is reported to be planning to purchase Nvidia semiconductors through the issuance of $30 billion in investment-grade bonds and $10 billion in loans.

Numbers: The total is in the tens of billions of dollars in bonds and loans. This report does not include comparisons to earnings forecasts.

Market reaction: We have not confirmed a stock price reaction to this report alone. In the bond market, AI-related borrowing demand is being recognized as one of the factors pushing up long-term interest rates.

Bullish factor: The fact that major companies are able to raise such large amounts of capital itself indicates that demand for AI investment remains strong.

Bearish factor: When companies issue large amounts of bonds, supply and demand in the bond market, including government bonds, can deteriorate, potentially pushing up interest rates. As investment is expanded through debt, the burden becomes greater if monetization is delayed. Read more

3. Farm Equipment Stocks Like Deere and AGCO Fall (Reported on October 9 and October 10 at 4:28)

What happened: Deere (DE) and AGCO (AGCO) and other farm equipment manufacturers fell. This is because the U.S. Department of Agriculture (USDA) upwardly revised its forecasts for corn yield and production. Furthermore, this week, the USDA and the Federal Trade Commission (FTC) announced a joint investigation into anti-competitive practices in the farm equipment market.

Numbers: Deere was down 4% on October 9 and down 9% for the week. AGCO was down 5%.

Market reaction: It was reported that Deere is on track for its worst weekly performance since August 2024.

Bullish factor: The investigation has only just begun, and the magnitude of the results and impact is still unknown. Some may view the significant drop in stock price as an indication that the bad news has already been priced in.

Bearish factor: Falling crop prices put pressure on farmers’ incomes, which could lead to a move to refrain from purchasing expensive machinery. If the regulatory investigation drags on, they may be forced to review their business practices. Read more

4. Hims & Hers Rebounds, Citi Points to Downside Potential (Reported on October 10 at 3:21)

What happened: Hims & Hers Health (HIMS) rose on news related to peptides (compounds consisting of linked amino acids). Meanwhile, Citi sees 17% downside potential from the current stock price.

Numbers: 10/9 trading was +7%. The previous day, 10/8, was -5.3%. Price targets are $32 from Truist and $25 from Citi. The next earnings release is 11/9, with an EPS forecast of $0.057 and a revenue forecast of approximately $892.9 million.

Market reaction: Trading volume was lower than the 3-month average, and it is reported that this may include buying back after the previous day’s decline.

Terminology: A buyback is a transaction where investors who had sold in anticipation of a stock price decline buy back the shares to limit losses or lock in profits. It can be a factor that pushes up stock prices.

Bullish factor: If the product launch plan for peptides is realized, there is room for the business transformation to translate into earnings.

Bearish factor: There have been 6 downward revisions to EPS forecasts and 0 upward revisions in the past 90 days. Analysts are cautious about the contribution to short-term profits. Read more

5. Humana hits 52-week high, Baird upgrades (Reported Oct 10, 1:58)

What happened: Baird upgraded Humana (HUM) to ‘outperform’. Cantor reaffirmed its ‘overweight’ rating.

Numbers: Baird’s price target is $596. The stock reached a 52-week high.

Market reaction: The stock reached a 52-week high on expectations of margin recovery.

Bullish factors: If profit margins in the health insurance business improve, it will lead to a recovery in earnings.

Bearish factors: Since the stock is at a high level, expectations may be priced in. If actual margins fall short of expectations, there could be a backlash.Read more

6. Oil-Dri reports record earnings, falls in after-hours (Reported Oct 10, 0:43)

What happened: Oil-Dri Corporation of America (ODC) announced its fiscal 2026 results (full year including Q4 ending July). Full-year revenue, net income, and EBITDA were at record highs.

Numbers: Q4 revenue was $129.29 million, and EPS was $1.00. Full-year EBITDA was $93 million.

Market reaction: The stock fell -4.89% to $80.25 in after-hours trading. The closing price was $84.37. It was up +73.83% year-to-date.

Bullish factors: Cash is at a record high of $74 million, up +45% year-over-year. The new cat litter segment grew +47% for the full year.

Bearish factors: After a significant rise in the stock price, it is a phase where profit-taking is likely even with good earnings. It suggests the market is cautious about the sustainability of growth.Read more

7. AnaptysBio reports earnings significantly beating expectations (Reported Oct 10, 17:16)

What happened: AnaptysBio (ANAB) announced its earnings.

Numbers: EPS was $5.11, beating the expected loss of -$0.47 by $5.58. Revenue was $27.49 million, exceeding the expected $14.06 million.

Market reaction: The latest closing price is $45.95. It is -34.18% over 3 months and +46.48% over 12 months.

Bullish factors: It posted a significant profit against loss expectations, and revenue was about twice the forecast.

Bearish factors: It is impossible to determine from the article whether the profit is due to one-time income or recurring revenue. Confirmation from primary sources is required.Read more

US Market and Monetary Policy

Movement of US Treasury yields

The US 10-year Treasury yield was 5.244%, a weekly change of -0.63% (rate of change in level). On October 7, it hit 5.3645%, the highest level in about 24 years. On October 8, the 10-year Treasury auction was at 5.300%, and the 30-year Treasury auction was at **5.618%**. The 30-year bond yield is at its highest since August 2000. The bid-to-cover ratio was 2.54, exceeding the average of 2.41 for the last six auctions. Demand was strong, and yields fell after the auction.

Terminology: A government bond yield is the annual rate of return if you buy a government bond and hold it until maturity. When the price of a government bond falls (is sold), the yield rises.

There are several reasons why yields have risen.
First, there is concern that inflation will persist due to rising energy prices.
Second, there is speculation that the Fed will move to raise interest rates further.
Third, there is the scale of US government borrowing.
Fourth, there is the expansion of funding for AI-related investments.

Terminology: The term premium is the additional yield that investors demand as compensation for bearing the risks of interest rate fluctuations and inflation by holding long-term bonds. It tends to rise when the supply of bonds increases.

Terminology: The policy interest rate is the short-term interest rate that a central bank uses as a target for monetary policy, and it serves as a benchmark for interest rates for financial institutions and the market.

Fed Official Statements and Rate Hike Speculation

Fed Governor Waller stated that the Fed does not need to raise interest rates at every meeting, acknowledging the possibility of a pause at the next meeting. At the same time, he pointed out that additional rate hikes might be necessary to return inflation to the 2% target. St. Louis Fed President Musalem stated that additional monetary tightening is necessary to return inflation to 2% within a reasonable period. He also mentioned that it might be necessary to raise interest rates over the next 6 to 9 months. He did not explicitly state whether he would vote for a rate hike at the FOMC (Federal Open Market Committee) meeting on October 27-28.

Terminology: Monetary tightening is a policy where a central bank raises policy interest rates to curb overheating in the economy or inflation. It is generally considered a headwind for stock prices and real estate.

The figures for rate hike speculation vary by report. An analysis article from 20:29 on October 9 puts the probability of a rate hike on October 28 at 17% and the probability of a rate hike by December at 83%. Another analysis article from 21:15 on October 9 reports that the view of a pause in October is dominant, and the probability of a rate hike in December is at a high level.
Please check the latest probabilities here.
Click here for the latest information on the CME FedWatch tool!

Price Indicators and Consumer Sentiment

The University of Michigan’s October Consumer Sentiment Index was 46.3. This is a decline from 48.1 in September and marks the third consecutive month of deterioration. Market expectations were reported as 47.5 by Investing.com and 47.8 by Reuters. The 1-year expected inflation rate was 4.7%, up from 4.6% previously. The long-term expected inflation rate was 3.5%, up from 3.4% previously. The August Consumer Price Index was +3.4% year-on-year. The burden of prices and borrowing costs is weighing down household sentiment.

Impact of the Midterm Elections (November 3)

According to Reuters, the burden of living costs is a major issue in the midterm elections. President Trump’s approval rating is reported to be at its lowest level since he became a politician. Public opinion polls indicate the possibility that the Republican Party could lose its majority in at least one of the two houses of Congress.

Regarding the relationship with the market, there are two views. The first is based on historical data. According to an Investing.com article, in midterm election years from 1982 to 2022, the S&P 500 was slightly negative on average from January to September, but averaged +6.6% from October to December. This is because policy uncertainty tends to diminish after the election. The second is a cautious view. An analysis article from 20:29 on October 9 points out that the view that “stocks do not fall before an election” has not held true in the past.

President Trump posted on October 8 that he would not attack Iran before the midterm elections. Meanwhile, The New York Times, The Wall Street Journal, and others have reported, citing anonymous officials, that the Department of Defense has drafted attack plans. The veracity of this needs to be confirmed by official announcements.

The political impact also has both bullish and bearish aspects. A bullish factor is that if the balance of power in Congress changes after the election, it could put a brake on the expansion of fiscal spending and ease the supply pressure on government bonds. An analysis article from 3:28 on October 9 points out that President Trump is seeking a 50% increase in military spending to $1.5 trillion. A bearish factor is that political uncertainty before and after the election could increase volatility in interest rates and exchange rates.

Actions of Treasury Secretary Bessent

Treasury Secretary Bessent will miss the IMF (International Monetary Fund) and World Bank annual meetings to be held in Bangkok, Thailand, next week. He cited domestic scheduling conflicts as the reason. The US delegation will be led by Deputy Treasury Secretary Francis Brooke and Under Secretary for International Affairs Erin Brown. Reuters points out that this absence comes at a time when US long-term interest rates are at their highest level in about 25 years and energy prices are pushing down global growth due to the war in the Middle East. He is expected to attend the G20 summit in December (Miami, Florida, USA).Read more

For the University of Michigan survey, please see the following article.Read more

For statements by Fed officials, please see the following article.Read more

For the relationship between midterm elections and the stock market, please see the following article. Read more

Flow of Funds from Buyers and Sellers

According to Reuters, US bond funds saw a record weekly inflow of $19.78 billion. Inflows into short-to-medium-term US Treasury funds reached $6.76 billion, the largest in six months. High yields are attracting capital.

Dollar Movements

According to an analysis article from 22:23 on October 9, the dollar lost momentum after a four-week rally. This comes against the backdrop of ECB President Lagarde stating that there are tools to address disorderly market movements. However, the dollar remains at a high level. Read more

European Markets

The DAX was up 1.13% at 25,087.27, and the UK 100 was up 1.06% at 10,552.05. However, it was a soft week for the DAX, down 0.50% for the week and 1.84% for the month.

In Europe, tensions in the bond market persist. According to Reuters, the yield spread between French and German 10-year bonds has widened to over 140 basis points, the widest level since 2012. The French government has set a goal in its 2027 budget proposal to reduce the fiscal deficit from this year’s projected 5.4% to 5%. However, with a divided parliament, passage is difficult. Spanish Prime Minister Sanchez announced that a general election will be held on November 29.

The euro hit a roughly 17-month low of $1.1161 on October 5. On October 9, it was at $1.1202. Inflation in the eurozone is around 3.8%, and the view remains that the ECB will raise interest rates further before the end of the year. However, Reuters reports that the ECB may become cautious given the volatility in the bond market.

A bullish factor is that the yield spread between France and Germany narrowed following President Lagarde’s remarks. A bearish factor is that political risk and concerns over debt continue to weigh on the euro. Read more

Japanese Market and Foreign Exchange

The Nikkei Stock Average ended the day almost flat at 69,030.92 (-0.02%). It is up 5.97% for the month and 35.33% year-to-date. The TOPIX was up 0.33% at 4,104.81.

The Japanese 10-year bond yield was 3.001%. This is a significantly higher level compared to a year ago. According to an analysis article from 23:53 on October 9, US Treasury data reports that Japan’s holdings of US Treasuries fell by approximately $106 billion, from about $1.210 trillion in April to about $1.104 trillion in July. However, changes in holdings also include the impact of price fluctuations.

The dollar/yen was at 158.33 yen (+0.29%). The weekly foreign exchange outlook from 15:22 on October 10 cites concerns over a resurgence in US inflation due to the Middle East situation and rising oil prices, as well as the Japan-US interest rate gap, as factors for dollar buying. On the other hand, factors for dollar selling include expectations of additional interest rate hikes by the Bank of Japan, caution regarding foreign exchange intervention by Japanese and US authorities, and concerns over fiscal deterioration due to US debt exceeding $40 trillion.

A bullish factor is that a weaker yen tends to boost the earnings of export companies. A bearish factor is that a weaker yen pushes up import prices, increasing the burden on households. There is also a risk of a sudden appreciation of the yen due to caution regarding foreign exchange intervention. Read more Read more

China and Asian Markets

The Shanghai Composite Index was up 0.05% at 3,813.79, and the Hong Kong Hang Seng Index was up 1.79% at 24,211.35. The Shanghai Composite is down 0.74% for the week, 3.07% for the month, and 4.34% year-to-date. The Hang Seng is up 1.00% for the week, but down 4.21% for the month and 5.86% year-to-date.

Regarding high-tech companies in South Korea and Taiwan, Samsung Electronics indicated on October 8 that its operating profit for the July-September quarter is expected to increase by 783% compared to the same period last year. TSMC also announced that its revenue for the July-September quarter reached a record high. However, the stock prices of both companies fell. This shows that even with strong performance, the higher the expectations, the more likely it is to result in ‘sell the news.’ Read more

Crude Oil, Gold, and Crypto Assets

Crude Oil

WTI crude oil was $91.66 (+0.19%), and Brent crude oil was $104.42 (-0.29%). The settlement price for Brent was reported as $104.72 in an analysis article at 5:57 on October 10, which differs from the value obtained. Please check the latest values via official exchange announcements.

There are multiple factors. In the Middle East, attacks on tankers in the Persian Gulf continue, and concerns remain regarding the safety of the Strait of Hormuz. Additionally, Hurricane Isaias halted some crude oil production in the Gulf of Mexico. According to an analysis article on October 9, the conflict between the US and Iran is in its 224th day. It is also reported that President Trump has announced an agreement with Russia to increase the supply of diesel.

Regarding inventories, the US Energy Information Administration (EIA) crude oil inventory report will be released on October 16 at 1:00. The previous figure was -3.186 million barrels. The OPEC Monthly Report will be released on October 13 at 19:00, and the IEA Monthly Report on October 14 at 18:00.

Bullish factors (for those hoping for a decline in crude oil) include the temporary easing of tensions due to President Trump’s remarks. Bearish factors include reports of attack plans and ongoing supply disruptions caused by the hurricane. Read more

Gold

Gold futures were $4,191.0 (+1.43%). This is an old value as of 13:58 on October 9. Reports at 20:04 on October 9 indicated that physical gold was up 1.1% at $4,179.42 per ounce. Because gold does not generate interest, rising interest rates make it less attractive compared to interest-bearing assets like bonds. Furthermore, a strong dollar makes dollar-denominated gold more expensive for holders of other currencies. However, tensions in the Middle East support buying as a safe-haven asset. Read more

Crypto Assets

Bitcoin was $82,920 (+0.30%) and Ethereum was $2,497.03 (-0.21%). An analysis article at 5:37 on October 10 points out that Bitcoin is being traded as a “macro risk asset” influenced by movements in crude oil and US Treasury yields. When crude oil fell due to President Trump’s remarks regarding an attack on Iran, Bitcoin recovered to $82,000. Also, since it rose +42% in the July-September quarter, some expectations may have already been priced in. A phase of tightening financial conditions due to Fed rate hikes is a headwind for risk assets.

Terminology: Risk premium is the additional return that investors demand over the yield of a safe asset in order to hold a risky asset. Read more

Three Future Scenarios

Bullish Scenario

This occurs if the US CPI falls below market expectations, major bank earnings are strong, and the situation in the Middle East stabilizes. If crude oil falls and US long-term interest rates decline, the weight on stock valuations (a measure of whether stock prices are expensive or cheap relative to earnings, etc.) will lighten. Tech stocks and small-to-mid-cap stocks are considered relatively likely to receive a tailwind. Gold and Bitcoin are also more likely to be supported by lower interest rates and a weaker dollar. Conversely, the dollar and oil-related stocks are more likely to face headwinds. Indicators to check are US CPI (October 14, 21:30), retail sales, the US 10-year Treasury yield, and crude oil prices.

Neutral Scenario

This occurs if inflation indicators are in line with market expectations, earnings are mixed, and the situation in the Middle East remains stagnant. Stock prices are likely to fluctuate within a range near their highs. The trend of diverging performance between large-cap stocks with solid earnings and small-to-mid-cap stocks sensitive to interest rates will continue. Sectors less affected by the economy or companies with high earnings certainty are relatively more likely to be chosen. Real estate and small-to-mid-cap stocks, which are sensitive to borrowing costs, will remain under pressure. Indicators to check are major bank earnings, remarks by Fed officials (Governor Waller on October 13, Fed Chair Warsh on October 16), and FedWatch rate hike probabilities.

Bearish Scenario

This occurs if the US CPI exceeds market expectations or the situation in the Middle East worsens, causing crude oil to rise again. If rate hike expectations strengthen and the US 10-year Treasury yield rises above the 5.3645% seen on October 7, the perception that stocks are overvalued will be heightened. If concerns about AI-related financing and monetization overlap, the correction in tech stocks could deepen. The dollar and US Treasury yields are likely to rise, and energy-related stocks will be relatively stronger. This is a phase likely to be a headwind for interest-rate-sensitive tech stocks, small-to-mid-cap stocks, gold, and crypto assets. Indicators to check are US CPI, crude oil prices, the 30-year Treasury yield, the VIX index, and reports on AI-related company financing.

Key Indicators

Main Schedule for October 12–October 16 (Japan Standard Time)

October 13, 16:45: Remarks by Fed Governor Waller
October 13, 19:00: OPEC Monthly Report
October 13 (Before US market open): Earnings for major US banks and others. JPMorgan (EPS forecast $5.93, revenue forecast $51.23 billion), Goldman Sachs (EPS forecast $13.09, revenue forecast $16.86 billion), Citigroup (EPS forecast $2.65, revenue forecast $23.72 billion), Wells Fargo (EPS forecast $1.84, revenue forecast $22.31 billion)
October 13, 23:00: US Existing Home Sales (September) Previous: 3.98 million, MoM: -2.0%
October 14, 18:00: IEA Monthly Report
October 14, 18:40: Speech by Fed Governor Bowman
October 14, 21:30: US Consumer Price Index (September) Previous: MoM +0.4%, YoY +3.4%, Core Index MoM +0.3%
October 14 (Before US market open): Morgan Stanley (EPS forecast $2.94), Bank of America (EPS forecast $1.10), BlackRock (EPS forecast $14.3)
October 15, 5:30: API Weekly Crude Oil Inventories Previous: -2.09 million barrels
October 15, 13:30: Japan Industrial Production (August) Forecast: -1.7%, Previous: -1.7%
October 15, 21:30: US Retail Sales (September) Previous: +1.2%, Core Retail Sales Previous: +1.4%
October 15, 21:30: US Producer Price Index (September) Previous: MoM +0.4%, Core Index Previous: +0.2%
October 15, 21:30: Philadelphia Fed Manufacturing Index (October) Previous: 37.8
October 15, 21:30: NY Empire State Manufacturing Index (October) Previous: 7.6
October 15, 21:30: US Initial Jobless Claims Previous: 197,000
October 16, 0:30: Atlanta Fed GDPNow (Q3) Forecast: 3.6%, Previous: 3.6%
October 16, 1:00: EIA Crude Oil Inventories Previous: -3.186 million barrels
October 16, 12:30: Speech by Fed Chair Warsh
October 16, 21:30: US Import Price Index (September) Previous: +0.7%

Items to continue monitoring

Yields on US 10-year and 30-year Treasury bonds and auction demand
FedWatch December rate hike probability and the October 27-28 FOMC meeting
Brent crude oil, the Strait of Hormuz, and US-Iran relations
Opinion polls and policy statements ahead of the midterm elections (November 3)
Dollar/Yen and vigilance against foreign exchange intervention by Japanese and US authorities
Yield spreads between French and German government bonds, and the Euro/Dollar
Reports on fundraising and monetization of AI-related companies

Summary

On October 9, the market ended with US stocks rebounding despite headwinds from US long-term interest rates, which are at their highest level in about 24 years, and rising oil prices. The S&P 500 was about 0.1% below its record closing high, the Nasdaq Composite was up 0.64%, and the NY Dow was up 0.83%. The support came from the strength of corporate earnings. Estimates for profit growth for the July-September quarter vary by report, with some citing about 25% and others about 30%, but both represent high growth.

Bullish factors include, first, the strength of corporate earnings. Second, oil prices stabilized on October 9 following President Trump’s remarks regarding an attack on Iran, and demand for the 30-year bond auction was strong. Furthermore, Fed Governor Waller touched on the possibility of a pause, which slightly eased expectations for interest rate hikes. Historical data also suggests that stock prices tend to rise in the October-December period during midterm election years.

Bearish factors include the weight of inflation and interest rates. The University of Michigan Consumer Sentiment Index is at 46.3, near an all-time low. Expected inflation rates are rising. The Fed raised rates in September, and the minutes also indicated further rate hikes. In the AI sector, doubts about OpenAI’s revenue and the massive fundraising by Broadcom and SpaceX reflect both expectations and burdens. Small-cap stocks are lagging, and investment capital is also flowing into bonds and money market funds. In Europe, France’s fiscal problems and political risks are weighing on the bond market.

These factors are moving while canceling each other out. Next week, the US CPI, major bank earnings, and remarks by Fed officials will determine the direction of interest rates and stock prices. It is important to take a stance of comprehensively confirming multiple materials rather than relying on a single one.

About the sources

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This article was compiled and edited using AI. AI may make errors in numbers, dates, news summaries, translations, or the organization of causal relationships. When using this information for investment decisions, please verify the latest data through official statistics, central banks, government agencies, and multiple news outlets. In particular, oil prices and pre-market stock prices fluctuate significantly during the day, and there may be discrepancies between the stated figures and actual trading prices.

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