Saturday, October 10

Markets rebounded as President Donald Trump said the United States would not attack Iran before November’s midterm elections; reports of Russian diesel supplies also eased near-term supply concerns. U.S. stocks rose broadly, with European and Hong Kong equities higher too, reversing some of the prior session’s technology-led sell-off. Oil held around $104 for Brent, keeping the conflict’s potential effect on energy costs in view.

The relief is tactical, not a resolution of the macro risk. At the IMF and World Bank meetings in Bangkok, the fund was expected to address the war’s effects on energy and food prices; its research links sharp price spikes to higher inflation expectations, poverty and financial instability. The IMF maintained its 3% global growth forecast for 2026 while warning that public debt could exceed 100% of global GDP before 2030. Less immediate escalation supports risk appetite, but elevated prices and debt leave policymakers with little room for complacency.

The preliminary October University of Michigan survey showed consumer sentiment falling to 46.3, its lowest reading in five months, even as one-year inflation expectations rose to 4.7% and five-year expectations to 3.5%. That combination matters more than either figure alone: households feel worse while expecting price pressures to persist.

There was no major central-bank decision, but the data sharpen the policy tension ahead of the Fed’s October 27–28 meeting. Elevated energy prices and long-term yields constrain the case for easing, while deteriorating sentiment argues against treating demand as uniformly resilient. The survey does not settle the Fed’s path, but it underscores why weaker confidence may not translate into quick relief on rates if inflation expectations keep rising.

Fresh doubts about AI monetization met a concrete sign of intensifying hardware competition. A report put OpenAI’s annualized revenue near $50 billion, below earlier estimates of $70 billion, reviving questions about whether revenue can catch up with the infrastructure spending underpinning the sector. The concern reaches beyond one company: slower monetization would make lofty expectations for AI-linked investment harder to defend.

China’s CXMT said its fifth-generation DRAM platform had entered mass production, adding a new competitive challenge for Samsung Electronics, SK Hynix and Micron. Separately, Tencent was considering an offshore bond offering of up to $5 billion as it expands AI activity. Together, the developments put both sides of the trade in focus: the returns on AI spending and the supply competition among companies building the underlying technology.