In the coming week, investors will focus on the US September inflation data (CPI/PPI) and the flurry of policy statements from Federal Reserve officials to assess the likelihood of maintaining high interest rates and subsequent gradual rate hikes. This could alter the short-term direction of US stocks, bonds, and commodities. Major US stock indices are expected to maintain a high-level consolidation pattern. The key focus will be on whether the Nasdaq continues to be supported by core sectors such as AI technology and computing power semiconductors. The earnings expectations of heavyweight leaders and interest rate trends will be crucial anchors for market movements. Next Wednesday and Thursday will see a concentrated release of key US inflation and consumption data, which are primary targets for Wall Street. Combined with speeches from several current and incoming FOMC voting members, this will cross-validate the true state of US inflation and the labor market, further clarifying the Fed's subsequent policy path. The Fed is currently maintaining high interest rates, but several officials have released hawkish signals to address the stubborn high inflation driven by both supply and demand and tariffs. A senior chief investment officer at a Wall Street institution stated, "When you calmly examine the current market focus, the Fed and interest rates are undoubtedly paramount. Inflation data and hawkish/dovey statements from officials corroborate each other, accurately reflecting changes in the Fed's decision-making approach and serving as the core basis for market pricing in the fourth quarter."

The problems in the bond market—and the problems beneath the surface?

Despite multiple risks, particularly the persistently high yields on long-term US Treasury bonds, US stocks have demonstrated structural resilience. Investors continue to raise risk premiums, demanding higher bond returns, leading to a continuation of the trend of high-level stabilization and increased volatility in the bond market. This week, the 10-year US Treasury yield remained firmly above its high level, supported by both the US's high deficit financing and large-scale capital investment in the AI industry, further strengthening the logic of a rising long-term interest rate center. A report by the chief market strategist of a leading Wall Street investment bank stated that "given the performance of the fixed-income market over the past few months, a temporary rise in yields and a rapid market correction are not impossible. Concerns about fiscal sustainability and structural capital needs have fundamentally altered the operating logic of long-term interest rates. The continued divergence among stock market sectors has raised concerns about structural risks in the overall market. The S&P 500, supported by AI-weighted leaders, has generally trended upward this month, maintaining a steady year-to-date gain. However, significant divergence exists within the index, with most of the 11 industry sectors showing mixed performance, while traditional cyclical and consumer sectors have faced considerable pressure. The S&P 500 equal-weighted index, considered a bellwether for individual stock performance, has underperformed the weighted index, highlighting the characteristic of heavyweight stocks driving the market. This month, AI computing power, memory chips, and smart home technologies led the market, becoming the absolute core themes. Next week, Apple will hold a smart home product launch event, coupled with the anticipated performance of AI companies, continuing to boost sentiment in the growth sector."

Core inflation data is about to be released, revising the core logic of the US economy.

Surveys indicate that the market generally expects US CPI and PPI to remain high year-on-year in September, with the pace of inflation decline slowing significantly. St. Louis Fed President Musalaim explicitly stated that "current US inflation is not a short-term disturbance, but rather a result of demand pressures coupled with persistent supply shocks." He added that the US economic fundamentals are solid, and the labor market is generally balanced and stable, eliminating the need to suppress employment to cool inflation, although there is a risk of weakening consumer spending in the future. The high US CPI in August, significantly exceeding the Fed's 2% inflation target, reinforced market expectations that the Fed would maintain high interest rates and that further rate hikes were highly likely. The Fed's recent cautiously hawkish signals suggest that the window for policy easing has not yet opened given the persistent inflation. Current federal funds futures indicate an over 80% probability that the Fed will maintain interest rates at its next policy meeting, but the probability of further rate hikes later this year continues to rise. Several macro analysts stated that "the market will be satisfied with moderately cooling inflation data, but if inflation data continues to exceed expectations and shows resilience, it could easily trigger a short-term correction in US stocks and a rise in US Treasury yields, further solidifying the rationale for the Federal Reserve to tighten monetary policy." The high-interest-rate environment continues to put multiple pressures on the stock market: not only increasing corporate financing costs and suppressing the resilience of economic recovery, but also intensifying competition for funds between stocks and bonds through rising US Treasury yields. It is worth noting that the latest research report from the New York Fed on October 8th corroborates the rigidity of inflation. The tariff policies implemented in early 2025-2026 have cumulatively raised the inflation of 67 categories of daily consumer goods by 2.9 percentage points, with two-thirds being the direct impact of tariffs and the remainder being indirectly transmitted through the supply chain, meaning that there is significant downward resistance to inflation in the short term. Currently, the overall financial environment is relatively loose, with only minor pressure on localized credit, continuing to support US economic expansion, but the risk of unsustainable fiscal debt has already been fully priced in by the market. The principle of separating monetary policy from fiscal debt management also provides the Federal Reserve with room to independently tighten policy and combat inflation. Meanwhile, market expectations for long-term inflation remain stable, with no doubt about the Federal Reserve's credibility in controlling inflation, thus preserving room for the Fed to flexibly adjust its policies. Next week's daily key points will be summarized below.

Monday (October 12): Domestic monetary and financial data released, observing the pace of liquidity and credit expansion.

On Monday, the market's core focus will be on China's key financial data for September, including three core indicators: the annualized rate of M2 money supply, the year-to-date total social financing, and new RMB loans. This data will directly reflect the strength of domestic monetary liquidity and the pace of credit expansion in the real economy, impacting overall sentiment in domestic equities and commodities. It will also provide a reference for the global macroeconomic liquidity environment, offsetting external pressures from high overseas interest rates.

Tuesday (October 13): Multiple events in energy, central banks, and technology resonate.

Tuesday brings a multitude of key cross-market events. On the data front, attention will be focused on Germany's final September CPI annual rate and the US September existing home sales annualized total, observing the resilience of Eurozone inflation and the health of the US housing market. On the policy front, there's a dense schedule of events: Cleveland Fed President Hamack, a 2026 FOMC voting member, and Fed Governor Waller will both speak, releasing their latest monetary policy stances, likely maintaining a hawkish position and emphasizing the necessity of further rate hikes; the Reserve Bank of Australia will release the minutes of its September monetary policy meeting, interpreting the RBA's policy logic; in the energy market, OPEC will release its monthly oil market report, adjusting global oil supply and demand forecasts; in the technology sector, Apple will hold a smart home product launch, driving the AI smart home sub-sector and connecting with the current AI industry trend.

Wednesday (October 14): A super day for global inflation data, with a flurry of statements from top Federal Reserve officials.

This week's key data release window includes: domestically, the release of September's CPI and PPI year-on-year rates to observe the pace of domestic inflation recovery; and internationally, the release of the US September unadjusted CPI year-on-year rate, the most crucial macroeconomic data of the week, which will directly correct market pricing of the level of US inflation and the Fed's policy path. In the energy sector, the IEA releases its monthly oil market report, providing a two-way verification of supply and demand with the OPEC report. At the central bank level, ECB President Lagarde delivers a keynote speech focusing on Europe's digital economy; 2028 FOMC voting members Boston Fed President Collins and Fed Governor Bowman speak, releasing multiple policy signals from the Fed and cross-validating judgments on inflation and employment policies.

Thursday (October 15): US consumption and production data + G20 summit

On the data front, the focus is on China's total electricity consumption in September, reflecting domestic industrial production and economic activity. The US released its September PPI year-on-year rate and retail sales month-on-month rate, comprehensively linking production and consumption-side inflation and economic data to verify whether the US economy possesses the resilience for a "soft landing." On the event front, the G20 Finance Ministers and Central Bank Governors meeting was held, bringing together major global economies for intensive discussions on monetary policy, fiscal policy, and trade cooperation frameworks, influencing global macroeconomic risk appetite and capital flows.

Friday (October 16): Eurozone final inflation readings + Fed top leadership statement to conclude the week's trading.

Friday's market close will focus on the final reading of the Eurozone's September harmonized CPI (unadjusted), which will solidify the Eurozone's inflation situation and influence expectations for the European Central Bank's policy. At the central bank level, Cleveland Fed President Hammark will speak again, further reinforcing policy expectations. The final highlight will be Fed Chairman Warsh's attendance at the IMF annual meetings in Bangkok, where he will hold a fireside chat with the IMF Managing Director, releasing the Fed's top-level policy thinking and global economic outlook, thus pricing in the week's interest rate and inflation logic.

This Week's Key Summary and Market Outlook

Overall, the core market focus next week will remain on the resilience of US inflation and the continuation of the Fed's high interest rates. CPI and PPI data will revise previous inflation assessments, while a series of speeches by Fed officials will set the tone for fourth-quarter policy. Coupled with capital expenditures in the AI industry and long-term interest rate support from the US fiscal deficit, the logic of a prolonged period of high interest rates is difficult to reverse, continuing to suppress US stock valuations. In the short term, the market will exhibit characteristics of "data determining direction, speeches determining pace, and AI and energy determining structure." Higher-than-expected inflation and hawkish statements from officials will drive up US Treasury yields and cause US stock market volatility, while a marginal easing of inflation may bring a phase of recovery opportunities for growth stocks.