Week · Market review
Week: prices squeeze shoppers as chip sales grow
On 14 October, US price data showed a decline in the purchasing power of pay; on 15 October, TSMC reported a much larger profit. Over 9–15 October, a gap emerged between households buying more expensive fuel and businesses supplying technology expansion. The week’s question remains whether higher revenue can offset more expensive fuel and borrowing.
Period covered: 2026-10-09 – 2026-10-15Information as of 10 min read
US annual inflation rose from 3.4% to 3.7%. New ASML and TSMC results showed growing revenue in the semiconductor industry.
The Federal Reserve’s September target range of 3.75–4.00% remains in force. Its next decision is scheduled for 28 October.
Week
What happened
9 October: consumer sentiment and company resilience
Earlier context: the Federal Reserve’s September meeting minutes, published on 7 October, recalled the possibility of another rate increase. This described an earlier meeting, not a new decision during this weekly window.
The University of Michigan’s preliminary 9 October survey showed US consumer sentiment falling from September’s 48.1 to 46.3. Current conditions fell from 50.9 to 44.7, but expectations rose from 46.3 to 47.3. The university highlighted expensive goods and borrowing that made large purchases harder. Median expected inflation for the coming year rose from 4.6% to 4.7%.
? Consumer surveys: what do they show?
The survey measures attitudes, not actual spending or a central-bank forecast. The median is the middle response: half expect no higher inflation and half no lower inflation; October’s figures are preliminary.
On 9 October, Destatis reported 2,373 German business insolvency cases in July, 8.0% more than a year earlier. From January to July, transport and storage recorded 85.5 cases per 10,000 businesses, versus 42.8 across the economy. However, creditors’ claims over those seven months fell from 31.8 to 21.9 billion euros: more economically significant businesses had failed a year earlier.
? Insolvency frequency: what does it measure?
It counts cases registered by courts per 10,000 businesses, not the default probability of one bond. Cases enter the statistics after the first court decision, often after about three months; creditors’ claims are not realised losses, and businesses closing for other reasons are excluded.
9–13 October: fuel, interest-rate and technology costs persisted
On 9 October, the US Treasury’s Office of Foreign Assets Control issued General License 135. Under the specified US rules it permits transactions involving the sale, delivery, offloading and import of Russian-origin diesel, including US imports, until 7 April 2027 at 00:01 Eastern Daylight Time (EDT). It does not permit debits from accounts of Russia’s central bank, National Wealth Fund or Finance Ministry at US financial institutions. This does not remove all sanctions: the licence neither changes other countries’ rules nor sets a delivery volume or schedule.
On 11 October, the International Energy Agency identified renewed attacks on Saudi civilian and energy infrastructure and asked countries to consider an additional diesel-stock release. No new quantity had been agreed. On 7 October, countries had already agreed to accelerate the uncompleted remainder of March’s stock programme, prioritising diesel; that was an earlier commitment, not an additional quantity.
On 12 October, Cleveland Federal Reserve President Beth Hammack said demand-restraining interest rates were still needed to bring inflation down. She highlighted energy, tariff-related import costs and demand for artificial-intelligence equipment that was raising the price of components used elsewhere. This was her personal assessment, not a Federal Reserve decision.
The Reserve Bank of Australia’s minutes published on 13 October explained the unanimous 0.25 percentage-point rate rise to 4.60% at its 28–29 September meeting. The bank discussed energy disruptions, constrained production capacity and artificial-intelligence equipment costs. Strong profits and resilient borrowers and banks were, for now, counterweights to rising technology debt and optimistic profit expectations. The minutes were not a new rate rise on 13 October.
The Bank of Japan’s preliminary September Corporate Goods Price Index, published on 13 October, showed annual growth of 6.8% after August’s 7.6%, and a 0.3% monthly decline. Import prices fell 0.2% from August in yen but rose 1.0% in contract currencies. Petroleum, coal and natural gas became 2.3% more expensive in contract currencies and contributed 0.69 percentage point to overall import-price growth.
? Japanese price indices: why does currency matter?
The producer index measures goods traded between businesses, not consumer prices or all production costs. Converting imports into yen changes the comparison; annual and monthly changes have different bases, and preliminary figures may be revised.
On 12 October, chip designer NVIDIA and networking supplier Cisco presented a plan for denser optical connections. Against 200-gigabit-per-second-per-lane modules, their design envisages four times the bandwidth density and about 1.3 times the energy efficiency. NVIDIA also contributed some rack and computing-module designs to the open-standards community. Processor designer AMD presented the open Helion rack design for AI agents that execute tasks; it planned November 2026 availability for equipment still being developed with partners.
? Equipment efficiency: what is the comparison’s limit?
A gigabit is one billion bits. The vendors’ comparison describes particular connections, not a whole data centre’s electricity bill or profit; an open design and planned availability are not realised sales revenue.
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13 October: a better growth forecast and higher energy costs
On 13 October, the International Monetary Fund raised its 2026 global real-growth forecast from July’s 3.0% to 3.1%. Its 3.4% assessment for next year was unchanged. This is projected economic activity, not an achieved full-year result or an investment return. Technology investment supports demand, while energy-importing countries face higher costs.
That day, Germany’s statistical office confirmed September annual consumer-price inflation of 3.3%, after August’s 2.9%. Growth excluding food and energy remained 2.4%, while energy prices were 14.9% higher than a year earlier. The fuel-tax reduction from 1 October was not yet reflected in September’s measurement. These are German figures, not a reading for the entire euro area.
On 13 October, US bank JPMorganChase reported 6% higher third-quarter net profit. Net interest income rose 13% and operating expenses 12%, while provisions for credit losses fell from roughly 3.4 to 2.7 billion US dollars. One bank does not describe the entire sector: profit depends on expenses and provision estimates as well as demand for loans.
US shoppers have less purchasing power for other spending
On 14 October, the US Bureau of Labor Statistics reported that September consumer prices were 3.7% higher than a year earlier. Annual growth had been 3.4% in August. Excluding food and energy, the increase also accelerated, from 2.4% to 2.6%.
? Consumer Price Index: what does it measure?
The Consumer Price Index measures changes in the price of an average basket of goods and services. The annual comparison with the same month a year earlier is not seasonally adjusted, while the monthly changes quoted here are adjusted. Excluding food and energy helps examine other prices but does not describe a household’s entire bill.
Petrol delivered the largest monthly shock. It became 9.1% more expensive in September and accounted for more than half of the overall monthly price increase. The full basket rose 0.6% from August, while monthly growth excluding food and energy remained 0.3%. Annual inflation therefore accelerated even though monthly growth in the basket excluding food and energy did not accelerate.
Pay figures published the same day showed the practical consequence. Average hourly earnings in US private nonfarm jobs rose 0.1% in September, but their purchasing power fell 0.5% after adjusting for prices. That can constrain discretionary spending: a larger share of pay is needed for the same fuel and everyday expenses.
? Purchasing power of pay: whose change is measured?
This is the change in average hourly earnings adjusted for consumer prices; the monthly figures are seasonally adjusted. It is not every individual’s pay, and the August and September earnings estimates remain preliminary.
Oil supply recovers while fuel constraints remain
On 14 October, the International Energy Agency estimated that global oil supply rose by 2.5 million barrels a day in September to 102.3 million. That was roughly 2.5% more than in August. Delivering crude and turning it into the required fuel are different steps, however, and diesel supply remains constrained.
The agency also forecasts lower oil demand for 2026 as a whole. That is not solely good news for buyers: consumption can also decline because households and businesses cut spending. Transport companies and agriculture need diesel to reach them on time, while oil producers also depend on the volume they can sell.
The chip industry grows, but not every profit measure improves
On 15 October, Taiwan’s TSMC, which manufactures chips designed by other companies, reported its third-quarter results. Revenue in Taiwan dollars rose 50.9% year on year and net profit increased 68.7%. In US dollars, TSMC’s sales grew 41.2%: translating into another currency changes the reported growth rate.
TSMC’s gross profit margin nevertheless fell from 67.7% in the second quarter to 66.4% in the third. Rapid sales growth does not automatically mean that each dollar of revenue produces more gross profit. The margin was 59.5% a year earlier, so the annual and quarterly comparisons tell different stories.
? Gross profit margin: what does it show?
It is the share of revenue left after the cost of producing the goods sold. It excludes some operating expenses, taxes and investment, so it is not a measure of net profit or available cash.
On 14 October, Dutch chipmaking-equipment supplier ASML reported quarterly sales of 11.66 billion euros, around 55% higher than a year earlier. Sales of both equipment and chips point to strong demand across this industry. However, ASML’s 4.96 billion euros of net profit included about 0.51 billion euros of gains on an equity investment; the entire increase cannot be attributed to equipment sales.
Week
What matters now
More expensive fuel first reduces the amount households can spend elsewhere. That creates risks for discretionary retailers and consumer lenders. Everyday-goods businesses may prove more resilient, but they too must judge how much of their higher delivery costs customers will accept. Today’s retail-sales release will help test whether the squeeze is already visible in sales.
The bond market did not move in a single direction after the US price release. On 14 October, the reference 2-year US Treasury yield rose from the previous day’s 4.79% to 4.82%, while the 10-year yield fell from 5.21% to 5.19%. Persistent inflation makes rate cuts harder, but longer-dated bonds also depend on expectations for future growth.
? Bond yield: is it a realised return?
The US Treasury measure is derived from indicative bond quotations and expressed as an annualised yield. It is not a fund’s daily return; these data establish the movement but do not identify its cause on their own.
Technology investment provides a counterweight to weaker household purchasing power. Chip and equipment suppliers receive orders, but their customers need costly equipment to generate enough money later. Chipmaker shares and the bonds of companies financing data centres are therefore different exposures. Growing revenue creates an opportunity; the main risk arises when expansion and debt increase faster than cash generated by operations.
This week’s German insolvency figures and US bank profit also show uneven conditions. Creditors of transport firms need to assess each borrower’s ability to pay, while a large bank’s profit also changes with provisions. Neither the number of cases nor one bank’s result measures losses across the entire credit market.
Week
What comes next
15 October, 15:30 Lithuanian time: US September retail sales and producer prices. The former will show the value of sales; the latter will test whether price pressure is also visible among producers. Any sales increase must be assessed alongside inflation, as sales dollars are not the quantity of goods sold.
16 October, 15:30: US September import and export prices. They will help assess how much cost pressure is coming through international trade.
27–28 October: the Federal Reserve meeting. The question is whether faster inflation outweighs the risk of weaker demand and requires another change in interest rates.
Important. This is general market analysis, not a personal recommendation to buy or sell. Historical data and company results do not guarantee future returns. Forecasts and conditional scenarios may not materialise.
How is the history preserved and updated?
All five periods in this edition share one information date. Week means the latest 7 days, quarter means 90 days, and year means the trailing 12 months. The next dated edition will have a separate URL. This text keeps its date and assessment; later events are not silently inserted into an older edition. Longer periods assess new evidence alongside earlier developments without repeating every headline.
