Quarter · Market review
Technology growth faces a test from rates and investment costs
The rise in US bond yields on 10 November illustrated why growing technology revenue does not automatically support every share price. During these 90 days, several central banks raised interest rates and energy supply recovered unevenly. New TSMC sales confirmed demand, not the investment payback of all its customers.
Period covered: 2026-08-14 – 2026-11-11Information as of 9 min read
Since 9 November, new US prices and TSMC sales have been released: overall monthly price growth slowed, the core increase was unchanged, and chip-manufacturer revenue grew. US bond yields turned upwards.
The US, euro-area and Japanese interest-rate levels increased in September remain in place. Recommendations for tariff relief cannot be treated as lower duties already in force.
Quarter
What happened
August and September brought both technology demand and higher rates
On 26 August, chip designer NVIDIA reported US$96.221 billion of revenue for its quarter ending 26 July, 106% more than a year earlier. Operating profit increased by 124%. These were earlier-quarter results released within this review period. They demonstrated actual equipment demand, but did not establish when the data centres buying that equipment would recover their investment.
Three major central banks raised interest rates in September. On 10 September, the European Central Bank decided to increase its deposit rate from 2.25% to 2.50%, effective on 16 September. On 16 September, the US Federal Reserve raised its target range from 3.50–3.75% to 3.75–4.00%. On 18 September, the Bank of Japan set a 1.25% target, effective on 24 September, replacing the previous 1.00%.
These decisions affect existing and new transactions differently. A business or household taking out a new loan may face higher interest charges, while an older fixed-rate bond becomes less attractive relative to newly offered debt. However, an individual loan’s cost also depends on the bank’s margin and the contract. Central-bank rates are not deposit or borrowing terms available equally to every customer.
? Rate increases: what are 25 basis points?
This means 0.25 percentage point, such as a move from 2.25% to 2.50%. The US figure is an overnight interest-rate target range; the euro-area figure used here is the central bank’s deposit-facility rate.
A trade proposal and delivered energy are different things
On 25–27 September, the US and China published recommendations for more favourable tariff treatment covering roughly US$30 billion of goods in each direction. US exports included agricultural products and medical equipment; Chinese goods for the US market included small appliances and toys. These were recommended lists requiring domestic legal decisions, not confirmed price reductions across all the products concerned.
On 14 October, the International Energy Agency described a fragile recovery in oil supply during September and renewed attacks in the Gulf. Increased crude production is not enough if refining or delivery is disrupted. A transport company needs a particular fuel at an agreed time, so a lower oil quotation on one day does not guarantee a reduction in its actual expenses.
On 15 October, Taiwanese chip manufacturer TSMC reported third-quarter revenue of US$46.72 billion. It forecast US$52.3–54.3 billion for the fourth quarter. This provided a meaningful counterweight to concerns about technology demand, but the second figure remains company guidance. Equipment orders and growth in the revenue of the customers financing them do not necessarily arrive at the same time.
Central-bank decisions diverged in late October
The Federal Reserve retained its September range on 28 October, the European Central Bank left its three rates unchanged on 29 October, and the Bank of Japan maintained its 1.25% target on 30 October. However, the Bank of Canada raised its overnight target from 2.25% to 2.50% on 28 October. Its explanation emphasised the risk of persistently expensive fuel spreading to other goods and services prices.
After raising its target to 4.60% on 29 September, Australia’s central bank increased it again to 4.85% on 3 November. The Bank of England raised Bank Rate from 3.75% to 4.00% on 5 November. Pauses by several central banks therefore did not mark a worldwide move towards cheaper borrowing. For heavily indebted businesses, the financing currency and the next refinancing date remain important.
In early November, risk became visible in equity prices
On 5 November, the US Nasdaq Composite price index fell 5.52%, while the broader S&P 500 lost 4.36%. Nasdaq recovered 1.09% on Friday, but still fell 3.37% between the 30 October and 6 November closes. Japan’s Nikkei 225 lost 9.25% over the same weekly closing-price interval. These weekly changes are not returns for the entire 90-day period.
? Equity-index changes: what is the comparison basis?
US indices are measured in US dollars and the Japanese index in yen; these are price changes excluding dividends. A fund investor’s euro return also depends on exchange rates, fees and the fund’s holdings.
Politics added uncertainty over business expenses. Following the US election on 3 November, Senator Sheldon Whitehouse said on 4 November that Democrats had won control of both chambers of Congress. On 5 November, Senate Democratic leader Chuck Schumer outlined plans to change tariffs and prevent data-centre electricity costs being shifted to households. These were political statements and intentions for a future agenda, not taxes already in force or enacted tariff repeal.
Figures published on 6 November showed that US non-farm employment increased by 165,000 jobs in October and unemployment was 4.1%. Earlier months were also revised upwards. The preliminary third-quarter productivity estimate released on 5 November showed an increase in real output per hour worked. Falling share prices alone therefore did not confirm that the entire economy was already contracting.
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Price releases showed another obstacle. On 5 November, Eurostat reported annual growth of 11.1% in euro-area industrial producer prices for September, or 3.5% excluding energy. On 9 November, China reported annual producer-price growth of 5.7% for October, while consumer prices rose only 0.7%.
? Producer prices: are they companies’ costs?
The measure tracks changes in prices of goods sold by producers, not every company’s costs. The consumer-price basket and weights differ, so the gap between these indices is not a directly calculated reduction in company profits.
On 10 November, US prices left the risk of higher rates intact
The US Bureau of Labor Statistics reported on 10 November that consumer prices rose 0.4% in October from September, after adjustment for normal seasonal patterns. September’s increase had been 0.6%. But prices excluding food and energy rose 0.3% for a third consecutive month. A slower headline increase therefore did not show the same easing across all sources of inflation.
? Monthly inflation: why is this not an annual comparison?
These changes compare the consumer basket with the preceding month after seasonal adjustment. Most October annual comparisons lack an October 2025 index because survey data were not collected then; annual inflation cannot be derived from a single monthly reading.
Federal Reserve governor Christopher Waller spoke that same day, before the price release, saying he leaned towards supporting a 0.25-percentage-point rate increase in December. If the monthly core increase were around 0.3% or higher, he thought a 0.50-percentage-point rise should also be considered. The later reading matched his stated condition, but this remained one official’s position, not a committee decision or a market probability.
The US Treasury’s indicative ten-year yield rose to 4.98% on 10 November from 4.88% on 9 November, reversing the direction of the preceding completed week. The Nasdaq Composite price index fell 0.74% that day. Their timing illustrates the tension between financing costs and equity valuations, but does not establish that the price release alone caused every transaction.
? Yield: is this change a bond fund’s return?
US Treasury indicative yields are calculated from market prices for consistent maturities and expressed as annual percentages. One basis point is 0.01 percentage point. A yield change is not a fund return; other things equal, a higher yield reduces the price of an existing fixed-rate bond.
Chip-manufacturer sales provided a concrete counterweight
Taiwanese chip manufacturer TSMC reported on 10 November that October revenue reached 586.890 billion New Taiwan dollars. This was 14.7% higher than September and 59.7% above October 2025. Actual sales in the new quarter add to the earlier quarterly results, but they are neither monthly profit nor a measure of all its customers’ investment payback.
Japan’s Nikkei 225 closed 1.31% higher on 11 November than in the preceding session. This is a dated Japanese price-index recovery, not a return for all Asian markets or this entire review period. These US and Japanese sessions therefore moved in different directions.
Energy supply improved while October’s average price remained high
On 10 November, the US Energy Information Administration estimated that Middle Eastern oil-production shut-ins averaged about 2.5 million barrels a day in October, against 10.9 million at the May peak. Smaller disruptions are an important counterweight to supply fears. Nevertheless, Brent averaged US$124 a barrel in October, compared with US$114 in September. A monthly average is not today’s quotation and does not reprice every fuel contract at once.
Today Germany confirmed its previously reported inflation slowdown
Germany’s statistics office confirmed on 11 November that annual consumer-price inflation slowed to 2.8% in October, with inflation excluding food and energy at 2.1%. These were final figures confirming the earlier preliminary estimate, not an unexpected revision of that earlier estimate. Fuel-tax relief effective from 1 October helped reduce fuel expenses; its effect cannot automatically be extrapolated to every future month or the entire euro area.
Quarter
What matters now
In technology funds, company names are only part of the exposure
A fund holding NVIDIA or TSMC carries some of the business risk of chip suppliers. Data-centre developers’ shares or bonds also depend on electricity costs, borrowing and equipment replacement. Several funds may hold different companies while depending on the same customers’ investment budgets. Different fund names therefore do not, by themselves, reduce shared exposure to technology demand.
The opportunity would come from orders turning into cash remaining after investment, not simply into reported revenue. Risk is greater where equipment must be replaced continually with borrowed money. A political intention to redistribute electricity-network costs does not yet allow a precise profit impact to be calculated; that requires enacted provisions, an effective date and the company’s contracts.
Bond protection depends on what drives inflation
The renewed yield increase shows why long-dated bonds do not always protect against falling shares. If inflation and the risk of higher rates drive concern, both asset classes can lose value together. Shorter maturities generally mean smaller price swings, not the elimination of credit or currency risk.
Restored production does not benefit every business equally
Smaller production disruptions could help transport and energy-intensive manufacturers if fuel is actually delivered more cheaply. Lower selling prices work in the opposite direction for oil producers, though greater sales volumes may help. Contracts, inventories and delivery routes matter to both sides, not just a general production recovery.
Quarter
What comes next
13–18 November: can demand and profit offset price pressure?
US October producer prices and the next estimate of euro-area third-quarter economic growth are due on 13 November. They add different pieces: the first measures businesses’ selling prices, the second economic output. A more favourable portfolio combination would be easing price pressure without a sharp weakening of demand; one indicator cannot establish both.
NVIDIA’s results are scheduled for late on 17 November Lithuanian time, followed by its discussion at 00:00 on 18 November. The issue is whether revenue and profitability justify the scale of technology investment. The Fed’s October minutes, due at 21:00 on 18 November, will reveal the rate assessment made then, before the latest inflation figures.
8–10 December: the decision comes before the next price check
The Fed meets on 8–9 December. The question is whether the committee changes the current 3.75–4.00% range, not whether it implements an increase already agreed. On 10 December, TSMC’s November revenue and US November consumer prices will test the persistence of two central forces in this period. The US price release will follow, rather than precede, the rate decision.
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.
