The Morning Bull - US Market Morning Update Wednesday, Oct, 14 2026
US stocks look set for a slightly cautious open, with the tone shaped almost entirely by inflation worries. The single driver today is a jump in household inflation expectations that leans the mood toward defensive rather than upbeat.
The latest University of Michigan survey puts year-ahead inflation expectations at 4.7% for October 2026, with the five-year view at 3.5%. Those readings sit above recent CPI consensus of 3.7% year on year for September, which keeps pressure on the policy outlook.
Higher expected inflation usually feeds into higher required yields, which can lift borrowing costs for households and highly leveraged companies. That kind of backdrop tends to weigh most on longer duration growth stories, while cash-generative businesses and pricing power look relatively more resilient.
The unresolved question is whether today’s CPI release confirms the survey signal or contradicts it. If official inflation holds near the 3.4% prior reading instead of the 3.7% consensus, investors face a real test of which signal to trust.
Stocks to Watch Before the Opening Bell
Edison International (EIX)
Edison International is back in focus after reaffirming its 2026 core earnings guidance of US$5.90 to US$6.20 per share. Management also targets annual core earnings growth of 5% to 7% through 2030. Income focused investors are paying attention to the indicated 6.4% dividend yield, while weighing wildfire liability risk, grid upgrade costs, regulation, and funding needs.
ON Semiconductor (ON)
ON Semiconductor is drawing interest following a fresh BUY rating and a US$97 price target that implies 24% upside. The commentary highlights Q2 revenue and non GAAP EPS ahead of estimates and a recent price adjustment that points to firm demand. Management also lifted its 2030 AI data center addressable market view from US$12b to almost US$50b.
Pershing Square (PS)
Pershing Square fell about 12% to 13% after Bank of America cut the stock to Underperform and reduced its price target from US$54 to US$38. Citi recently downgraded the shares as well. Both banks cite concerns about modest earnings growth, weaker portfolio returns, and a delay in launching the PSV fund, which has weighed on sentiment.
Top Movers
- Valero Energy (VLO) jumped 4.69% as investors focused on tight fuel markets and recent headlines regarding U.S. refining capacity.
- HF Sinclair (DINO) climbed 4.33% following renewed attention on U.S. refiners after DPA refinery expansion comments and earlier analyst target increases.
- Oracle (ORCL) advanced 4.23% after a positive reaction to a new hardware security collaboration and continued interest in its AI cloud positioning.
Top Losers
- AST SpaceMobile (ASTS) fell 8.54% after a Piper Sandler downgrade citing satellite launch delays and increased competition from SpaceX.
- BioNTech (BNTX) declined 7.13% after its BNT113 cancer trial did not meet the first primary endpoint on progression-free survival.
- Applied Materials (AMAT) dropped 6.69% as investors reacted to investor day commentary that did not include an industry spending forecast for chip equipment.
On The Radar
Inflation data and a dense run of US earnings over the next few days keep the focus squarely on how quickly pricing pressure feeds through to borrowing costs, bank profits, and consumer spending.
- US CPI and Core CPI, Wed 14 Oct. September CPI is expected at 3.7% year on year with core at 2.5%. A result above those marks would lean toward higher rate expectations and tighter conditions for US credit and growth stocks.
- US PPI, Retail Sales and Jobless Claims, Thu 15 Oct. With August retail sales previously at 1.2% and September consensus at 0.3%, a softer print together with higher than 0.5% PPI would pressure consumer cyclicals while reinforcing margin concerns across the index.
- Fed Chair Warsh Speech, Fri 16 Oct. Any emphasis on the 3.7% CPI consensus and recent 4.7% inflation expectations would influence views on how restrictive policy stays, which matters directly for rate sensitive sectors and the US dollar.
- Bank of America (BAC), Morgan Stanley (MS) and BlackRock (BLK) Q3 results, Wed 14 Oct. Loan growth, trading income and fee revenue will show how higher US yields and weak Michigan sentiment at 46.3 are filtering through to big bank profitability and balance sheet risk appetite.
- Netflix (NFLX) and General Motors (GM) Q3 earnings, Tue 20 Oct. Subscriber trends at Netflix and pricing versus costs at GM will help you gauge how far US households, already facing 4.7% inflation expectations, are still willing to spend on streaming and big ticket purchases.
Sector & Industry Watch
Energy: Fuel tightness keeps cash flows in focus
Energy has produced one of the firmest 7 day moves among major sectors, with Oil and Gas also gaining as crude, diesel and shipping stories stay supportive. News from refiners and shale linked names, plus new contracts and projects around power and compression, underline how closely revenues track fuel margins as well as headline oil prices.
If you own Energy ETFs, what really matters now is whether companies can comfortably fund dividends and drilling at these levels. The cleanest catalyst to watch is today’s US CPI print, since an inflation surprise linked to gasoline would quickly feed into both policy expectations and how investors treat cash rich producers.
Tech: AI spending meets inflation anxiety
Tech still shows strong longer term sector gains but has eased over the last week, with the 7 day return in the red as investors weigh higher US inflation expectations against relentless AI headlines. Microsoft’s data center lease commitments, Workday’s new AI tools and Goldman’s comments on AI’s role in S&P 500 profits all sit beside concern about crowded trades and funding costs.
For portfolios tilted toward large US platforms and software, price moves are now being driven by both bond yields and the pace of AI infrastructure build outs. Today’s US CPI and core CPI release is the swing factor, because a firmer core reading would support higher yields and keep investors more cautious on richly valued Tech exposure.
Semiconductors: Strong year, choppy week for AI chips
Semiconductors still post very strong 1 year and year to date returns, yet the 7 day performance is weak as the sector absorbs talk of an AI bubble and fresh Chinese competition in memory. Headlines around Nvidia, Micron, SK hynix and Marvell, plus US corporates exploring in house accelerators, highlight that enthusiasm for AI hardware now shares space with questions about pricing and capacity.
If you hold chip heavy ETFs or individual stocks, swings are being set as much by comments on AI capex, funding and competitive pressure as by quarterly results. The single macro release that can quickly reset the tone is today’s US CPI, since stickier inflation would point toward higher long term borrowing costs for fabs and data center customers.
Consumer Staples: Everyday spend steadier than confidence
Consumer Staples have delivered a solid 7 day gain and sit in positive territory year to date, even as the Michigan survey shows sentiment at a five month low and inflation expectations at 4.7%. Updates from Walmart and Albertsons, plus sector news in Food, Beverage & Tobacco, suggest households are still prioritising groceries and essentials while trading around brands and channels.
If Staples are your portfolio ballast, focus less on survey gloom and more on whether baskets keep moving through tills. The key data point here is Thursday’s US Retail Sales control group number, which strips out more volatile items and gives a cleaner read on core goods spending that underpins many of these businesses.
Real Estate: Watching CPI and bank funding closely
Real Estate has managed a small 7 day gain after a weaker 30 day stretch, leaving 1 year and year to date returns modestly positive in a clearly rate sensitive space. Stories from REITs and brokers such as BXP, CBRE, JLL and others show that deal flow still depends on stable financing, data center demand and selective office or multifamily projects rather than broad price rises.
If you hold REITs, the real world link is straightforward. Higher inflation expectations feed into Treasury yields, mortgage rates and cap rates, which influence both valuations and refinancing terms. Today’s US CPI combined with big bank earnings over the next 24 hours is the key test, because together they shape both the rate path and banks’ appetite to keep funding new property deals.
Find Stocks Poised To Move
With inflation expectations now sitting at 4.7% for the year ahead, income seekers concerned about borrowing costs can start with this list of 8 dividend fortresses
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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