US Equities

TSMC reported third-quarter revenue of US$46.72 billion, above its own July guidance, and guided fourth-quarter revenue to $52.3-54.3 billion while keeping capital spending at $60-64 billion. On the earnings call it raised its 2026 U.S.-dollar sales growth outlook to 44%.

Why it matters here: Rising leading-edge foundry output points to continued shipments for the U.S. AI chip designers that dominate the semiconductor fund and the technology benchmark, supporting their earnings estimates.

Counterpoint: The VanEck Semiconductor ETF still fell 10% this week; the market is pricing the risk that 2027 orders slow if AI buyers' funding tightens, which current results cannot rule out.

The Census Bureau reported September retail and food services sales of $745.0 billion, up 0.8% from August and 6.3% from a year earlier, with August's gain revised up to 1.3% from 1.1%.

Why it matters here: Resilient spending supports revenue for consumer-discretionary and other domestically focused companies, partly offsetting the drag from higher rates on the equal-weight and small-cap indexes.

Counterpoint: Gasoline prices rose 9.1% in September, so much of the nominal gain reflects fuel costs rather than volumes.

The Federal Reserve reported that industrial production rose 0.7% in September after a revised 0.1% in August, and capacity utilization rose to 76.9% from 76.4%.

Why it matters here: Higher capacity use supports pricing power and operating leverage for the companies in the industrial sector fund and the small-cap index.

Counterpoint: Most of the gain came from weather-sensitive utilities output, up 3.5%, while manufacturing rose only 0.3%.

A U.S. Treasury delegation raised market access for Mastercard, Citigroup and Visa in at least two meetings with Chinese officials in Bangkok, an official told CNBC, after China approved Visa on 13 October to prepare a wholly owned card-clearing business.

Why it matters here: Access to China's card-clearing market would be a long-term growth source for the payment networks and banks in the financial sector fund.

Counterpoint: The report rests on one anonymous official with no readout or timetable, and near-term revenue would be small in a payments market dominated by local players.

CoreWeave's five-year credit default swap spread briefly rose above 1,140 basis points and its 9.75% 2031 bond yielded 15.78%; the shares fell nearly 12% on Friday and about 25% for the week. CNBC reports growing concern that technology companies are borrowing too heavily to fund AI infrastructure, and Oracle's five-year CDS was quoted at 282 basis points.

Why it matters here: If AI-infrastructure buyers face higher borrowing costs, orders for chips and cloud capacity could slow, and those orders are the earnings engine of the technology and semiconductor funds.

Counterpoint: Most AI capital spending is funded by investment-grade hyperscalers with large free cash flow rather than by leveraged neoclouds, and contagion is not yet visible in benchmark credit spreads.

Micron fell 3.62% on 13 October after China's CXMT claimed progress on a new memory architecture and said it plans a server product by the end of 2026. HSBC estimates CXMT's DRAM share at about 10%, up from about 4%, and Anhui's party chief pledged to expand the province's chip industry.

Why it matters here: Expectations of more Chinese memory supply erode the pricing premium U.S. memory names have earned during the AI boom, weighing on the semiconductor fund.

Counterpoint: CXMT's claims have not been independently verified, U.S. export controls limit its access to leading-edge tools, and high-bandwidth memory for AI, where Micron competes, is a segment where CXMT is not yet a factor.

Brent settled at $109.86 and WTI at $101.41 on Friday as attacks on Gulf shipping continued, and U.S. diesel averaged $6.33 a gallon, more than 70% above a year ago.

Why it matters here: Sustained crude above $100 raises fuel and input costs, squeezes real consumer incomes and keeps the Fed leaning hawkish, a hit to both earnings and multiples for the consumer-discretionary and broad equity funds.

Counterpoint: Energy rose 2.1% on Friday, leading the S&P 500's sectors, and the U.S. is a net petroleum exporter, so the domestic economy is better insulated than importers.

The S&P 500 fell 1.09% to 7,659.44 on Friday and the Nasdaq Composite 2.14% to 26,140.03, both closing below their 50-day moving averages, while the Dow lost 0.34%. The VanEck Semiconductor ETF fell 10% for the week and the VIX rose above 22 for the first time in four months; CNBC reports the 20 most valuable AI and chip stocks lost more than $1 trillion of value over the week.

Why it matters here: The market is lowering the multiple it pays for AI-exposed growth, and with the 10-year yield above 5% investors are less willing to fund long-duration earnings, so the cap-weighted technology and semiconductor funds bear the most pressure.

Counterpoint: Sector moves were split, with energy up 2.1% and utilities up 1.2%, which looks more like rotation out of AI leaders than broad liquidation, and TSMC's record quarter suggests AI demand itself is intact.

Headline CPI rose 0.6% in September and 3.7% from a year earlier, against 3.6% expected, with energy up 20.4% on the year and gasoline up 9.1% on the month. Core CPI rose 0.3% on the month and 2.6% on the year.

Why it matters here: Rising inflation lifts the expected path of Fed rates and squeezes real incomes, lowering valuation multiples across the large-cap and equal-weight funds and pressuring consumer-facing earnings.

Counterpoint: Core inflation of 2.6% does not point to a wage-price spiral, and September retail sales still rose 0.8%, so consumers are absorbing energy costs so far.

The producer price index for final demand rose 1.3% in September, against a 0.6% consensus and the largest monthly gain since March 2022, and 6.3% on the year. Final-demand goods prices rose 2.6%, energy 10.8% and gasoline 20.3%.

Why it matters here: Input costs running ahead of consumer prices compress margins for companies without pricing power, while also raising the rate outlook from which equity multiples are priced.

Counterpoint: Energy companies in the S&P 500 gain from the same price rise, and nominal sales are strong, with retail sales up 6.3% on the year, so margins may hold up better than the cost data suggest.