The S&P 500 closed above 7,800 for the first time Tuesday, Oct. 6, then spent the rest of the week contending with Treasury yields at 24-year highs and a report questioning the revenue behind the artificial intelligence buildout.
Minutes of the Federal Reserve's September meeting, released Oct. 7, showed most officials expect another rate increase by year-end.
Yet, Fed Gov. Christopher Waller said Thursday in Istanbul, Turkey, delivering a speech at an economic forum there, that there is flexibility on timing.
"The hikes do not need to come at consecutive meetings, but they should be in place in an acceptable period of time," he said.
CME FedWatch, a dashboard produced from analyzing trading data, put the odds of a hike at the Oct. 27-28 meeting
near 18%, about where they stood a week ago, with a December move priced at 69%.
Bond yields climbed anyway.
The 10-year Treasury yield touched 5.36% midweek, its highest level in 24 years, and the 30-year reached 5.73% midweek, also its highest since 2002. By Friday, the 10-year stood near 5.27% and the 2-year near 4.81%.
Artificial intelligence reality check
On Thursday, the Financial Times reported that OpenAI's annualized revenue was about $20 billion below what the company had previously signaled.
The Philadelphia Semiconductor Index fell 3.4% and Micron Technology Inc. lost 4.8%.
Cost of fuel shows up on bottom lines
Fuel costs hit corporate earnings on Friday. Delta Air Lines Inc. reported adjusted earnings of $1.72 a share, below the analysts’ roughly $1.81 consensus, and cut its full-year forecast to $5.10-$5.60 a share from $6.50-$7.50.
Its fuel bill rose 62% to $4.14 billion. Consumers have noticed.
Consumer gloom?
University of Michigan's preliminary consumer sentiment index fell to 46.3 in October from 48.1, the second-worst print in seven decades of records and below economist expectations of 47.6.
The gauge of current conditions dropped to 44.7 from 50.9, the worst reading ever recorded by the survey.
"Frustration over cost-of-living continues to mount," survey Director Joanne Hsu said. Year-ahead inflation expectations rose to 4.7% from 4.6% and long-run expectations to 3.5% from 3.4%, both the highest since May.
Better week for Detroit brands
Detroit's automakers fared better. General Motors Co. was on track for a gain of about 5%, its best week since late July, and Ford Motor Co. was set to snap a four-week losing streak.
Next week brings big bank earnings on Oct. 13 and September consumer inflation on Oct. 14.
Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: How an S&P 500 high, then some reality checks hit markets this week
