After the release of the US September Consumer Price Index (CPI), the three major US stock index futures collectively turned lower on Wednesday, as most inflation indicators came in above market expectations, heightening investor concerns about inflation persistence and the Federal Reserve's subsequent interest rate policy.
As of 8:35 AM Eastern Time (8:35 PM Beijing Time), S&P 500 futures fell 0.3%, Nasdaq 100 futures dropped 0.6%, and Dow Jones futures declined 0.1%. Meanwhile, third-quarter earnings reports from major Wall Street banks were released one after another, with weak bond trading businesses and some banks' profits falling short of expectations further weighing on market sentiment.
Stock futures turn lower after CPI release, energy prices drive inflation pressure
Following the release of the US September CPI data, stock index futures swung from gains to losses, reflecting market concerns about inflation pressure and the future path of monetary policy. Previously, the market had expected that the US September headline CPI year-over-year increase would rise from 3.4% in August to 3.6%, with the month-over-month increase expanding from 0.4% to 0.6%. For core CPI, the market expected the year-over-year increase to edge up from 2.4% to 2.5%, while the month-over-month increase would slow from 0.3% to 0.2%.
Rising energy prices were an important backdrop to this round of accelerated headline inflation. Affected by the expanding Middle East conflict, international energy markets continued to come under pressure, and rising fuel costs could further pass through to goods and services prices. Deutsche Bank had previously projected that due to the notable increase in energy prices in September, that month's inflation report could come in strong. Inflation data firm Truflation also pointed out that the gap between headline and core inflation is widening, while US trade policy could intensify upward pressure on goods prices.
The key question currently on the market's mind is whether the energy-driven short-term price increases will further spread to other consumer sectors, thereby squeezing the Fed's room to adjust interest rates.
JPMorgan, Goldman Sachs bond trading revenue weak; Citigroup shares fall 5.6%
In addition to the inflation data, third-quarter earnings from major Wall Street banks also became a market focus. JPMorgan (NYSE: JPM) reported an unexpected decline in fixed income trading revenue, dragging its share price lower; Goldman Sachs (NYSE: GS) also saw bond trading revenue fall short of analyst expectations. Citigroup (NYSE: C) performed even worse, with its shares dropping 5.6%, making it the worst performer among KBW Bank Index components. Bank of America (NYSE: BAC) reported a decline in third-quarter profit, mainly due to a $1.2 billion provision. That provision was related to penalties imposed by US regulators over the bank's failure to detect potential illegal activity, dragging its pre-market share price lower.
In contrast, BlackRock (NYSE: BLK) benefited from growth in client asset management fee revenue, with third-quarter profit rising and its shares climbing in pre-market trading. Morgan Stanley (NYSE: MS) also reported third-quarter earnings growth, mainly supported by strong equity trading revenue driven by market volatility, though its shares still edged lower in pre-market trading.
Market analysis firm Vital Knowledge believes that the overall earnings from major banks are not broadly weak, with most results largely in line with expectations, and the main weakness concentrated in fixed income trading businesses. However, investors are beginning to worry that the current operating environment may be approaching the peak of this earnings cycle for the banking sector.
AI company financing and valuation concerns persist; market watches OpenAI and Anthropic financial conditions
The financing model and valuation issues of the artificial intelligence industry are also weighing on the recent US stock market. In the previous trading session, major US stock indices closed lower, partly because investors continued to focus on the financial conditions of frontier AI companies such as OpenAI and Anthropic. Vital Knowledge pointed out that the real market concern is not the practical application value of AI technology or the growth in demand for model usage, but whether OpenAI and Anthropic can complete listings according to the timeline and valuations expected by investors.
In recent years, the AI industry has seen a large number of infrastructure investment projects reliant on debt financing, raising investor concerns about the sustainability of capital expenditure. By comparison, some large cloud computing and technology companies have performed relatively strongly. Analysts believe these companies are better positioned to use operating cash flow generated by existing businesses to support AI investment, and therefore face relatively less financing pressure.
According to reports, Anthropic plans to disclose its third-quarter financial results for the first time later on Wednesday, and the market will use this to further assess the revenue growth and financing needs of frontier AI companies.
ASML raises full-year revenue guidance, AI chip equipment demand remains strong
Despite market concerns about the financing outlook for AI companies, the semiconductor manufacturing equipment sector continues to show strong real demand. Dutch semiconductor equipment maker ASML (NASDAQ: ASML) once again raised its full-year revenue forecast and said AI-related investment continues to drive demand growth for advanced chip manufacturing equipment. Company management noted that some customers have already begun planning equipment procurement for 2030, and existing capacity arrangements are finding it difficult to fully meet expected demand for 2027 and 2028.
ASML shares rose more than 1% during European trading hours, contrasting with the weak performance of some financial stocks and US stock index futures. This market divergence reflects that investors are differentiating between business models within the AI supply chain: companies with existing profitability, actual equipment orders, and operating cash flow support face different valuation and funding pressures compared with frontier AI model developers that still need continuous financing to expand business scale.
Overall, the US September CPI data has reinforced market attention on inflation and the interest rate path, while divergent bank earnings performance and AI company financing risks are further affecting investor sentiment. Subsequent market trends will depend on whether inflation pressure can ease, how the Fed responds to the latest data, and whether large companies can support current valuations through earnings growth.
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