MARKET WRAPS
STOCKS: Stocks slid after a September consumer inflation gauge spurred fears of imminent rate hikes.
TREASURYS: Treasury yields were mixed after inflation data, with the yield on the two-year note gaining due to rate-hike expectations.
FOREX: The U.S. dollar rose against rivals after the consumer inflation data.
COMMODITIES: Oil futures rose after more Iranian attacks on shipping.
HEADLINES
Broad Pickup in Prices Lifted Inflation to 3.7% in September
Inflation picked up in September, a sign that high energy prices are
tightening their squeeze on consumers ahead of next month's midterm
elections.
Consumer prices were up 3.7% in September from a year earlier, the
Labor Department said Wednesday, hotter than August's gain of 3.4%.
Fed's Beige Book Shows Price Pressures May Be Intensifying
U.S. economic activity grew at a slight to moderate pace across most
Federal Reserve districts in recent weeks while price pressures grew in
some districts, according to the Fed's beige book report.
The Fed's beige book, which gathers anecdotal information about
current economic conditions across the 12 Federal Reserve districts,
comes before the committee's October meeting on interest rates. Some Fed
officials have signaled leaving rates unchanged this month, before
Wednesday's firm consumer-price index report.
Manufacturing showed some signs of strength, while growth in other
sectors lagged. Broad-based growth in manufacturing led the moderate
growth reported in the Dallas district, the report said. Meanwhile,
another six districts reported modest to moderate growth from their
manufacturing firms. The remaining five districts noted little or no
manufacturing growth.
Wall Street Worries Bank of America's Problems Will Linger
Investors dumped shares of Bank of America after a steep regulatory
penalty caught Wall Street off guard and its third-quarter earnings
missed forecasts, putting the second-largest bank on pace for a bruising
day.
Bank of America sought to reassure the street on a call with analysts
to discuss results released early Wednesday, hours after the Treasury
Department slapped the bank with a $1.2 billion fine tied to what
officials called insufficient systems to monitor and report possible
financial crimes.
The third-quarter results came in short of Wall Street expectations,
even with the regulatory fine excluded.
Two Cargo Ships Sink Near Strait of Hormuz, as Iranian Attacks Increase
Two Emirati cargo ships have sunk in the past 24 hours after being
struck in the Strait of Hormuz, an escalation with little precedent as
Iran ramps up attacks to levels not seen since the war started.
The GFS Pride and the Cape Dao have both gone down, said Pakistan's
National Hydrographic Office, which monitors maritime activities in
Middle Eastern waters. Maritime-security companies confirmed the two
losses Wednesday and said this was the first such incident in months.
The sinkings came as the U.S. military has been successfully
shepherding more Gulf oil through the strait while bottling up Iranian
oil exports with a naval blockade and sanctions. Iran has repeatedly
ramped up attacks over the course of the war to try to disrupt the U.S.
operation, but it is rare that its attacks result in ships being sunk.
OpenAI Computing Chief to Depart
OpenAI's head of computing capacity is leaving the company next month
after about a year, the latest leadership change at a unit driving
hundreds of billions of dollars of investment in the coming years.
Sachin Katti joined OpenAI in late 2025 to rein in its ambitious
Stargate data center effort, which got off to a slow start after the
company failed to reach a deal with SoftBank and Oracle. Instead, OpenAI
forged deals with the firms separately, and Katti struck additional
computing agreements with providers such as Amazon Web Services to shore
up OpenAI's capacity.
Katti also worked to revive OpenAI's plans to lease its own data
centers, rather than rent capacity from other providers. In August he
helped lock in a 10-gigawatt data center lease with SB Energy that came
with a financial guarantee from Nvidia.
Netflix Eliminates About 1,000 Jobs in Biggest Cuts Since 2022
Netflix is cutting 6% of its staff, or roughly 1,000 positions
globally, its biggest round of layoffs since 2022, as it struggles with
slowing growth and customer engagement.
Co-Chief Executives Greg Peters and Ted Sarandos said in an email to
employees Wednesday morning that the bulk of the cuts would be in the
streaming giant's product, tech, legal and human-resources teams.
"Our mission-to entertain the world-is ambitious, and delivering on it
requires us to be disciplined about where we prioritize our people and
resources," they told employees.
Fed's Bowman Says Inflation Above Goal, But No Urgency to Act
BANGKOK-There is room to assess economic developments before taking
further monetary policy action, said Michelle Bowman, the Federal
Reserve's vice chair of supervision.
Speaking at the IIF Annual Membership Summit in Bangkok, Bowman
briefly touched on her macroeconomic outlook before delving into her
approach to financial regulation.
"Inflation remains above our goal," she said Wednesday, but added that
she doesn't feel a sense of urgency to act in the wake of the last rate
hike.
Berkshire Hathaway Builds 4% Stake in Bending Spoons
Shares of Bending Spoons took flight Wednesday on news that Berkshire
Hathaway has built a 4% stake in the serial acquirer of
digital-subscription and software companies.
Bending Spoons, based in Milan, said Berkshire made a fresh investment
of $330 million after plowing $600 million into its initial public
offering in July.
Shares shot up 38% to $52.36 in late morning trading Wednesday even
though Berkshire's latest investment came at a steep discount.
American Electric Power to Invest $4 Billion in Fuel Cell Project to Meet
Energy Demand From Google
American Electric Power plans to invest about $4 billion in a Wyoming
fuel cell generation project to meet growing energy demand from
Alphabet's Google.
AEP said Wednesday Google will acquire power from Cheyenne Fuel Cell,
which is about 92% owned and controlled by AEP, under a 20-year power
purchase agreement.
The facility aims to support Google's increasing energy needs in the
greater Cheyenne, Wyo. area, AEP said. The facility would use fuel cell
technology developed by Bloom Energy that is designed to be deployed
rapidly and provide reliable, on-demand power.
TALKING POINT Merrill Lynch's Fee-Based Advisory Assets Just Hit a Record $1.9 Trillion Bank of America's wealth management business had a strong third quarter that saw solid increases in revenue, profit, and client accounts.
The Global Wealth and Investment Management division, which includes Merrill Lynch and the Bank of America Private Bank, posted record revenue of $7.1 billion for the quarter, up 13% from the same period a year ago. The unit reported $4.5 billion in asset-management fees, an increase of 16% year over year.
Merrill and the private bank reported third-quarter net income of $1.5 billion, up 22% from a year ago.
The wealth division's financials were buoyed by rising market valuations, strong asset inflows in the quarter, and higher net interest income. Merrill and the private bank saw $20 billion of asset inflows during the quarter, which was down from $23.5 billion during the year-earlier quarter but up from $13.7 billion in the second quarter of 2026.
The wealth unit added about 5,000 net new accounts belonging to households with $500,000 or more in invested assets. Merrill ended the quarter with $4.2 trillion in client assets, up 9% from a year ago, including a record $1.9 trillion held in fee-based advisory accounts.
Merrill also saw double-digit percentage increases in relationships with new clients in the $1 million-plus and $10 million-plus ranges, according to Lindsay Hans, president and co-head of Merrill Wealth Management. She notes that many of Merrill's clients have relationships with advisors and maintain separate accounts with Merrill's self-directed platform, Merrill Edge. "This notion of hybrid relationships is increasingly important, and we have the platform to serve them," Hans told reporters on a conference call.
The results come amid a third-quarter earnings report for Bank of America that was tainted by a $1.2 billion fine regulators levied on the company relating to anti-money-laundering violations. Bank of America says that the penalty lowered its earnings per share for the quarter by 17 cents. Even without the fine, however, the country's second-largest lender would have posted EPS of just under the analyst consensus forecast of $1.10. As it turned out, Bank of America reported third-quarter earnings of 91 cents per share.
--Kenneth Corbin, Barron's
Expected Major Events for Thursday 04:30/JPN: Aug Revised Industrial Production
04:30/JPN: Aug Revised Retail Sales
06:00/UK: Aug Index of production
06:00/UK: Aug UK trade
06:00/UK: Aug Index of services
06:00/UK: Aug Monthly GDP estimates
06:45/FRA: Sep CPI
10:00/FRA: Aug OECD Harmonised Unemployment Rates
10:00/FRA: 2Q OECD Quarterly Labour Market Situation
11:30/UK: Sep NIESR Monthly GDP Tracker
12:30/CAN: Aug Wholesale trade
12:30/US: Oct Empire State Manufacturing Survey
12:30/CAN: Aug Monthly Survey of Manufacturing
12:30/CAN: Aug New motor vehicle sales
12:30/US: Sep PPI
12:30/US: Sep Advance Monthly Sales for Retail & Food Services
12:30/US: Oct Philadelphia Fed Business Outlook Survey
12:30/US: 10/10 Unemployment Insurance Weekly Claims Report - Initial Claims
13:00/RUS: Weekly International Reserves
14:00/US: Aug Manufacturing & Trade: Inventories & Sales
14:30/US: 10/09 EIA Weekly Natural Gas Storage Report
16:00/US: 10/09 EIA Weekly Petroleum Status Report
18:00/US: Sep Monthly Treasury Statement of Receipts and Outlays of the U.S. Government
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:01/UK: Sep Scottish Retail Sales Monitor
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Expected Earnings for Thursday Alcoa Corp (AA) is expected to report $1.80 for 3Q.
Ames National Corp $(ATLO)$ is expected to report $0.68 for 3Q.
BV Financial Inc (BVFL) is expected to report for 3Q.
BancFirst Corp $(BANF)$ is expected to report $1.94 for 3Q.
Bank of New York Mellon Corp (BNY) is expected to report $2.27 for 3Q.
Bank7 Corp (BSVN,GMAR.XX) is expected to report $0.88 for 3Q.
Charles Schwab Corp $(SCHW)$ is expected to report $1.62 for 3Q.
Cohen & Steers Inc (CNS) is expected to report $0.88 for 3Q.
Commercial Metals Co (CMC) is expected to report $1.84 for 4Q.
Delcath Systems Inc (DCTH) is expected to report $-0.09 for 3Q.
First Horizon Corp $(FHN)$ is expected to report $0.52 for 3Q.
Hingham Institution for Savings $(HIFS)$ is expected to report for 3Q.
Independent Bank Corp $(INDB)$ is expected to report $1.83 for 3Q.
Interactive Brokers Group Inc $(IBKR)$ is expected to report $0.67 for 3Q.
JB Hunt Transport Services Inc $(JBHT)$ is expected to report $1.89 for 3Q.
ManpowerGroup (MAN) is expected to report $0.94 for 3Q.
Marsh & McLennan Cos $(MRSH)$ is expected to report $1.70 for 3Q.
PNC Financial Services Group Inc (PNC) is expected to report $4.91 for 3Q.
Prologis Inc $(PLD)$ is expected to report $0.75 for 3Q.
REalloys Inc $(ALOY)$ is expected to report for 3Q.
Simmons First National Corp - Class A (SFNC) is expected to report $0.55 for 3Q.
US Bancorp $(USB)$ is expected to report $1.32 for 3Q.
WaFd Inc $(WAFD)$ is expected to report $0.84 for 4Q.
Westamerica Bancorp $(WABC)$ is expected to report $1.17 for 3Q.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
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