Producer Prices Jumped | Bonds Rallied Anyway | AI Selling Moved to Hardware | A Hike Bet Spiked and Faded

Wholesale prices ran hot on Thursday, and the bond market rallied anyway.

The S&P 500 rose 0.3% to about 7,744, and the Dow gained 1.1%. The Nasdaq Composite edged up 0.1% after falling 1.4% in the morning. The Russell 2000 rose 1.4%. The 10-year Treasury yield fell about 9 basis points to 5.10%. Gold rose about 2% to near $4,200, and bitcoin traded near $82,300.

U.S. crude rose about 3% to near $98 as government data showed an 8.6 million-barrel drop in stockpiles. Bitcoin briefly fell below $80,000 after the price report, then climbed back as Treasury yields dropped.

Prices ran hot. Yields went the other way.

Producer prices posted their biggest jump in four and a half years, and yields still fell.

The producer price index rose 1.3% in September, the most since March 2022 and more than twice what economists expected. It was up 6.3% from a year earlier. Energy drove most of the jump in goods prices, but wholesalers and truckers raised their prices too. Energy rose 10.8% and made up more than 80% of the goods increase. Trade margins rose 1.4%, and transportation and warehousing prices rose 3.4%.

Retail sales rose 0.8%, well above forecasts, but outside autos and gasoline they rose only 0.2%. Consumer prices rose 0.6% in September, led by gasoline, while core goods prices rose 0.3%. After inflation, spending outside autos and fuel was likely flat to slightly lower. The 10-year yield had dipped overnight and fell again after the report. Fed Chairman Kevin Warsh speaks late Thursday, New York time, at an IMF event in Bangkok. The Fed meets Oct. 27 and 28.

Hot Pipeline, Soft Shoppers

Producers are raising prices faster than shoppers are buying more. Bonds rallied on a hot report, and no single cause explains it. That leaves the Fed weighing hot input costs against soft demand.

The AI selloff moved from the companies that borrow to build to the companies that supply the equipment.

CoreWeave fell to a 52-week low of $59.51 in the morning, then rallied to near $70, up about 6%. Corporate bond funds gained along with Treasuries, a sign the stress in AI debt had not spread. Dell (DELL) fell about 7%, after an 11% slide on Wednesday when Barclays downgraded it. Barclays argued the company's enterprise revenue reflects memory costs more than AI adoption. Vertiv (VRT), which sells power and cooling gear to data centers, fell about 4%.

GTCR and Elliott agreed to buy CCC Intelligent Solutions for $7.75 a share in cash. The enterprise value is about $6.1 billion. Two big banks are providing committed financing, and the deal has no financing condition. The 44% premium is measured from July. The price is about 1.4% above Wednesday's close.

Credit Calm, Hardware Hit

Bond funds rose and CoreWeave bounced, so the debt worry stayed narrow on Thursday. The selling moved to equipment makers whose sales depend on the buildout continuing. Banks still committed to finance a large software buyout. If corporate bond funds keep pace with Treasuries, the stress stays contained. If they start to lag, the strain is spreading.

All four financial firms that reported beat on adjusted earnings per share, and the stocks still split.

Charles Schwab (SCHW) posted record revenue of $7.17 billion, up 17%, in line with or below forecasts depending on the estimate. It also gathered a record $190.4 billion from clients, and the stock still fell. The shares lost about 2.7%.

U.S. Bancorp (USB) now expects 2026 revenue growth of 8% to 9%, up from 5% to 7%, and its shares rose about 2%. BNY (BNY) beat on revenue and earnings and rose about 3%. PNC (PNC) beat on adjusted earnings. But PNC's unrealized losses, mostly on securities, grew by $2.4 billion in the quarter to $6.5 billion. Its shares were roughly flat.

Beats, Then Balance Sheets

Investors sorted the banks on outlook and on balance sheets. PNC's losses widened while long-term yields climbed in the quarter. Thursday's bond rally runs the other way for those holdings. Lower rates could also cut what Schwab earns on client cash over time.

The day's hottest data moved the Fed bet for only a few minutes.

Kalshi's October rate-hike contract jumped to 37 cents two minutes after the producer-price report. Within about 10 minutes, it was back below 30 cents. It traded near 28 cents late in the day.

Three Brazilian polls in a day put the Oct. 25 runoff within the margin of error. Polymarket's contract on a Flávio Bolsonaro win fell from 82.7 cents early Thursday to about 77 cents by early afternoon. Nearly half of that drop came in an hour with no new poll. It traded near 77 cents late in the day. Datafolha releases a new survey Thursday evening.

Quick Spike, Slow Drift

The Fed contract repriced within minutes of the data and then reversed. A 28-cent price implies about a 28% chance under the contract's rules. The Brazil contract is drifting toward the polls, but not always when the polls come out. Neither price is evidence of the outcome.

Authorities in two countries drew new lines around event contracts this week.

The SEC approved Cboe options that pay out on a single number a company reports. Cboe Global Markets (CBOE) has not started trading them. A Taiwan court ordered access to Kalshi and a big crypto exchange cut off, Bloomberg reported. The exchange is Coinbase (COIN), which offers Kalshi contracts to its users.

Same Bet, Different Rulebooks

In Washington, a securities regulator opened a new path for yes-or-no contracts. In Taiwan, a court treated election contracts as gambling, no matter who regulates them at home. Where a contract can trade, and for whom, is now part of the risk of offering it.

Producer prices posted their biggest jump since 2022, and bonds rallied anyway.

Stocks recovered a morning drop, led by the Dow and small caps. The AI selloff moved from borrowers to equipment makers. A Fed contract spiked on the data and gave it back within minutes.

Capital moves early. Coverage catches up. The gap between the two is worth watching.