Mixed Bank Tidings, Chip Pressure, CPI in Focus
Published as of: October 13, 2026, 9:17 a.m. ET
(Tuesday market open) Major indexes started mixed on the unofficial first day of earnings season as big banks deposited results. In a sign of recent financial industry struggles, the usually reliable JPMorgan Chase (JPM) missed expectations, while Wells Fargo (WFC) offered mixed results. Meanwhile, tech came back under pressure after another tough day in South Korea's markets. Closer to home, bond yields and oil slid, possibly offering support.
Checking the bigger earnings picture, this may be one of those quarters where a simple earnings beat and raised guidance aren't enough to please market participants. The key, especially for tech stocks, could be AI adoption and more clarity on how companies can expand margin as prices rise for memory chips. Last quarter saw some mega-cap firms report solid cloud growth. A repeat would likely reinforce ideas that they're succeeding in efforts to monetize AI.
Market action was bifurcated Monday with bond trading closed for the holiday. The Nasdaq fell on pressure from chips while the S&P 500 stayed flat. Beyond earnings, investors brace for tomorrow's 8:30 a.m. ET September Consumer Price Index (CPI) and Thursday's Producer Price Index (PPI). Consensus is for year-over-year headline CPI to rise 3.7%, while core CPI—which excludes more volatile food and energy prices—is seen hitting 2.5%. "CPI and PPI are key to whether rate hike odds shift," said Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research (SCFR).
Three things to watch
- Big bank earnings deeper dive: There were several reasons some of today's bank results disappointed, though the industry looks healthy overall judging from their releases. With JPMorgan Chase it was an 8% quarter-over-quarter investment banking fee drop. Those fees were up 14% from a year earlier, and the company reported "strong levels of client activity." Nevertheless, a quarterly drop reinforces ideas that the strong start to the year for initial public offerings (IPO) across the banking industry flagged in the third quarter. This came as some prominent firms postponed IPOs, possibly due to tighter financial conditions as yields rose. There were things to like in JPMorgan's results, including average loans up 10% year over year and a 6% rise in net interest income (the difference between what a lender earns on loans and pays out on deposits). Wells Fargo saw net interest income rise 5%, evidence that banks can profit in a rising rate environment and that high yields haven't yet hurt the loan business. Both banks cited solid consumer and business trends and posted solid loan growth.
- Breadth shows life, but still weak: Eight of 11 S&P 500 sectors rose Monday, extending the broadening theme. About 36% of S&P 500 stocks traded above their 50-day moving average, up from a six-month recent low of 20%. "Breadth continues to be weak but has improved slightly over the past few trading sessions," Sonders said. Through last Wednesday, only 17% of S&P 500 stocks had outperformed the index itself over the trailing one-month span; as of yesterday’s close, that had jumped to 26%. There's also a record percentage of S&P 500 stocks with negative beta on a day-to-day basis, meaning they move the opposite direction of the index. This highlights how narrow the recent rally to record highs has been. Generally, it's healthier when a rising tide lifts most boats. Right now, the major indexes rely heavily on strength from mega-caps like Micron (MU) and Nvidia (NVDA), and those may have to remain in pole position for more new index highs.
- Mortgage rates squeeze housing market: Data on existing home sales for September is due at 10 a.m. ET. The market expects a downbeat number, according to Briefing.com. Mortgage rates hit a three-year high last week, with implications for consumer spending and economic growth. After seven straight weekly increases, the average rate on Freddie Mac's 30-year fixed-rate mortgages hit 7.4% on Thursday, the highest since November 2023. The rate, which is closely tied to surging 10-year Treasury yields, stood just below 6% in late February. The current higher rate would add about $376 a month to a $400,000, 30-year fixed-rate mortgage compared to the February rate. Against this backdrop, home sales fell 2.5% in September from a year earlier, according to the Zillow September market report. Mortgage applications are down about 50% since February, according to the Mortgage Bankers Association. It could be interesting to hear what executives from regional banks, which tend to be more exposed to the mortgage market than the large Wall Street firms, say about consumer lending trends, including mortgage demand.
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On the move
- JPMorgan Chase rose almost 1% early despite earnings coming in light. Earnings per share of $5.57 were short of the $5.90 consensus, while revenue of $50.91 billion missed consensus of $51.22 billion.
- Wells Fargo dropped 1% in early action. Revenue of $21.87 billion was up 2% year over year but short of $22.31 billion consensus. It was the third time in four quarters Wells Fargo has missed revenue consensus, MarketWatch noted.
- Goldman Sachs (GS) jumped more than 4% early after reporting a strong quarter with earnings of $17.01 per share powering past consensus of $12.86. Revenues rose 23% annually, driven by global banking and markets, though that business suffered a sequential loss.
- Citigroup (C) fell 1.2% in early trading even though earnings of $2.85 per share and revenue of $23.85 billion both topped consensus. Revenue rose 8% year over year, driven by growth in services, wealth, and markets and banking. Equities trading had a strong quarter.
- Chip stocks, especially memory chips, came back under pressure this morning with sharp losses for Western Digital (WDC), SK Hynix (SKHY), Seagate (STX), and Sandisk (SNDK). Micron (MU) also fell almost 4%. This followed another drop in the tech-heavy South Korean market amid growing concerns about chip competition from China.
- UnitedHealth (UNH) rose 2.5% after earnings and revenue beat forecasts and the company hiked guidance, citing margin improvements and operating cash flow.
- Johnson & Johnson (JNJ) dropped more than 2% despite earnings that beat estimates and in-line revenue. The health giant also raised its outlook.
- Albertsons (ACI) dropped 2.5% despite earnings and revenue surpassing expectations. Investors appeared disappointed that sales at stores open a year or more fell 0.8% annually and gross margin slipped.
- Treasury yields dropped today after Fed Governor Christopher Waller said higher yields are curbing demand in interest-rate sensitive sectors, Bloomberg reported. That implies yields are doing some of the Fed's job for it.
- Meta Platforms (META) climbed more than 3% Monday as the company launched its Muse Wonder AI model family, which it said has "frontier-level performance."
- Chipotle (CMG) fell 4% Monday after Starbucks (SBUX) said it wouldn't be buying the company despite recent rumors.
More insights from Schwab
Jobs checkup: With CPI and PPI tomorrow and Thursday, respectively, investors might want to watch for any sign of rising wage pressures or labor-related costs. If they begin heating up, it could complicate the Fed's job of cooling inflation. Learn more about the current jobs picture in Schwab's newest article on markets and the economy.
Drilling down into bank earnings: Learn more about the challenges major banks face as earnings season begins in our bank earnings preview. Sharply rising Treasury yields and the Fed's first interest rate hike in three years could weigh on loan demand, and a slowing IPO market could impact investment banking revenue.
Inflation preview: With inflation expectations high, there's even more focus on tomorrow's CPI report, especially the core figure to see if energy price increases have fed through to the rest of the economy. Get more insight from Kevin Gordon, head of macro research and strategy at SCFR, in his Week Ahead video.
Employee stock primer: Company stock can be a powerful wealth-building tool, but it can also create unexpected risks. In his latest Financial Decoder podcast, Schwab's Mark Riepe discusses important decisions that come with equity compensation and how it can fit into financial plans.
Rising rates and the global equity market: How do rising rates globally affect equities? They don't always mean lower stock prices, but could impact market leadership. Learn more in Schwab's latest look at international investing.
Chart of the day
Data source: Federal Reserve Economic Data (FRED), Federal Reserve Bank of St. Louis. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The bond market credit spreads (BAMLH0A0HYM2:FRED—candlesticks) are a measure of risk tolerance for bond investors and are often used as an indicator to identify market tops. Credit spreads are the difference, or "spread," between high-yield bond yields and Treasury yields. High yield bonds are risky assets while Treasuries are considered safer assets. The difference in the yields signals whether investors are open to risk or if they’re risk averse. Credit spreads and the CBOE Market Volatility Index (VIX—purple line) commonly move in sync. Options traders might read the recent credit spread surge as a potential signal that the VIX could follow suit.
The week ahead
October 14: Expected earnings from ASML (ASML), Bank of America (BAC), Morgan Stanley (MS), BlackRock (BLK), Progressive (PGR), Fastenal (FAST), and State Street Corporation (STT), and September Consumer Price Index (CPI) and core CPI, and the Fed Beige Book.
October 15: Expected earnings from Taiwan Semiconductor Manufacturing (TSM), PNC Financial Services (PNC), U.S. Bancorp (USB), and September retail sales, September Producer Price Index (PPI) and core PPI, and initial jobless claims.
October 16: Expected earnings from Travelers (TRV) and Truist (TFC), and industrial production for September.
October 19: Expected earnings from Fifth Third (FITB).
October 20: Expected earnings from GE Aerospace (CE), RTX (RTX), 3M (MMM), General Motors (GM), Northrop Grumman (NOC), Halliburton (HAL), Netflix (NFLX), Intuitive Surgical (ISRG), Chubb (CB), Capital One (COF), and United Airlines (UAL), and September housing starts and building permits.
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