Mid-Morning Look: October 14, 2026

Mid-Morning Look

Wednesday, October 14, 2026

U.S. stocks reversed overnight strength, down on the morning after the September consumer price index (CPI) came in hotter than expected as Headline CPI was up 3.7% on an annual basis, and the ex-food and energy core rate was up 2.6%, both above consensus and prior month readings. The data sent bond yield jumping as the shorter term 2-yr yield hit highest level since Sept 29, last up 12 basis points at 4.92% as odds of a Federal Reserve rate hike later this month are increasing. Technology (XLK) is the 2^nd best performer on 2026, up 35% YTD (behind Energy XLE +50%), but it is the only sector so far in October that is down in the S&P (-0.9%) with Energy (XLE) up 9% in 2 weeks and Consumer Staples (XLP) and Utilities (XLU) both up over 5%. Semiconductor chip stocks (SOX, SMH) are on track for a sixth consecutive fall—their worst run since May 2025 as the rotation away from tech continues. A big event for the AI sector later today is the Private Investor Day/Pre-IPO Meeting for Anthropic, holding a closed-door meeting today with selected institutional investors at its San Francisco headquarters. It is expected to cover updated Q3 financials ahead of a possible IPO – could be a boost or bust for AI space today. Financials are the session’s epicenter again after Bank of America tumbles 8.2% on a Q3 revenue miss and $1.2B regulatory settlement charge, with State Street and Morgan Stanley also fall post results, while Progressive slides on its quarterly print; XLF is the second-worst sector on the day.

• MBA Mortgage Applications index fell -2.7% to 199.2 in the Oct 9 week, as the purchase index fell -4.0% to 139.3 and the refinance index fell -0.4% to 513.5; the average 30-year mortgage rate rose 1 basis point to 7.50%, its highest level since November 2023.

• Neoclouds and data center names extend yearly declines in sharp downturn this year, with NBIS, CRWV, IREN, HUT, WULF, CIFR all falling notably as higher yields impacting borrowing as well as continued regulatory concerns ahead of midterm elections. Power and industrial names have also seen recent declines in names like CAT, ETN, GEV and others.
• HVAC sector: Goldman Sachs upgraded TT from Neutral to Buy, while downgraded shares of LII and CARR to Neutral from Buy. Goldman said they sees upside to 2027/2028 EPS for TT as it believes organic growth is likely to meaningfully accelerate on the back of orders >+20% for three consecutive quarters and a robust backlog going into next year. The firm downgraded LII as Resi HVAC expectations for next year appear too high given the demand weakness it is experiencing in Resi new construction and for CARR, they see risk to incremental margins next year given negative mix from a growing DC business and that they will be ramping capacity rapidly in Tandem.
• Restaurant sector: EAT, the owner of casual-dining chain Chili, was upgraded to Buy from Hold at Jefferies and rose tgt to $255 saying Chili’s comeback is complete – sales per restaurant rose to over $5M from $3M in 3 to 4 years. Expects growth from menu updates, busier restaurants, new locations, remodels and share buybacks. The firm also upgraded TXRH to Buy from Hold as sees an attractive entry point following the stock’s pullback noting Texas Roadhouse offers a consistent, quality growth story that should sustain above-peer sales and EBITDA growth.

• ALB +2%; was upgraded to Outperform at Mizuho as strong Battery Energy Stationary Storage demand has tipped market balance into favorable territory. Strong BESS outlook lifted 2027 demand by ~10% vs previous estimate, while supply was ~flat.
• BLK +2%; on results as Q3 adj EPS $15.93 tops consensus $14.30 and revs $7.75B vs. consensus $7.43B; Q3 net inflows $205.47B vs. $205.64B last year and Q3 AUM $15.49T, up 15% y/y; Net flows into BlackRock’s debt products were $78.2 billion in the quarter.
• BSP +34%; jumped after Berkshire Hathaway invests an additional $330 mln in Bending Spoons. Fresh investment brings Berkshire’s total investment in the co to $930M, following a $600B investment at the July 2026 IPO (Berkshire’s ownership stake in co rises to 4%).
• GFS +5%; has been selected to build and operate two new semiconductor fabs in New York under a U.S.-Japan initiative providing up to $21B in funding. The first $10B fab is expected online in 2029, with a second $10B facility planned to expand U.S. chip production.
• LQDA +30%; after the company announced it reached a global settlement with UTHR to resolve key ongoing legal disputes between the companies, paying $175M. BTIG upgraded to Buy saying based on the details of the agreement, is better than the best-case scenario envisioned.
• VSTM +14%; as announced positive initial efficacy and updated safety and tolerability data in first multi-tumor clinical data update from the ongoing TARGET-D 101 Phase 1/2 clinical trial evaluating VS-7375, an investigational and potential best-in-class oral KRAS G12D (ON/OFF) inhibitor.

• BAC -7%; Q3 EPS of $0.91 missed the $1.10 consensus estimate and revs of $30B just shy of the $30.58B estimate; the results come after the Treasury Department said yesterday that it fined the bank $1.2 billion after finding it had insufficient systems to monitor for financial crimes.
• DHI 2%; along with other homebuilders BZH, KBH, LEN, TOL among others after hotter CPI print; raises rate hike fears/mortgage rates.
• FAST -4%; as September average daily sales, a closely watched gauge of demand, grew 14.4% y/y, below investor views of about 17%-18%, despite strong beats on gross and EBIT margins; Q3 revs of $2.46B beats est. of $2.44B.
• IONQ -6%; declined after saying it would sell 20.5 mln shares and pre-funded warrants to buy 29.5 mln shares at $40. It also sells 7-yr warrants to buy ~100 mln additional shares; warrants’ exercise price is $69.46, double the stock’s last close.