Pinpoint Market Intel, 10.19.26

Interest rates have settled down, while AI fears have bubbled🫧 up and investors are now focused on midterm election outcomes.

Pinpoint Market Intel is a new feature explaining where things stand in markets and the political economy. We’ll feature 10-20 charts per week, some recurring and some fresh, to highlight the trends that are most important to follow. If there’s some data you’re interested in, let us know and we’ll chart it if we can.

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Inflation is heating up, as anybody who fills a gas tank knows. Most people pay attention to the overall inflation rate, which jumped from 3.4% in August to 3.7% in September. But the wholesale inflation rate is important too, because a jump in producer prices usually companies dealing with higher costs will pass some of that onto consumers through future price hikes. And wholesale inflation jumped from 5.6% in August to 6.3% in September. That suggests consumer inflation could worsen.

The biggest source of inflation is no surprise: energy and things related to energy.

Oil prices have been surging as the Iran war drags on. The current price of Brent crude is close to $110 per barrel, the highest since May.

Gasoline and diesel prices dipped during the last couple of weeks, but they will probably follow oil prices back up. President Trump’s supposed deal to acquire some diesel products from Russia hasn’t had any noticeable impact on diesel prices. Russia has internal fuel shortages of its own and may not have any diesel to spare. Trump’s deal has also generated intense controversy and he may simply drop it.

Soaring interest rates have been a big factor in financial markets this year. Rates have now stabilized and might stay around current levels for a while. Mortgage rates lag the benchmark 10-year Treasury by a couple of weeks, and those rates will probably come down a bit, just as the 10-year yield has.

Stocks hit record highs on October 6, but have since hit the skids. A lot of the financial news sites focus on daily or weekly changes in the market. We prefer a longer-term view because stocks can be volatile. Unless you’re speculating or trying to time the market, longer-term performance is what matters. Here’s how the S&P 500, Nasdaq 100 and Russell 2000 indexes have performed this year: