U.S. inflation accelerated in September, and chip stocks closed Wednesday sharply lower. Today’s producer prices and TSMC’s earnings discussion will help assess the strength of these cost pressures and AI demand.

TLT, the fund tracking U.S. Treasuries with maturities above 20 years, rose while technology stocks continued to fall. Buying in bonds did not carry over into technology. How companies making enormous investments will repay their debts, and when they will generate cash, remain important questions.

Key takeaways

  • The SMH fund ($SMH), which tracks chip companies, fell 3.98%, while the SPY fund ($SPY), which tracks the S&P 500, lost 1.08%. The steeper technology selloff shows why the broad index’s move alone cannot capture sector risk.
  • Even if energy becomes cheaper, rents and service prices may not slow as quickly. Assessing inflation requires looking beyond oil to prices excluding food and energy, rather than tying interest-rate expectations to a single category.

What happened?

  • According to the U.S. Bureau of Labor Statistics, September consumer inflation (CPI) rose to 0.6% month over month and 3.7% year over year, from 0.4% and 3.4% in August. Core inflation, excluding food and energy, held at 0.3% for the month but rose from 2.4% to 2.6% annually. The increase in annual core inflation makes it harder to explain price pressures through oil alone.
  • CNBC (@CNBC) reported that concerns about AI infrastructure spending and debt weighed on shares including Oracle and CoreWeave. Projects can grow before the companies financing them generate cash; the cost of funding that interval matters to investors.
  • In its October 14 statement, the Maritime and Port Authority of Singapore said GFS PRIDE had sunk after being struck while transiting the Strait of Hormuz, and its crew had been safely evacuated. Disruption to shipping could strain oil deliveries and insurance costs. The effect on energy prices depends on the duration of the interruption and other vessels’ passage.

What changed since yesterday?

  • In the previous note, I was watching chips recover from Tuesday’s lows. Wednesday’s selling erased that progress. Before looking for a one-day bounce to continue, I am now watching whether lost ground can be recovered. This time, the bond fund’s rise did not extend to equities.

Market levels

U.S. indexes and technology

  • SPY closed at $769.60. Yesterday’s $766.71 low is a candidate support boundary, while the $776.35 high is the first recovery threshold. Moving away from the low and reclaiming that high would suggest buyers have gained more ground.
  • QQQ ($QQQ), which tracks the Nasdaq 100, fell 1.97% to $728.95. Whether support forms again at yesterday’s $726.39 low matters. I am watching the $740.53 high as the upper recovery threshold; the close near the lower edge left buyers well short of recovering the loss.
  • SMH’s latest close was $564.74. That close is below the $578 support identified in financial analyst Tunç Şatıroğlu’s (@tuncsatiroglu) video and short of his confirmation condition above $590. I am first looking for a return to those two thresholds. His conditional discussion of buying does not make the same view applicable at every lower price.
  • Nvidia ($NVDA) closed at $221.30. The positive scenario in Şatıroğlu’s video requires avoiding a close below $224; the latest close is below that boundary. Yesterday’s $219.64 low is a candidate support level, while $224 is the first threshold to reclaim. Exceeding the $226 intraday high would then test the rebound’s strength.

Bonds and precious metals

  • TLT rose 0.66% to $78.89. Yesterday’s $77.74 low and $79.01 high are nearby support and resistance candidates. Closing near the high suggests bond buying held up. For continuation, I will watch for a move above the upper edge; on a pullback, I will watch whether the price stays clear of the low.
  • The GLD fund ($GLD), which tracks gold, closed at $375.99. While buyers seek support at yesterday’s $373.36 low, the $376.48 high is the threshold a rebound needs to clear. Holding above the upper boundary would be an early sign of stronger buying; losing the low would make a recovery harder.
  • The SLV fund ($SLV), which tracks silver, was at $50.22, close to yesterday’s $50.01 low. Support needs to form at yesterday’s low before the price approaches the $51.67 high. A move above that high could confirm a stronger rebound; the close near the low still points to weak buying.

Crypto

  • Bitcoin was around $80,900 this morning, below yesterday’s $81,326–$84,060 range. Reclaiming $81,326 is the first threshold. Brief jumps before support is reestablished in that area would not be enough to conclude that selling has ended.
  • Ethereum fell to around $2,358; yesterday’s range was $2,402–$2,527. Both it and Bitcoin remaining below the previous day’s lows point to continuing crypto selling. While looking for new support to form, reclaiming the lost lower boundary will provide the first confirmation.

Red flags

  • If disruption to oil shipments persists and producer prices also show spreading cost pressure, companies could face more expensive energy alongside weakening demand. Revenue growth alone would then be insufficient to preserve profit.
  • New chip lows while bond buying continues would strengthen the warning that technology concerns extend beyond interest-rate moves. Alongside TSMC’s demand commentary, the revenue its capacity investments can generate will matter.

Calendar

  • October 15, 09:00 TRT: TSMC’s discussion of its third-quarter results. AI demand, the order outlook and investment spending plans will be in focus.
  • October 15, 15:30 TRT: U.S. producer inflation (PPI). After consumer inflation accelerated, production costs provide the next test.
  • October 15, 19:00 TRT: The U.S. Energy Information Administration’s weekly petroleum and fuel inventories. Fuel supply will be particularly important in the report delayed to Thursday by the holiday.

My analysis

In today’s divergence, I am looking at where companies obtain their money and when they will earn it back. Data-center investment creates orders for chipmakers, while the company making the investment first incurs spending and sometimes debt. Companies benefiting from the same AI expansion can therefore face different financing risks. Rising bond prices do not remove that distinction.

I would become more constructive if TSMC’s demand commentary were accompanied by concrete expectations for investment returns and chip stocks reclaiming lost price boundaries. If strong orders are announced but selling continues, I would read that as investors focusing more on the cost of growth than growth itself. Producer prices and fuel inventories could also change the energy side of that calculation. I will not base the assessment solely on the first earnings headline.

Sources

This is not investment advice; it is a research and monitoring note.