This week's macro highlights review: Expectations rise for the Fed to pause rate hikes in October, AI sector faces divergence and credit risk challenges.
BlockBeats news, October 17 - This week, global markets grappled with inflation, Federal Reserve policy, and the sustainability of AI investments. U.S. September CPI and PPI data came in above expectations, briefly boosting rate hike expectations, but after cautious remarks from Fed officials, a pause in rate hikes in October re-emerged as the market's base case, though the possibility of another rate hike within the year has not been eliminated.
In the AI sector, the market has begun shifting from purely chasing computing power demand to scrutinizing financing costs and investment returns. Highly leveraged AI infrastructure companies such as CoreWeave faced sell-offs, with attention focused on their debt risks and financing models; meanwhile, TSMC's third-quarter net profit grew 69% year-over-year, demonstrating that AI chip demand remains resilient. The market is accelerating the differentiation between leading companies with stable cash flows and infrastructure companies reliant on debt-fueled expansion.
Geopolitical risks continue to disrupt energy markets. The Russia-Ukraine energy ceasefire failed to hold, with both sides resuming strikes on energy facilities; in the Middle East, Saudi Arabia has increased its military involvement in Yemen, raising the security risk for shipping through the Strait of Hormuz, and the risk premium on crude oil supply continues to be supported.
In other markets, South Korea's stock market rebounded on Friday after seven consecutive days of declines, but posted its largest weekly drop in 18 years; Indonesia's stock market suffered a sharp sell-off as MSCI considers downgrading it from emerging market to standalone market status, intensifying capital outflow pressures. In gold, Kazakhstan's central bank plans to reduce the share of gold in its reserves from about 78% to 75%, reflecting how the high interest rate environment is prompting some central banks to rebalance reserve assets.
Additionally, third-quarter earnings from the six largest U.S. banks showed divergence, with equity trading businesses generally growing while fixed income trading came under pressure; Anthropic disclosed third-quarter revenue of $16.8 billion, up 45% quarter-over-quarter, and is advancing IPO preparations. Overall, market focus is shifting from the AI growth narrative to financing risks, the inflation path, and global geopolitical shocks.
