Oil & Treasuries Up, Fed Minutes Ahead: 8 Items Shaping the Market Wednesday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, futures point to lower market open for U.S. equities later this morning.

US stocks closed at a record high on Tuesday, having largely shrugged off a sell-off in the Treasury market that began in mid-August and accelerated after the Federal Reserve last month raised interest rates for the first time in three years (FT). The market was in an anxious mood early Wednesday as stock futures fell and bond yields rose. The Cboe Volatility Index, or VIX, was up 3.3% as fears around inflation and an inflated AI trade persist. The S&P 500 and Nasdaq hit record highs the previous session but were falling in Wednesday’s premarket as oil prices also rose amid renewed fighting in the Middle East. Wall Street was waiting for minutes from the Federal Reserve’s last monetary policy meeting, due later in the day, for any indication about the central bank’s thinking on interest rates. (Barron’s)

This morning the U.S. 30-year bond yield hit a fresh 24 year high and as indicated above later today, we’ll get the Fed’s latest set of policy meeting minutes. Those meeting minutes meeting may show how deep the divide was between policymakers who see inflation pressures persistent enough to require steady policy action and those that inclined to be more patient.

Given what we’ve seen from Fed Chair Kevin Warsh so far, we’re not expecting much new insight in today’s meeting minutes, but then again after the Price data found in ISM’s September PMI reports, our view is the real test will be next week’s September PPI and CPI data.

2. Reporting season kicks off next week, with S&P 500 earnings forecast to have risen 27 per cent in the September quarter from a year earlier, according to Goldman Sachs, propelled by companies at the centre of the AI infrastructure boom. That would mark the third consecutive quarter in which earnings growth has exceeded 25 per cent — an unprecedented run outside of the recovery from financial crises… Revenue growth is forecast to hit 12 per cent. (FT)

3. Marvell Technology raised its fiscal 2028 revenue forecast to about $20 billion on Tuesday, above Wall Street estimates, as demand for its custom data center chips grows along with a surge in AI spending… On Tuesday, Marvell forecast fiscal 2031 revenue of $70 billion to $90 billion. At $80 billion, the midpoint of that range exceeds Wall Street estimates of $46.85 billion, according to four analysts ⁠polled by Visible Alpha.(Reuters) Elon Musk’s SpaceX is seeking to raise $40bn to purchase Nvidia chips as the AI and rocket group amplifies its bet on the chipmaker’s advanced technology. (FT) Penguin Solutions separately raised its fiscal 2027 revenue guidance to $2.43 billion at the midpoint, up from a preliminary estimate of $2.1 billion. The guidance boost is driven by the company’s accelerating AI infrastructure business, while its memory business “remains strong,” (Barron’s)

When I spoke with Charles Payne yesterday on “Making Money” over at the Fox Business Network, I said that one of the Portfolio’s strategies is to follow where capital is being deployed. The above three items clearly point to continued strength in AI and data center chip demand, and connecting those dots means the same for networking equipment and electricity. That bodes extremely well for the Portfolio’s chip and AI/data center infrastructure positions as well as those inside the recently reconstituted EPS All-Stars basket. With last night’s market close, that basket was up more than 80% year-to-date compared to the S&P 500’s 14.2% gain on the same basis.

Following Marvell’s upsized outlook, we are seeing price target increases across Wall Street this morning. JPMorgan lifted its target to $360 from $305, UBS to $$350, and BofA to $400 from $365. For now, we’re game to maintain our $340 price target for MRVL shares, but as we move through the Q3 2026 earning season, based on results and guidance from hyperscalers, neoclouds and others as well as custom silicon chip comments from Amazon (AMZN), Meta (META), Alphabet (GOOGL), and others, we plan on revisiting that target. We would also share that those drivers for Marvell, are also positives for Broadcom (AVGO) shares.

4. As a result, falling global inventories and tightening diesel markets are expected to keep crude prices elevated. Global benchmark Brent crude is forecast to average about $105 a barrel in the fourth quarter, $14 above the EIA’s previous estimate. US retail diesel prices, which hit record highs last month, are expected to remain above $6 a gallon in October before gradually easing to an average of roughly $4.50 a gallon in 2027, the EIA said. Overall, for 2026, Brent crude prices are now expected to average about $98 a barrel, up 8% from the EIA’s prior forecast last month, the agency said. (Reuters)

When speaking with Charles I also voiced the concerns about the flow through of higher energy, transportation, food and other input prices and the potential impact on margins for Q3 2026 and the current one. S&P Global’s September U.S. Composite PMI report found “a considerable rise in input costs, one that was the sharpest since October 2022.”

While the market has been driven by technology and accelerating spending on AI and data center, weaker-than-expected earnings in the second half of 2026 in other sectors has the potential to weigh on S&P 500 EPS growth prospects relative to the lofty consensus forecasts. With that in mind, we at the Portfolio will be mindful of what is shared when Levi Strauss (LEVI) reports after today’s market close and PepsiCo (PEP) tomorrow.

5. Apple Inc.’s upcoming push into smart home devices will include a doorbell, thermostat and other accessories developed through an unusual partnership with LG Electronics Inc. The products will be part of an ecosystem of devices that work with Apple’s new smart home hub, as well as an upgraded HomePod mini and fresh TV set-top box, according to people with knowledge of the matter. The new Apple devices are set to be introduced on Oct. 13. (Bloomberg) Microsoft will unveil on Wednesday a new laptop powered by Nvidia’s chips, seeking ‌to turn Windows into a platform for AI agents to handle tasks such as writing code without having to access the cloud… For Nvidia, cracking the Windows PC market could help it go after one of the last major markets dominated by its longtime rivals Intel and Advanced Micro Devices. (Reuters)

The adoption of these connected devices that are increasingly using AI will, in our view, accelerate data consumption and creation. So too will the usage of personal AI agents like Meta’s (META) Muse and OpenAI’s Dots. We see this as well as the path for autonomous driving and connected robotics fueling the multi-year forecasts from the likes of Marvell above and others.

Success for Nvidia (NVDA) in the PC market would not only mean a fresh challenge for Intel (INTC) and AMD (AMD), but also Qualcomm (QCOM), which is aiming to leverage that market as part of its end market diversification strategy.

6. Taiwanese companies have stepped up overseas investment as they rush to build out supply chains that can handle surging demand for artificial intelligence computing infrastructure, with spending concentrated in the U.S. and Southeast Asia. Taiwan Semiconductor Manufacturing Co. is leading the push into the U.S. In July, the company announced an additional $100 billion in investment, bringing its announced U.S. investments to $265 billion. It plans to add four advanced semiconductor fabs, bringing its number of U.S. facilities to 12. (Nikkei Asia) Samsung Electronics is expected to report a nearly nine-fold jump in third-quarter operating profit, driven by robust AI demand, though analysts have cut forecasts by nearly 8% since the end of August… Chipmakers expect the shortage, which began more than a year ago, to persist into next year and perhaps through 2028. (Reuters)

We see those multiyear outlooks pointing to chip industry constraints, and that keeps us bullish on the shares of Applied Materials (AMAT). Next week brings quarterly results and guidance from Taiwan Semiconductor (TSM) and in addition to its end market comments we’ll be focusing on what management has to say about current capacity utilization, oncoming capacity and its capital spending plans beyond 2026. ASML (ASML) will also report next week and during its earnings call we’ll be listening for similar items and reviewing changes in its order book and backlog levels.

7. Economic data today per TipRanks: MBA Mortgage Applications Index (Weekly), Used Car Prices (September), EIA Crude Oil Stocks (Weekly), Consumer Inflation Expectations (September), FOMC Meeting Minutes, Consumer Credit Change (August).

8. Companies reporting today per TipRanks: PM – Applied Digital (APLD), Levi Strauss (LEVI).

At the time of publication, TheStreet Pro Portfolio was long AMAT, AMD, AMZN, AVGO, GOOGL, META, and NVDA.