US consumer prices rose 3.7% in the year to September, up from 3.4% in August, with core inflation at 2.6%. Core inflation rose 0.3% month on month versus 0.2% expected, leaving annual core CPI at 2.6%. The acceleration defied expectations and signals persistent price pressures across the economy, prompting bond traders to rapidly reprice their bets on Federal Reserve policy.
Fixed income markets are now firmly pricing in back-to-back Federal Reserve rate hikes for October and December 2026, signaling a more aggressive tightening path than previously anticipated. Markets expect the Fed to raise rates at both remaining 2026 meetings as inflation stays high, with investors watching October and December decisions closely. The Federal Reserve is scheduled to announce its interest rate decision on Wednesday, October 28, 2026 at 2:00 PM ET.
For small and mid-sized business operators, the implication is clear: borrowing costs will likely remain elevated through year-end. If rates rise at both remaining meetings, the federal funds rate would elevate to 4-4.25% from its current 3.75% to 4% range. Firms that have delayed capital expenditures or refinancing in hopes of declining rates may need to act quickly or accept higher financing costs.
All three major U.S. indexes finished higher Thursday as investors shifted money out of major tech stocks and into other sectors. The S&P 500 rose 0.33%, while the Nasdaq Composite gained 0.08%, both ending a three-day losing streak. The DJIA led the gains, climbing more than 500 points, or about 1.08%. On Friday, October 16, 2026, the benchmark KOSPI and tech-heavy KOSDAQ rebounded, supported by bargain hunting and a slight easing in pressure from US Treasury yields.
According to FactSet data, the S&P 500's estimated third-quarter earnings growth is 29.6%, its third straight quarter of 25%+ earnings growth. FactSet estimates forecast YoY growth for earnings to be 28%, 18.2%, and 15.4% over the next three quarters. Right now growth is being driven by a small number of companies which continue to drive growth and stock market performance.
Kimberly-Clark has secured EU approval to buy rival Kenvue subject to it divesting its feminine hygiene brands in the European Economic Area, including its tampon brand Kotex. The EU approved Turkish company Dilek's purchase of the brands. Kimberly-Clark's commitment to divest its feminine hygiene brands will preserve competition, choice and affordable prices for women, the EU competition chief said.
The Cabinet has approved the sale of a 60.72 per cent stake in IDBI Bank to Fairfax Financial Holdings for Rs 52,878 crore. The proposed sale would transfer control of the lender to Fairfax, subject to the completion of the transaction and requisite regulatory approvals. The decision by the Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi, brought to a close a process that has stretched over five years. However, the transaction still requires approval from the Reserve Bank of India (RBI). Fairfax will also have to make an open offer to minority shareholders. According to DIPAM Secretary Arunish Chawla, the deal is expected to be completed before the end of the current financial year.
CCC Intelligent Solutions agreed to be acquired by a consortium led by GTCR and including Elliott Investment Management in a $6.1 billion take-private deal. The transaction removes the software platform provider from public markets, following years of competitive pressures in the claims management space.
Bank of America hired 1,000 contractors to patch flaws exposed by Anthropic's Mythos. Eight states sued OpenAI over ChatGPT safety claims, while the White House put its new Super Intelligence task force to work. The FTC sent OpenAI and Anthropic 50-page demands for records on security incidents, safeguards, marketing and privacy. The intensifying regulatory focus is creating immediate operational costs for major AI developers.
Consumers file antitrust class action alleging AI firms agreed to slow development. Plaintiffs allege that representatives of Anthropic, OpenAI, and Google have been meeting regularly since July 2026, and that OpenAI's CEO stated that AI progress should be slow. Separately, the Justice Department warned the American Bar Association it may face an antitrust investigation if it fails to change rules that limit the role part-time professors play in teaching law students.
Inflation staying sticky at 2.6% core means the Fed is almost certain to hike rates at its October 28 meeting and possibly again in December. For small and mid-sized businesses, this is the moment to lock in financing costs if you have planned capital expenditures, equipment purchases, or debt refinancing. Treasury yields and loan rates move fast once the Fed meets. If you have been deferring a major investment or waiting for rates to fall, that calculus has shifted.
On the corporate side, the deal environment remains active despite rate pressures. Twenty announced M&A deals worth about $530 billion are still waiting to close as of October 2026. The largest is Union Pacific's $85 billion merger with Norfolk Southern. Large acquirers are moving to close major transactions before rates climb further and before year-end holidays create timing bottlenecks. If you are in discussions to buy or sell, momentum is real; if you are considering starting a major transaction, expect larger deal flow in the next two weeks.