Bank Earnings Kick Off Tuesday as Chips, Bitcoin Brace for CPI

The setup: record highs, high yields

Wall Street goes into Tuesday's session close to record territory, and it gets there in spite of a bond market that has been punishing borrowers. On Friday the S&P 500 rose 0.6% to 7,811.54, the Dow added 423 points to 51,654.95 and the Nasdaq Composite gained 0.6% to 27,366.17.48 That left the S&P 500 up 1.2% for the week. The Dow gained 0.9% and the Nasdaq trailed at 0.6%, held back by profit-taking in semiconductors and mega-cap technology.46 Reports differ slightly on the benchmark's position. One says the S&P 500 made a record close last week, its first since mid-August.43 Another puts Friday's finish within 0.09% of the October 6 record.42 Either way, stocks are pressing against their highs.

Rates are what make that level uncomfortable. The 10-year Treasury yield sits around 5.24%.59 It ended September at 5.29% after briefly topping 5.3% for the first time since 2002.58 Monday also brings a quirk: equities trade normally on Columbus Day, but the bond market is closed, so stocks open without the usual signal from Treasuries.50 When regular bond trading resumes, it does so on the same morning that earnings season starts in earnest.

Tuesday's main event: the banks report

The biggest story for the next session is the start of bank earnings. JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo all report before the open on October 13. Bank of America and Morgan Stanley follow on Wednesday.31 Johnson & Johnson, UnitedHealth Group and Domino's Pizza also report Tuesday morning.3

Analysts broadly agree on the headline: profits at the largest banks could rise as much as 20% from a year earlier, driven by investment banking and trading revenue.40 Consensus for JPMorgan clusters tightly. Estimates of $5.93 a share on about $51.2 billion in revenue32 sit close to another tally of $5.95 on $51.16 billion.35

Goldman is where the numbers split. Estimates range from $12.4440 and $12.8732 to $14.84.35 One preview found that the Street's Goldman forecast had been cut 10% in 30 days. It also showed that a single data vendor carried two different figures for the bank.34 That spread suggests the Street has little firm sense of Goldman's quarter, so the stock could move sharply whichever way the result lands. Management did little to narrow it. Chief executive David Solomon prepared investors for a muted quarter, with fixed-income trading softer than a strong equities business.40

The stock prices tell a different story from the earnings forecasts. The KBW Bank Index was 13% below its August peak as yields climbed.31 By one measure, the six largest banks fell about 10% over four weeks while the S&P 500 gained roughly 2%.34 Bank shares have been marked down even as estimates held up, which sets a lower bar for Tuesday. Options imply earnings-day moves of about ±3.6% for JPMorgan to ±4.7% for Wells Fargo.34

In this market, the guidance and the details of each report may count for more than the earnings-per-share figure. The pressure points are investment banking fees after late-September IPO withdrawals, credit marks on lending to non-bank financial firms, and expense guidance that could create a classic "beat but sell" reaction.34 Bank of America has already warned that its investment banking fees could fall at least 10%, while JPMorgan has signalled an increase.40 That difference may make the Tuesday banks look better than Wednesday's.

Semiconductors: a rally waiting on TSMC

Chip stocks matter to this week's tape because of what comes after the banks. ASML reports Wednesday and TSMC on Thursday.25 The iShares Semiconductor ETF gained 11% in September and another 3.6% in the first two days of October. It now trades around 43 times earnings, a valuation that leaves little room for results that merely meet expectations.22

TSMC has already done much of the work. Its monthly sales put third-quarter revenue near $46.7 billion, about $1 billion above the top of management's guidance.29 With revenue largely known, the stock will turn on other numbers. Previews point to high-performance computing growth, the share of revenue from the 3-nanometer node, and whether the company again raises its full-year outlook of at least 40% growth. A guidance reaffirmation paired with higher capital spending could still pull the shares down.24

Last week showed how fragile the AI trade is. On Thursday the Nasdaq fell 1.3%, its worst day since mid-August, after a report questioning OpenAI's revenue hit AI stocks.45 Over the weekend OpenAI reportedly told investors it expects annualised revenue of at least $70 billion by year-end, which helped ease those concerns.42 Even so, one Monday outlook still rated semiconductors "cautious": the SMH chip ETF and Nvidia were lower even as index futures rose.44

Inside the sector, investors are moving money between groups rather than out of it. The prior Tuesday, Citi raised its AMD price target to $800 from $575, citing growth in CPU demand from AI agents. Morgan Stanley, meanwhile, cut its KLA target.1 Lam Research fell 3.8% during that session.8 Optical and networking names such as Ciena climbed nearly 11%.8 The money appears to be going to companies tied to memory, networking and power, and away from the more crowded names.

It also matters how much of the market's earnings story rests on chips. Barclays estimates that semiconductors and hardware account for about 40% of this year's upgrades to S&P 500 earnings estimates and 75% of the upgrades for 2027.42 A disappointment from TSMC would reach well beyond chip stocks.

Bitcoin: stuck in a range before CPI

Crypto is trading on the same macro forces, but it lacks the earnings support that stocks have. Bitcoin is near $83,600, about 34% below its all-time high of $126,200 set in October 2025.14 One tally put it up 0.71% to $83,643 even as total crypto market value fell nearly 3% to $2.81 trillion. Bitcoin's share of the market is about 59.6%.16

The past week has been rough. Bitcoin fell back toward $82,000 on October 8 after climbing above $87,000 the previous Friday.13 Altcoins fared worse: most large tokens lost 5% to 10% over seven days, and ether slipped to about $2,500.15 Bitcoin's rising share of the market looks less like strength than a defensive move into the largest coin.

Accounts of institutional demand differ. One report counted ETF flows as negative, with nine straight days of ether fund outflows.15 A trader post cited net bitcoin ETF outflows of $484.9 million on October 7.17 Another account says spot bitcoin ETF flows turned positive by the weekend, though it calls demand modest.20 On balance, institutions look to have paused rather than returned in force. The levels traders are watching are consistent across reports: a clean move back above $85,000 would turn the short-term picture bullish, while a break below $80,000 could open the mid-$70,000s.15 The latest recovery came off a low near $80,308, and the price has struggled to clear resistance around $83,900 to $84,200.16

The real catalyst: Wednesday's inflation report

The banks report Tuesday, but September's consumer price index on Wednesday may set the tone for every asset class. Forecasts differ slightly. Reuters-polled economists expect 3.6% annual inflation, up from 3.4%53, while other previews cite a 3.7% consensus.52 Most agree core inflation should rise about 0.2% on the month.56 Analysts expect energy to drive most of the rise in the headline figure, so core is where a surprise would hit hardest. A core reading of 0.3% or more could bring back talk of a rate hike in October.56

The Fed raised rates in September to 3.75%–4.00%, its first increase since 2023, in a unanimous vote.51 Minutes showed most officials expect another hike by year-end.60 Estimates of the October hike odds range from below 20%46 to 26%56, while a December move is priced near 70%.52 Several Fed officials speak on Tuesday, including Waller, Barkin and Collins.36

The market's reading is that stocks can live with 5% yields as long as earnings keep growing quickly. FactSet expects third-quarter S&P 500 earnings growth of 29.5%.45 Tuesday's bank results are the first real test of that view. If they show steady credit and stronger trading, the rally probably holds into CPI. If expenses or credit marks disappoint, the banks' recent underperformance may turn out to have been an early warning that the rest of the market ignored.