Inflation Came in Hot. Bonds Rallied Anyway

September CPI beat forecasts, yet the ten-year is down 10.7 basis points this morning as money leaves the AI trade for Treasuries. Healthcare rose 2.53% Wednesday and is the largest sector in the even-weight strategy.

Brad Roth
October 15, 2026

TL;DR

• Core CPI rose 0.3% in September against a 0.2% forecast. The ten-year still fell to 5.082% this morning as money left AI stocks and AI debt for Treasuries.

• Healthcare gained 2.53% Wednesday while chip stocks fell 3.98%. It's now the largest sector in the even-weight strategy at 20.6%.

• Retail sales, producer prices, jobless claims and two factory surveys all land at 8:30.

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Market Pulse

Futures as of 7:12 AM ET, commodities as of 7:18 AM ET, yields as of 7:19 to 7:25 AM ET, currencies as of 7:23 AM ET

• S&P 500 futures are down 0.30% at 7,746.75.

• Nasdaq 100 futures are down 1.26% at 29,801.50.

• Dow futures are up 0.29% at 52,007.00.

• Russell 2000 futures are up 0.26% at 2,752.10.

Wednesday was the worst day for the S&P 500 and the Nasdaq since July. The S&P 500 fell 1.08%, the Nasdaq 100 1.97% and small caps 1.93%. The Dow lost just 0.11%. Only three of eleven sectors rose. Healthcare led at 2.53%, then consumer staples at 2.22%. Technology finished last, down 2.98%, and chip stocks fell 3.98%.

• Brent is $104.70, down 1.28%. West Texas is $95.25, up 0.17%.

• Gold is $4,178.60, up 1.72%. Silver is up 1.71% at $56.83.

• The three-month bill yields 4.195%, the two-year 4.734% and the ten-year 5.082%, down 10.7 basis points.

• Euro/dollar is 1.1215, up 0.56%. The dollar buys 157.84 yen. Volatility futures are 17.96. Bitcoin is $81,035.

• South Korea's market tripped a circuit breaker overnight and Japan's Nikkei lost nearly 5%. TSMC posted a record quarterly profit and still fell 2.2% in Taipei.

• Retail sales, PPI, jobless claims and the Philadelphia and New York factory surveys all land at 8:30.

THOR Risk Gauge

Neutral. The index strategy is fully invested across the three major American indexes. The even-weight strategy holds 60.3% in three sectors and 40.3% in Treasury bills. Falling yields help. A hot CPI, a chip selloff spreading through Asia and record tech default insurance keep it centered.

The THOR View

Wednesday's inflation report was hot, and the bond market rallied anyway. Headline CPI came in at 3.7% against a 3.6% forecast. Core rose 0.3% for the month, a tenth above forecast. Odds of a hike at the October 28 Fed meeting jumped to about 32% from 22% a day earlier. Yields usually jump on that. Instead the ten-year closed Wednesday at 5.189% and sits at 5.082% this morning.

The reason is fear inside the AI trade. CoreWeave fell 15% Wednesday, and its 2032 bonds trade near 78 cents on the dollar, according to Reuters. The cost of insuring tech debt against default hit records this morning, including for Amazon, Alphabet, Meta and Nvidia. Overnight, SK Hynix and Samsung each fell more than 10% in Seoul. Investors are selling AI borrowers and buying Treasuries.

Technology is 19.7% of the even-weight strategy, the smallest of its three sectors. In the regular S&P 500, it's the biggest sector by a wide margin. The sector fell 2.98% Wednesday and closed 6.3% under its 52-week high. The strategy owns the sector fund, not a chipmaker or a cloud lender... and even sizing keeps it near a fifth of the portfolio.

Healthcare took the other side of the trade. It rose 2.53% Wednesday, the best of eleven sectors, and closed 1.5% under its 52-week high. It's now 20.6% of the even-weight strategy, the largest of the three sectors. Drug, hospital and insurance demand doesn't depend on data center budgets. It doesn't wait on the Fed's next move either. When investors ran from growth funded with borrowed money, this is where they went.

Signal Watch

THOR Index Rotation — As of 10/14/26

Fully invested in three equal pieces. The Nasdaq 100 fell 1.97% Wednesday and the Dow just 0.11%. The Dow's banks, drugmakers and industrials absorbed part of the drop.

THOR Low Volatility — As of 10/14/26

Healthcare moved to the top slot as technology slipped to the bottom, still within a point of each other. Financials lost 0.55% Wednesday, about half the S&P 500's drop. Bills hold the other 40.3% at a three-month yield near 4.2%.

THOR AdaptiveRisk Dynamic — As of 10/14/26

The mix runs 45.5% equity, 18.5% alternatives, 15.1% commodity, 14.6% specialty currency and 6.3% fixed income. The energy fund rose to 7.2% as energy gained 0.64% Wednesday and closed 9 cents under its 52-week high. The dollar fund and the commodity fund, the two largest positions, don't move with the AI trade.

One Thing to Watch

Producer prices at 8:30, forecast up 0.6% for September with core at 0.3%. A second hot report in two days pushes October hike odds higher and tests whether Treasuries keep rallying. The three-month bill already yields 4.195%, and bills are 40.3% of the even-weight strategy.

Brad Roth / CIO, THOR Financial Technologies

This content reflects the opinions, analyses, and research of THOR Financial Technologies as of the date published. It is provided for informational and educational purposes only and does not constitute investment advice and should not be relied upon as the basis for any investment decision. Past performance doesn't guarantee future results, and all investments involve risk. For more information, please go to: thorft.com