Hot PPI fails to derail stocks; Dow +1.1%, 10-year yield drops 9 bp to 5.10%
Friday, October 16, 2026 · as of Oct 16, 6:30 AM ET · covers the prior trading session
Wholesale prices rose far faster than expected in September, but stocks finished higher as AI-related selling eased and Treasury yields fell sharply. Asia rebounded Friday, Europe is mostly higher and US futures are mixed. For dairy, USDA block cheese fell for a fifth straight week while feed grains slipped.
Key numbers
What mattered yesterday
- September producer prices ran hot: PPI rose 6.3% year over year vs 5.3% expected (August revised to 5.6%), and core PPI rose 0.7% m/m vs 0.3% expected. Trading Economics – US PPI
- Chip selling eased after Nvidia's CEO defended CoreWeave (+5.9%); the Dow added 556 points (+1.08%) while the Nasdaq finished barely higher (+0.08%). Trading Economics – US stocks
- Treasuries rallied despite the inflation print: the 10-year fell 9 bp to 5.10% and the 2-year fell 5 bp to 4.77% (Oct 15 vs Oct 14). U.S. Treasury
- Fed Chair Warsh, speaking in Bangkok late Thursday ET, did not signal an imminent hike; TSMC's record Q3 profit helped Asian chip stocks rebound. Trading Economics – Japan
- Oil stayed elevated on Strait of Hormuz shipping risk after a container ship was sunk by an Iranian projectile; EIA reported an 8.6M-barrel US crude draw. Trading Economics – Crude oil
Market snapshot
Why it mattered
Reported: Wholesale inflation came in well above forecasts, yet the Dow and small caps led a rebound as AI-related selling cooled and Treasury yields fell sharply. Asia followed with broad gains Friday, Europe is mostly higher, and US futures are mixed with Nasdaq contracts slightly lower. Gold and copper are up while the dollar slips.
Our read: Commentary, not investment advice. Bonds rallying on a hot PPI suggests markets care more about growth and AI-spending risk than one inflation print. With the 10-year near 5.1%, rate-sensitive borrowing stays expensive, and oil near $96 keeps energy-driven inflation in play for the Fed.
Today's calendar
All times ET (Trading Economics, converted from UTC).
- 8:30am – Import prices (Sep) m/m: forecast 0.8%, prior 0.7%; export prices: forecast 1.0%, prior 0.6%
- 9:15am – Industrial production (Sep) m/m: forecast 0.4%, prior 0.0%
- 2:00pm – Monthly Treasury budget statement (Sep): forecast −$29B, prior −$167B
- 4:00pm – Net long-term TIC flows (Aug)
- 6:00pm – Chicago Fed President Goolsbee speaks
- Earnings: Travelers (TRV), time unconfirmed (Newsquawk)
Business lens
Dairy (USDA weekly survey, week ending Oct 10, vs prior week): 40-lb blocks $1.4309/lb (from $1.4579, fifth straight weekly decline); butter $1.3600/lb (from $1.3696); nonfat dry milk $1.9692/lb (from $1.9365); dry whey $0.7198/lb (from $0.6814); barrels unavailable. Latest FMMO (September, all-market average): Class III $16.04/cwt, Class IV $18.94/cwt. CME spot cheese/butter and Class III futures moves: unavailable today.
Feed (CBOT settles Oct 15 vs Oct 14, Yahoo Finance): corn 478.0¢/bu (−2.75¢); soybeans 1,263.0¢ (−14.25¢); soybean meal $359.80/st (−$10.30); wheat 670.0¢ (−3.25¢). All slightly lower again overnight.
Fuel: US on-highway diesel $6.179/gal, week of Oct 12, down 2.0¢ vs prior week (EIA).
Freight: unavailable.
Rates: SOFR 3.88% (Oct 14); 2Y 4.77%.
Our read: Commentary, not investment advice. Steadily lower block cheese points to a weak October Class III, though firmer whey softens the hit. Butter in the mid-$1.30s holds down Class IV butterfat value while rising NDM props up the skim side, so Class IV should keep a wide premium over Class III. Cheaper corn and meal give some feed-cost relief, but with milk prices this soft, margins stay tight. Diesel above $6 remains a real cost for hauling and delivery.