Market Midday: Stocks Lower, Economy & AI Warning, Mortgage Rate Forecast • 10/14/26

0:00It's the NMC Business News Update. I'm Jessica Ettinger. Major averages all lower this afternoon. Inflation rose last month. Bond yields have retreated a little from the morning pop. The yield on the 10-year note back around 5.25 % this afternoon, but stocks are down. The Dow is down 142 points. Now Caterpillar shares leading it lower. They're down 3%. The S &P 500 index down 80 points. That's a full 1 % today. The Nasdaq down 428 points. That's one and a half percent chipmaker shares are sinking. Companies whose shares hit fresh all time highs today include oil names. Chevron, Exxon, Marathon, Petroleum, ConocoPhillips, Valero and Phillips 66.

0:46Oil has been moving higher today. A container ship sank in the Strait of Hormuz. Iran has been stepping up attacks on ships. A warning about the economy and AI from BlackRock CEO Larry Fink on CNBC. There's a lot of rumors and fear about data centers. Most of it is on misinformation. Most of it is wrong. You know, whether it's use of water. You know, golf courses use more water than a data center. I mean, I can go on and all the different things. But if we have a moratorium of some sort in this country, we will be in a recession. So much of our economy, as you said, David, is based on the build-out of this CapEx.

1:31Inflation hit its highest since last May last month. The CPI, Consumer Price Index, at 3.7 % for September. The Fed's target is 2%. The inflation rate back before the pandemic in 2019 was 1.8%. Here's CNBC senior economics reporter Steve Leisman. Hot CPI. Here's the data coming in where we thought it was going to be on the headline. 3.7, bottom line going the wrong way. How did we get there? Energy surging 9.3 percent. Bleeding into airline fares up 1.2 percent. Used cars, though, also rising. Hospital services. Shelter, a big part of the reason why the core went up in the month of September. One surprising category I want to look at here.

2:15Audio and video equipment up 3.6 percent year over year. It had been deflating until the tariffs came along. And here's a take from Mad Money host Jim Cramer. Housing going up as a percentage of your income because of mortgage, so therefore you stay in a rented apartment, and then the rent goes up because of such demand, so that didn't work. Many of these are just so traceable to both tariff and right to the president. Look, if you want to mandate, I feel like telling you to say this today. If you want to mandate higher prices, you're going to have a hard time doing better than this guy. Would-be homebuyers facing mortgage rates in the 7.5 % range into next year.

2:57It's a sharp increase in a forecast. CNBC's Diana Olick has more on Fannie Mae's outlook. Economists at Fannie Mae are now predicting much higher mortgage rates through the end of this year and into 2027. The October forecast now puts the average rate on the 30-year fixed at 7.4 % for the fourth quarter of this year. and 7.5 % through all of next year. Now, the average rate on the 30-year fix will likely move higher. Bond yields are rising after that hotter-than-expected inflation report. The average rate today on a 30-year fixed home loan ticked higher to 7.56%, according to Mortgage News Daily.

3:36Jessica Ettinger, CNBC. From gas prices to housing prices, from government spending to consumer spending, from the AI boom to the data center backlash, How will this election hit your pocketbook and your portfolio? Continuing coverage, the economy election, CNBC. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading.

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