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US wholesale inflation picked up:

US wholesale inflation jumped in September to its highest level in more than four years, marking the second hotter-than-expected inflation reading this week and adding to concerns about the economy just weeks before the midterm elections.

The Producer Price Index rose 1.3% from the month before and 6.3% from the year before, according to Bureau of Labor Statistics data released Thursday morning. It’s a sharp upswing from August when wholesale prices rose 0.5% to an annual rate of 5.6%.
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Energy prices, driven higher by geopolitical conflicts including the war with Iran, drove September’s increase, accounting for 80% of the 2.9% leap in goods prices. That’s the largest-ever monthly increase, according to BLS data that goes back to 2009.

However, businesses are contending with price pressures beyond energy. Core PPI, which strips out food and energy, rose at 0.7%, its fastest rate in five months, lifting the annual rate to 5%, its highest since January 2023.

US inflation news was not encouraging:

The Consumer Price Index Report, released by the Bureau of Labor Statistics on Wednesday, showed that overall prices rose 0.6 percent, the largest monthly increase in five months. Compared with the same time last year, prices were 3.7 percent higher.

The bulk of the increase stemmed directly from energy prices, which have shot higher this year because of the war with Iran.
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Gasoline prices, which in late September rose to nearly $4.50 a gallon, surged 9.1 percent for the month. That accounted for more than half of the overall monthly increase in prices. Gas prices are up 34.2 percent over the past year.

Fuel oil prices, used for heating in many homes in the Northeast, have also shot higher, rising 15.3 percent in September, or 74.2 percent on an annual basis. Higher fuel costs have boosted airfares, which were up 1.2 percent in September, or 22.4 percent over the year.

Food prices were flat for the month, but over the past 12 months have risen 2.5 percent.

“Core” inflation, which excludes volatile energy and food prices, edged higher as well, but by a smaller magnitude. Over the course of September, these prices were up only 0.3 percent. Over the past year, they were up 2.6 percent.
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Average hourly earnings, adjusted for inflation, fell 0.5 percent in September, and were down 0.7 percent from a year earlier. It was the sixth straight month of year-over-year declines in real earnings.

This had a fleeting effect on Treasuries:

US Treasuries rallied sharply on Wednesday afternoon, reversing an earlier selloff spurred by the latest hot inflation report and leaving yields on most maturities lower for the day.

The turnaround highlighted an increasingly vigorous debate in the market, centering on accelerating consumer ⁠price data ​on the one hand and a string of comments from Federal Reserve officials on the other suggesting that the central bank is not in a rush to hike rates further to try to tame stubborn inflation.
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On Wednesday morning, trader bets on the probability of a rate hike at ‌the Fed’s October ​27-28 meeting rose to around 40% from just ‌22% ahead of the data. But by late afternoon, bets for a hike this month fell back to about 33%, according to ​LSEG data.
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The 2-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, rose 0.9 basis points to 4.802% after earlier touching 4.9521%, its highest level since September 29.

The yield on the benchmark US 10-year Treasury note fell 2.7 basis points to 5.19% after hitting 5.3293% in morning trading.

The yield on the 30-year bond fell ⁠4.2 basis points to 5.521%, eying its fourth straight day of declines. Earlier it had ​risen to 5.6277%.

The effect on equities was less fleeting:

Hotter-than-expected U.S. inflation data sent the Nasdaq to a sharply lower close on Wednesday, with worries about more interest rate hikes from the Federal Reserve pummeling shares of Oracle, CoreWeave and other ⁠AI ​stocks sensitive to higher borrowing costs.
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The S&P ⁠500 declined 1.11% to end the session at 7,718.94 points, its biggest one-day drop since July 29.

The Nasdaq declined 1.88% to ​26,692.87 points, its biggest daily drop since July 23. The Dow Jones Industrial Average declined 0.09% to 51,621.48 points.

Canada’s S&P/TSX Composite index also closed in the red, with a loss of 1.11%.
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After hitting a record high last week, the S&P 500 remains up almost 13% in 2026, with most of that gain fueled by AI-related stocks. The median S&P 500 stock has gained 4% in 2026, and over 200 of the index’s components are in negative territory.

PerpetualDiscounts now yield 5.88%, equivalent to 7.64% interest at the standard conversion factor of 1.3x. Long corporates yielded 5.34% on 2026-10-14. Therefore the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has remained constant at the 230bp reported October 7.

The TXPR price index was up 57bp today. Volume was 668,930, a little below the median of the past 20 trading days.

CPD was up 36bp to 14.00, on volume of 65,170 (consolidated: 314,890), a little below the median of the past 20 trading days.

ZPR was up 23bp today on volume of 79,370 (consolidated: 478,310) well below the median of the past 20 trading days.

Jobs, jobs … whoopsy!

Canada’s economy posted a second consecutive month of job losses in September, pushing up the unemployment rate and offsetting what had been a hot streak for the labour market earlier in the year.

Statistics Canada said Friday the economy lost 68,000 positions in September, coming off a loss of 42,000 roles in August. Economists had expected a gain of 9,200 jobs in the month.

Statscan said job losses were nearly evenly split between full- and part-time work and were concentrated in the public sector.

The unemployment rate edged up a tenth of a point to 6.5 per cent last month, back to where it stood at the start of the year in January.
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“Most September losses came from non-trade-facing sectors and from educational services for Quebec in particular, so it would be premature to blame tariffs for the weakness,” said Daniel Hyun, senior economist at KPMG Canada, in a note.

Signs of stability in the private sector – despite four straight months of declines in public sector employment – were also reassuring to economists.
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Average hourly wages rose 2.3 per cent on an annual basis last month, Statscan said, up from 2 per cent in August.

Meanwhile:

The ⁠S&P/TSX Composite Index ended up 519.24 points, or 1.48%, at 35,664.62, marking its highest closing level in two weeks and its biggest advance since September 3. For the week, the ​index added 0.46% after two straight weeks of ‌declines.

Canada’s economy shed 68,300 ‌jobs in ​September and the unemployment ‌rate edged up to 6.5%. Analysts had forecast a jobs gain ​of 9,200.

Investors now ​see a 25% chance the BoC would hike at the October 28 policy announcement, down from 40% before the jobs report.
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The Dow Jones Industrial Average rose 423.31 points, or 0.83%, to 51,654.95, the S&P 500 gained 46.15 points, or 0.59%, to 7,811.51 and the Nasdaq Composite gained 172.83 points, or 0.64%, to 27,366.17.
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Among the 11 major sectors of the S&P 500, communication services was the lone percentage loser.

Elon Musk’s SpaceX struck a deal to acquire a nationwide low-band spectrum portfolio, posing a direct challenge to US wireless companies. Telecom firms T-Mobile US, AT&T, and Verizon dropped between 8.8% and 13.3%.

That negative sentiment for the sector spilled over into Canada. Telecoms fell sharply as investors fretted over what future competition they may face, even though the acquisition of the portfolio doesn’t impact Canada directly. BCE lost more than 5% and Cogeco Communications 7%. The TSX communication services index was down 4.2%. European telecom stocks also tumbled.