Bank of America, through its strategist Michael Hartnett, identified four reasons justifying a cautious position for the next month. Treasury yields remain near multi-decade highs, with the consumer price index rising 3.7% in September and the producer price index up 6.3%, its biggest annual gain since 2022. Traders are pricing in a more than 77% chance that the Federal Reserve will raise rates by at least 25 basis points before year-end. Hartnett also expects Democrats to gain control of Congress in the midterm elections, with 90% odds of a House majority and 63% odds of Senate control. Finally, artificial intelligence-linked names had a difficult week, with CoreWeave tumbling more than 22% and the VanEck Semiconductor ETF down 9%.
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