Weekly Outlook: U.S. Quarterly Earnings as a Litmus Test

The price of oil continues to set the pace. AI valuations also remain a topic of discussion. The quarterly earnings season is expected to provide new insights on this front. It is picking up steam this week.

October 12, 2026. FRANKFURT (Deutsche Börse). Slightly lower oil prices and bond yields, coupled with easing AI concerns and a positive close on US stock markets—the DAX currently appears to be on the mend. US President Trump recently ruled out an attack on Iran ahead of the midterm elections. This slowed the rise in oil prices. However, the price of a barrel of Brent crude on Monday morning still stands at just under $105. “Against this backdrop, the financial markets are being kept in check by inflation concerns,” notes Helaba analyst Ulrich Wortberg.

Yields on government bonds and risk premiums also remain at high levels. “There’s certainly no sign of a significant easing,” the analyst notes. French bonds remain in the spotlight. “Ten-year OATs are currently yielding 4.85 percent, after briefly touching the 5 percent mark—the highest level since 2002.”

The DAX (DE0008469008) stood at 25,236 points on Monday morning, up from 25,170 on Friday evening and down from its all-time high of 26,659 reached in late August. US stock markets closed higher on Friday, but the S&P 500 and Nasdaq remained below the new record highs reached last week. There is currently little movement in gold and Bitcoin: A troy ounce of gold (XC0009655157) is trading at $4,186 on Monday morning, while Bitcoin is trading at just under $84,000.

“Companies must demonstrate whether high valuations are justified”

This week, the US third-quarter earnings season is picking up steam. It kicks off tomorrow, Tuesday, with US banks. According to LBBW analyst Rolf Schäffer, the earnings season will serve as a litmus test. “Companies must demonstrate whether their results justify their high valuations,” he explains, referring to AI companies. Aside from that, the situation in the Middle East and the trend in commodity prices will continue to preoccupy the markets this week. “Attention will also be focused on France’s budget plans for 2027,” he adds.

“Five Tech Heavyweights Drive the S&P 500”

Sören Hettler of DZ Bank points out that European indices have posted slight losses since the middle of the year, while the S&P 500 has gained about 4 percent. “However, the situation in the US is not as robust as it initially appears,” Hettler notes. The five tech heavyweights have driven the leading US index up by 5 percent since the middle of the year, while the remaining 495 index components have, on balance, actually dragged it down slightly. “It’s also clear, however, that neither European nor US indices are immune to global headwinds,” he notes. He does not expect tensions in the Middle East to ease anytime soon, but he considers the fears on the bond markets to be exaggerated. “There are no signs of either a new euro crisis centered on Paris or a sustained US default.”

“The outlook is key”

Tomorrow, Tuesday, US banks JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup will report their earnings; on Wednesday, Morgan Stanley and Bank of America will follow. In Europe, ASML is among the companies reporting this week, while in Asia, TSMC will report. “The consensus expects earnings growth of 25.8 percent for the S&P 500, 22.8 percent for the Stoxx 600, and 24.2 percent for the DAX,” reports DekaBank. However, the outlooks will be decisive. “Even the slightest signs that the investment cycle of AI companies is slowing down are likely to be met by the market with extreme nervousness and, presumably, significant sector rotation.”

On the economic front, the US inflation figures for September will likely be the highlight of the week. “Discussions about the Fed’s and the ECB’s room for maneuver in monetary policy are likely to return to the forefront with the release of the inflation figures,” says Claudia Windt of Helaba.

Key Economic and Market Data

Monday, October 12

US: Columbus Day. The bond market remains closed.

Wednesday, October 14

China: September exports and imports.

3:30 a.m. China: September consumer prices. According to DekaBank, price pressure in China remains low due to weak demand from private households and existing energy price regulations. Consumer prices are expected to have been 1 percent above the previous year’s level in September.

2:30 p.m. US.: US Consumer Price Index for September. Hamburg Commercial Bank reports that the annual rate is expected to rise from 3.4 to 3.6 percent. An upward surprise would likely further reinforce the outlook for persistently high US interest rates and provide additional momentum for the US dollar.

Thursday, October 15

2:30 p.m. US: September Retail Sales. According to Metzler Research, growth is expected to be slightly weaker than in August.

Friday, October 16

3:15 p.m. US: September Industrial Production.