GS Milhous Mark to Market for Wednesday

GS Milhous - Mark to Market for Wednesday 14 Oct 2026 Stowe Milhous · Goldman Sachs · Associate, Cross-Asset Strategy (CAS), FICC & Equities (with Charlotte Hussey, Zachary Moussa) 14 Oct 2026

Good evening. Here is the Mark to Market for Wednesday, where risk traded poorly across the spectrum. Stocks fell after hotter than expected CPI brought financing risks to the top of focus, as macro credit spreads widening the most in a single session in months. Credit underperformed stocks, while rates actually held in, albeit in choppy price action reflective of growth fears.

• Equities: US equities finished Wednesday in the red and breadth was negative, as the S&P saw its first -1% move in 53-days: SPX -111bps to 7718, NDX -202bps to 29,950, RTY -193bps to 2729. Treasuries were mixed after this morning's hotter than expected CPI print, (33bps core vs cons 20bps), with the market now pricing in hike probabilities of 35% for October, and 87% in December. Today 8 of 11 sectors finished lower, we saw a large selloff across, Tech -2.62, Communication Svcs. -1.73%, and rotation into defensive sectors, Healthcare +2.44%, Consumer Spls. +2.38%, Energy +0.80% all outperformed. The "flight to safety" and rotation towards defensive sectors was observed in several GS custom baskets: the Global NeoClouds (GSXGNEOC, -10.93%), GS Quantum Computing index (GSX1QNT1, -7.14%), Expensive Defensive (GSXUEDEF, +1.18%).

• Rates: Incredibly choppy price action today as volumes finished ~140% above recent averages as the curve flattened. This mornings CPI print came in hot, printing 33bps unrounded on core, with firmer shelter, auto, and lodging categories. Immediately after the print, rates sold off across the curve, with 2y notes soaring up 20bps and Oct FOMC hitting a high of 14bps of hikes priced. As the session went on, and risk started to bleed, we saw growth fear type price action and a flight to quality into USTs. FM and RM were better buyers of USTs across the curve. In swaps, we saw steepening and paying of rate causing back end swap spreads to trade well. To take stock, 2y notes traded in a 20bp range to close essentially flat, with the rest of the curve trading in a greater than 10bp range on the day. 2s10s cash curve is ~3bps flatter on the day, and 2s30s ~4.5bps flatter. The market closed pricing in ~8.5bps of hikes in the October meeting, and ~30bps through the end of the year.

• Credit: Macro credit followed tune with the broader market, trading softer today with beta risk getting hit lower as the AI trade has come under pressure in the repeat funders. CDX IG closed +1.86bp wider and CDX HY -43cts lower in continued decompressionary flows. The notable movers came in the form of ORCL CDS closing +31bps wider on the day, CRWV bonds down another -2pts, and ASUCOR another -3pts lower, as the CCC and high beta BB names continue to feel pain in LevFin world. Generically, IG cash closed +1-2bps wider while hypers (+4-5bps) and datacenters (+7bps) underperformed. HY cash broadly closed -.5pt lower as CCCs continued to soften and HY AI Datacenters underperformed with the beta to the CRWV move. $3.8bn priced in 2 IG deals while $0.9bn priced in 1 HY deal.

• FX: The Dollar ended the session stronger across G10 following today's firmer than expected CPI print. EUR closed -40bps lower, continuing to be a key driver of the USD move higher. We have now taken out,

and remained below, the key support at 1.1190/1.1200 and path of least resistance stills feels lower into 1.1000. Today's data emphasizes the risk that a US cooldown might not come in time for Europe. Spot-vol correlation is starting to underperform. In recent session we have seen a spot down/vol down dynamic given recent reference to unwind EUR puts rather than add fresh risk. JPY and NOK were the best performers across G10 and ended ~flat. With the market pricing in 50-50 odds for an October hike, G10 FX pairs are now pricing in a ~50bps implied gap for the next FOMC meeting.

• Tomorrow Brings: Tomorrow at 8:30am, we get Retail sales, September (GS +0.3%, consensus +0.3%, last +1.1%); Retail sales ex-auto, September (GS +0.4%, consensus +0.5%, last +1.3%); Retail sales ex- auto & gas, September (GS…