What Are the Key Insights from This Week’s Market Update?
- Historic S&P 500 Bull Market Milestones: The S&P 500 celebrated the fourth anniversary of its bull market (up ~120% from 3,577 to 7,811 since October 12, 2022) and surpassed 1,000 trading days without a new 52-week low—its 6th longest run on record.
- Inflation Rebound & High Borrowing Costs: September CPI surged to 3.7% annually (driven by a 9.1% monthly spike in gasoline), while core inflation ticked up to 2.6%. Mortgage rates hit a three-year high of 7.40%, slowing real estate activity despite 1.6 million homes on the market.
- Corporate Credit Strain & $5 Trillion Megacaps: CoreWeave bond yields spiked to 15% as default odds exceeded 50%, illustrating Ray Dalio’s warning on rising capital competition ($4.4T/yr borrowing projected by 2027). Meanwhile, Apple joined Nvidia above a $5 trillion market cap.
What Major Milestones Did the S&P 500 Bull Market Reach This Week?
It was a big week for markets, having surpassed two major milestones. Monday marked the fourth anniversary of the bull market which began on October 12, 2022. Only four years later the S&P 500 went from 3,577 to 7,811, marking a gain of nearly 120%. A combination of double-digit earnings growth, resilient consumer spending, and a strong labor market were the catalysts despite years of inflation and interest rate hikes. The second milestone is that the S&P 500 surpassed 1,000 trading days without a new 52-week low. This is one of the longest stretches of sustained growth in the index’s history, currently ranking as the sixth longest run on record. It reaffirms the principle that time in the market beats timing the market.
How Are Higher Inflation and Treasury Yields Impacting the Economy?
Wednesday’s Consumer Price Index report confirmed what most of us have already noticed at the gas pump. Prices rose 0.6% in September, and the annual inflation rate climbed to 3.7% from 3.4% in August. Gasoline did most of the damage. It jumped 9.1% in the month, accounting for more than half the increase, and is now up 34.2% from a year ago. The more worrying number was core inflation, which excludes food and energy. It rose to 2.6% from 2.4%, ending a stretch of steady cooling. Inflation quietly eats away at every dollar held in cash or fixed-rate bonds. At 2%, purchasing power takes about 36 years to fall by half. At 3.7%, it takes about 19. It also leaves little room for the Fed, which had already raised rates in September, while 10-year Treasury yields recently hit their highest level since 2002.
What Triggered CoreWeave’s Recent Market Meltdown?
In company news, let’s discuss the meltdown of CoreWeave this week which is an example of an AI adjacent company that flew too close to the sun. It buys huge numbers of Nvidia chips, houses them in data centers and rents computing power to AI developers. Much of it was bought with borrowed money. On Tuesday, the yield on its bonds due in 2032 touched 15%, and on Wednesday the stock fell 16%. Credit default swaps, which are essentially insurance against a borrower failing to repay, now put the odds of default within five years above 50%. An analyst at DA Davidson put it bluntly: borrowing at 9% to earn 5% is “destroying value at every turn.”
Why Is Ray Dalio Warning About Capital Shortages in Corporate Debt Markets?
This week, Ray Dalio, founder of Bridgewater Associates, laid out a simple argument: there is only so much money available to lend, and too many borrowers want it at the same time. He estimates that new borrowing by governments and corporations will reach $4.4 trillion a year by 2027. Corporate borrowing doubles over that period, driven largely by AI, while Washington keeps running large deficits. When borrowers outnumber lenders, lenders can demand higher interest rates, and the weakest borrowers get squeezed first. This is how a shortage of capital turns into a liquidity problem. The money doesn’t disappear. It just becomes too expensive for the companies that need it most, and CoreWeave is an early example. Dalio calls the corporate bond market “the canary in the coal mine” because rising yields there are an early warning of trouble.
Why Are Home Prices Staying High Despite 7% Mortgage Rates?
In other news, if you’ve looked at the housing market recently you may have noticed a paradox. Nationally, 1.6 million existing homes are for sale, yet the median price is still up 1.3% from a year ago. In Texas and Florida, the number of homes for sale is now above 2019 levels. High rates are part of the story: mortgage rates have risen seven weeks in a row to 7.40%, the highest in almost three years. But rates cut both ways. They push buyers to the sidelines, and they also discourage owners with 3% mortgages from selling. Owners who don’t need to sell are taking their homes off the market rather than accepting less, especially in Florida and Texas. Prices are falling, just a lot slower than one would expect.
How Did Apple Reach Its Historic $5 Trillion Market Cap Valuation?
Lastly, Apple closed above $5 trillion in market value on Wednesday, joining Nvidia ($5.33 trillion) as the only companies at that level. Apple first crossed $4 trillion on October 28, 2025, and first touched $5 trillion during trading in late July, roughly nine months later. It then took six more tries before finally closing above it this week. Now you know.