Here is Schwab's early look at the markets for Thursday, October 15:

A possible October Federal Reserve rate hike jumped back into the picture yesterday on hot Consumer Price Index (CPI) data. Today's Producer Price Index (PPI) could either reinforce concerns or cool them.

Investors remain worried that persistent high energy costs could bleed into the core number that excludes food and energy. Those concerns showed up in Wall Street's performance yesterday, especially on the growth side where higher yields can be oppressive.

Tech was already lower even before the CPI unpleasantness, raising questions about whether "buy the dip" will resurface. Chip stocks fell another 4% Wednesday and entered correction territory with the PHLX Semiconductor Index (SOX) down more than 10% from its recent high recorded just a week ago.

Memory chip weakness that hit the market earlier this week on Chinese competition fears spread beyond that into other AI-related stocks as rising inflation signaled by CPI fueled concerns about debt many companies are taking on to build data centers.

AI infrastructure names losing the most ground Wednesday included CoreWeave, Arm Holdings, Marvell Technology, Lumentum, Oracle, and Super Micro Computer, all down about 6% or more. Worst hit was CoreWeave, down double-digits in yesterday's tech tank.

Chances of a rate hike later this month reached 35% late Wednesday--up from 20% earlier this week according to the CME FedWatch Tool--after the September CPI report showed a surprise 0.3% jump in core prices excluding food and energy.

Analysts had expected an improvement to 0.2% from August's 0.3%. Higher costs for services including shelter, air fares, and medical care kept core inflation simmering.

Annual CPI numbers were no better. Headline CPI of 3.7% outpaced expectations of 3.6%, while core annual CPI of 2.6% topped 2.5% expectations. The August increases were 3.4% and 2.4%, respectively, meaning the numbers are going opposite of the way the Fed wants. Core services CPI rose 0.4% for the month.

"The September core CPI print came in a bit hot," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "That marks the second straight 0.3% monthly increase, bringing up the three-month annualized rate of change to 3.4%." The Fed's goal is 2%.

For PPI, due at 8:30 a.m. ET today, analysts expect headline monthly growth of 0.5% and core of 0.3%, both unchanged from August. Annual PPI growth is seen at 5.3%, down from 5.4% in August, while core annual PPI is expected at 4.4%, down from August's 4.6%.

PPI measures wholesale prices, which often can influence what consumers pay down the road. Rising fuel costs have lifted the price of transporting goods, as well as services items like airplane tickets. All of this could factor into September Personal Consumption Expenditures (PCE) prices, the Fed's favored inflation report, due later this month.

The PPI report is different from CPI, in part because CPI puts a higher weighting on shelter costs. That suggests the shelter element driving core CPI higher may play less of a role in today's PPI report. These weight differences put focus on PCE, which arrives October 29. That's a day after the next Fed decision.

Short-term Treasury yields jumped on CPI, with the 2-year Treasury note yield initially rising more than 10 basis points to 4.89%. Short-term yields are closely linked to Fed policy expectations, and rate hike odds for this month immediately surged after the report while stocks ran into selling.

However, yields eased across the curve over the course of the day to just above unchanged for most Treasury notes even though no fresh rate-related news crossed the wire and oil stayed 1% higher. This could suggest strong Treasury buying interest near current depressed levels, though one day isn't a trend.

Also, investors could have been waiting to make decisions until after PPI, and perhaps eyed the Fed's Beige Book that showed little indication of a heating economy. Housing data so far this week also has been soft.

Fed Chairman Kevin Warsh participates in a discussion with the International Monetary Fund (IMF) managing director late tonight, and it's unclear if he'll touch on policy. Still, investors might want to check headlines first thing tomorrow morning to see if Warsh made any market-moving comments.

Another item on today's early deck is September retail sales at 8:30 a.m. ET, almost lost in the shuffle amid so much inflation data. A sharp slowdown is expected to 0.3% monthly growth from 1.2% in August, according to Briefing.com.

The August surge partly reflected higher gasoline prices that month, but also strong consumer spending even away from gas stations. Core sales in August excluding autos, gas and a few other metrics rose 1.4%. That figure for September is one to watch today.

With yesterday's results from Bank of America and Morgan Stanley, all the major Wall Street banks have now reported third quarter earnings. It was a mixed bag, as Bank of America and JPMorgan Chase both missed analysts' expectations. Weakness in bond trading last quarter hurt the trading businesses of many big banks.

Generally, bank earnings reinforced ideas that the underlying consumer and business economy isn't struggling. Loan growth looked solid and credit concerns didn't pop up. There were no large moves by big banks to add protection against possible credit defaults, a sign they don't anticipate turbulence despite current high borrowing costs.

Away from banks, chip equipment maker ASML reported Wednesday and surpassed estimates. It also delivered a robust outlook, saying it's seeing strong demand as far out as 2030, though it may face supply challenges meeting it. ASML shares fell almost 4%, nevertheless, reinforcing ideas that the bar is very high for tech earnings this quarter.

Taiwan Semiconductor Manufacturing, the biggest chip maker in the world, reported earlier today after strong September chip revenue it already unveiled.

The rest of the week is light on earnings, but next week features Tesla, Meta, and Netflix.

In trading Wednesday, major indexes all lost ground but not evenly. Chip pressure hit the Nasdaq and yield worries hurt small caps. The broader market fell less, and strength in health care, energy, and consumer staples kept losses light for the Dow Jones Industrial Average.

Those three were the only S&P 500 sectors higher Wednesday. Tech brought up the rear, down 2.6%. Staples strength on a day when CPI rose suggests investors focusing on defensive sectors possibly less sensitive to rates.

Checking individual Wednesday movers, Bank of America slipped 4.6% as quarterly earnings and revenue missed consensus. A 17% drop in bond trading revenue year-over-year was a sore point, and so was a $1.2 billion charge reflecting a penalty from the Treasury Department related to money laundering and sanctions violations.

Morgan Stanley fell nearly 3% despite earnings and revenue that surpassed analysts' expectations, driven by better-than-expected equities trading revenue.

Dell dropped 11% on a downgrade to equal weight from overweight by Barclays, which cited valuation as one concern, along with worries about enterprise AI timing. Barclays also downgraded Dell competitors Hewlett Packard Enterprise and NetApp.

Health care proved a strong suit yesterday, led by gains in Eli Lilly, Merck, and UnitedHealth.

Berkshire Hathaway climbed for the 10th straight day.

The Dow Jones Industrial Average® ($DJI) dropped 48.62 points (-0.09%) Wednesday to 51,621.48; the S&P 500 Index ($SPX) fell 86.51 points (-1.11%) to 7,718.94, and the Nasdaq Composite® ($COMP) plunged 511.51 points (-1.88%) to 26,692.87.