Matt Rowe, head of portfolio management and cross-asset strategies at Nomura Capital Management, warns that “higher degrees of inflation are our reality moving forward.” Investors are increasingly anxious about inflation risks that haven’t yet been factored into the bond market, especially with the upcoming November 5 presidential election looming. As of Tuesday, prediction markets showed Republican nominee Donald Trump leading Democratic nominee Kamala Harris. Despite this, the overall inflation outlook remains uncertain, regardless of who wins. On Tuesday, inflation concerns continued, even as oil prices dropped and Treasury yields fell. The 10-year Treasury yield ended at 4.037%, reflecting a decline from recent highs. Nevertheless, bond-market volatility, as measured by the ICE BofAML MOVE Index, remains near its highest levels of the year, raising fears that inflation could surge beyond the Federal Reserve’s ability to control it. Economists predict that Trump’s policies may result in higher inflation, interest rates, and federal deficits compared to those of Harris. However, some experts believe that inflation and economic growth could be similar regardless of the election outcome. The nation’s growing debt, which now stands at $35.7 trillion, along with a $1.9 trillion budget deficit, is also a major factor contributing to long-term inflation concerns. Eric Vanraes, head of fixed income at Eric Sturdza Investments, suggests that Trump’s potential victory could increase inflationary pressure on long-term interest rates. Still, the composition of Congress will play a crucial role. If Democrats control Congress, Trump’s policies may face limitations, meaning that the balance of power in the Senate and House could have a greater impact on long-term yields than the presidential race itself. Rowe highlights that inflation could persist due to the rising costs tied to reshoring and a more insular U.S. economy. As globalization wanes and the U.S. faces a more complex economic environment, there are limits to what interest rate policy can achieve. The past 15 years of favorable trade and accommodative policies are coming to an end, and now inflation risks could disrupt the bond, currency, and stock markets. Adding to inflation worries is the debate over the “neutral” rate of interest—a theoretical level that neither stimulates nor slows the economy. If the Federal Reserve cuts rates too aggressively, it could unintentionally ignite more inflation. Both Trump and Harris have outlined fiscal policies that could further strain the national debt and increase inflationary pressures. Although inflation may ease in the short term, the outcome of the U.S. election and the makeup of Congress will play a key role in shaping long-term inflation trends and the country’s fiscal future.

Elon Musk unveiled the Robovan and a new version of the Optimus humanoid robot at Tesla’s highly anticipated event in Southern California on Thursday night. In addition to showcasing the Cybercab, Tesla’s latest robotaxi prototype with no steering wheel or pedals, Musk introduced the Robovan, a futuristic, boxy vehicle designed to transport up to 20 passengers or cargo. The event, held at Warner Bros. Studios in Burbank, highlighted Tesla’s advancements in autonomous vehicles and robotics. The Cybercab, which Musk said would cost less than $30,000, is set to be fully autonomous, allowing passengers to reclaim time once spent driving. Musk reiterated that vehicles like the Model 3 and Model Y will achieve full self-driving capability by 2025 in states like Texas and California, pending regulatory approval, and predicted mass production of fully autonomous cars by 2027. The Robovan, with its sleek, stainless-steel body reminiscent of the Cybertruck, is designed for both personal and commercial use, capable of carrying people or goods. Musk also showcased a revamped Optimus humanoid robot, emphasizing its role as a personal assistant for domestic tasks. He compared it to iconic robots like R2-D2 and C-3PO from Star Wars, saying, “Optimus robots will walk among you.” While the event offered exciting glimpses into Tesla’s future, Musk did not provide updates on the development of lower-cost Tesla models, leaving investors eager for more details. He acknowledged that full autonomy will require regulatory approval, and some analysts noted that the timeline for autonomous vehicles remains uncertain. Tesla shares (TSLA) dropped by 6% in early trading following the event, with no news about affordable Tesla models to excite the market. Tesla’s stock has lagged behind the broader market this year, raising concerns among investors. The event, which started nearly an hour late due to a reported medical emergency in the audience, concluded with attendees taking test drives of Tesla’s latest innovations in a city-themed set designed for the occasion.

Buying pressure on the Dow Jones Industrial Average has reached historic levels across multiple time frames, according to SentimenTrader. In a recent note, Jason Goepfert, senior research analyst, pointed out that the Dow has risen in 152 of the past 250 trading days—an impressive win rate of nearly 61%. The only other times this level of consistency occurred were in April 2010 and May 2018, both of which preceded several months of volatile trading. This momentum, however, extends beyond the short term. Over the past 100 weeks, the Dow has climbed in just over 60% of them—a solid recovery after a tough 2022, though not an extreme figure relative to the last 40 years. Additionally, the index has risen in 63% of the past 60 months and 80% of the past 15 years, both on the higher end of historical performance. “The buying pressure isn’t limited to one or two time frames,” Goepfert explained. The current level ranks in the top 6% of all readings since 1900, and excluding the tech bubble of 1995-2000, it would be in the top 2%. In the past, extreme upside momentum has sometimes led to sector exhaustion, particularly in utilities, but the Dow itself has generally fared well. Goepfert noted that when the average of rising periods across different time frames exceeded 66%, losses were rare, and the Dow often posted strong gains over the next nine months. Goepfert also highlighted that the Dow has risen at least 60% of the time across daily, weekly, monthly, and yearly periods—a rare occurrence that has only happened six times. While returns following this signal have been mixed, particularly due to the 2018 global financial crisis, these signals have typically been followed by some continued gains, albeit short-lived. In the two instances when the Dow showed both of these signals—once in 1959 and again in 2017-18—the index extended its rise for several months before hitting a period of stagnation. The latter lasted until the market recovery from the pandemic. “The buying pressure across time frames is truly historic,” Goepfert concluded. “While this has generally been a positive signal for the next 6-9 months, the longer-term outlook is less clear. The late 1990s tech boom is the only precedent of sustained momentum, and bulls are hoping the current AI revolution will deliver similar results.