Market Review October 16: Nikkei and KOSPI Rise, UST Yields Pull Back, and TSMC Margin Decline
On Friday, October 16, 2026 (data as of 14:20 Almaty time / UTC+5), global markets rebounded after yesterday's crash. The main trigger for the reversal was the dovish comments from Fed Chair Kevin Warsh, who declined to support further tightening despite "hot" macro data.
On Friday, October 16, 2026 (data as of 14:20 Almaty time / UTC+5), global markets rebounded after yesterday's crash. The main trigger for the reversal was the dovish comments from Fed Chair Kevin Warsh, who declined to support further policy tightening despite "hot" macro data. Against this backdrop, the probability of an October rate hike plummeted to 15%, Asia closed the session in the green, although KOSPI's weekly losses (−14.5%) were the worst since 2008.
Fed and Rates: Easing Rhetoric and UST Yields Pullback
Expectation Reversal: Data on producer inflation (PPI +1.3% m/m) and retail sales (+0.8%) showed a spike driven solely by a surge in energy prices (+10.8%). Analyzing the data structure allowed the regulator to consider this factor one-off, lowering the probability of an October rate hike from 46% to 15%.
Currencies and Debt Market: The 10-year Treasury yield retreated from peaks to 5.05–5.09%, and the dollar index weakened for the second consecutive day, giving risk assets some breathing room.
Stock Market: Asia Rebounds, TSMC Reports Record Earnings, Indonesia Falls
Recovery in Asian Markets: KOSPI gained +2.05%, and Nikkei 225 added +898 points thanks to rallies in Tokyo Electron and SoftBank. A separate shock occurred in Indonesia — the Jakarta index plunged −11% (the largest since 1998) amid MSCI's proposal to downgrade the market to standalone status.
TSMC Paradox: The company reported a 68.7% year-on-year jump in net profit (NT$763 billion), yet its ADR fell by −1.80%. The market focused on the decline in gross margin from 67.7% to 66.4%, seeing this as a sign of rising financing costs.
| Index / Stock | Level / Close | Change for the Day |
|---|---|---|
| KOSPI (Seoul) | 5,668.05 | +2.05% |
| Nikkei 225 (Tokyo) | 65,324.29 | +1.39% (+898 pts) |
| Jakarta Composite | — | −11.00% (Crash) |
| Dow Jones (USA, Thu) | 52,177.69 | +1.08% |
| TSMC ADR (USA, Thu) | $422.25 | −1.80% |
Commodities: Oil Holds $105–106 and Gold Sideways
Commodity Section: Brent crude consolidates near weekly highs ($105–106) — Middle East geopolitical premium restrains downside attempts despite reserve releases. Gold fluctuates within the $4,150–4,200 range for the fourth consecutive session.
Gold Outlook: Despite the weakening DXY and UST yields pullback, the metal still lacks momentum to break above the upper boundary of the $4,200 range.
Calendar and Key Points (October 16, Almaty Time)
| Time / Date | Event / Release | Status / Importance |
|---|---|---|
| 18:30 | US Stock Market Opening (NYSE / Nasdaq) | High |
| Afternoon | Position Fixing Ahead of Week Close | Medium |
| October 27–28 | FOMC Meeting on Fed Interest Rate | Main Risk |
What Traders Should Watch:
- Sensitivity to Fed Rhetoric: The amplitude of rate hike expectations (21% → 46% → 15%) shows that regulator speakers move the market more than statistics. Follow their speech schedule closely.
- Friday Fixing Risks: Profit-taking is possible in the second half of the US session. Given the week's extreme amplitude, sharp moves on thin volumes are likely by evening.
- YouTrade Discipline: Margin load limit is 70% of the deposit. Trading within ±3 minutes around high-importance news (including order and stop-loss triggers) is prohibited.