28 September 2026 | Latest available: Weekly Market Recap, 21 September

JPMorgan’s latest weekly recap focuses on the ability of companies to absorb the higher financing costs created by the Fed’s 25bp rate hike. August retail sales rose 1.2%, while import prices increased 0.7% month-on-month, pointing to a resilient economy but persistent inflation pressure.

The bank’s key distinction is between the Mag 7 and the rest of the market. Mega-cap technology companies have significantly stronger interest coverage and balance sheets, giving them greater capacity to keep funding AI investment even as borrowing costs rise. JPMorgan argues that the AI investment cycle is therefore likely to remain intact, while smaller companies and more rate-sensitive sectors face greater pressure.

The wider market is already reflecting the shift. On 25 September, the S&P 500 gained 0.51% and the Nasdaq 0.48%, while the 10-year Treasury yield remained elevated.

For dealmakers, the divergence matters: well-capitalised technology companies retain financing flexibility, while leveraged and smaller companies may face higher funding costs.

Market implications

• Fed has raised rates by 25bp

• August retail sales: +1.2%

• Import prices: +0.7% m/m

• Higher rates favour companies with strong balance sheets

• AI investment remains relatively resilient

M&A / deal flow implications

• Large-cap technology buyers retain significant financing capacity

• Higher rates could constrain leveraged transactions

• Smaller and highly indebted companies may become more attractive restructuring or consolidation targets

3 key takeaways

1. Higher rates are creating a two-speed corporate market.

2. The Mag 7 remains better positioned to finance AI investment.

3. Rate-sensitive companies face increasing financing pressure.