The Week Ahead: Fed September Minutes, PepsiCo and Delta Earnings in Focus

Fed September Meeting Minutes Ahead

On Wednesday (October 7), the Federal Reserve will release the minutes of its September 15–16 FOMC meeting at 2:00 p.m. Eastern Time. This is the most important macroeconomic event of the coming week.

At its September meeting, the Fed decided to raise interest rates by 25 basis points and noted in its policy statement that U.S. economic activity has continued to expand at a solid pace, with resilient domestic spending, strong capital investment, and employment growth broadly matching labor supply, though inflation remains elevated.

Compared with the policy statement, the meeting minutes will provide more detailed insights into internal discussions. Markets will focus on three key questions: how officials gauge the persistent impact of rising energy prices and other costs on inflation, whether more committee members believe current interest rates remain insufficient to curb price pressures, and what economic data would be required to trigger another rate hike.

The September Economic Projections showed a median forecast for PCE inflation of 3.7% at the end of 2026, core PCE at 3.4%, and a median federal funds rate forecast of 4.1%. Therefore, if the minutes show that a majority of officials still view inflation as the primary risk, markets may continue to hold expectations of another rate hike in October or December; conversely, if officials show significantly greater concern over employment and economic growth, expectations for subsequent rate hikes could be constrained.

U.S. September ISM Services Index Release Ahead: Price and Employment Sub-Indices in Focus

On Monday (October 5), the Institute for Supply Management will release the September ISM Services PMI. Official ISM schedules confirm that the September data will be released at 10:00 a.m. Eastern Time that day.

The August ISM Services PMI came in at 55.4, up from 54.1 in July, marking its 26th consecutive month in expansion territory above 50. Among the components, the business activity index rose to 61.7 and the new orders index climbed to 60.9, indicating that demand in the services sector remains robust.

However, two sub-indices in the report warrant special attention. The August services employment index stood at just 47.8, remaining in contraction territory for a second straight month; meanwhile, the prices paid index rose to 72.6, its highest level since August 2022.

This indicates that the U.S. services sector currently presents a combination of "strong demand, weak employment, and elevated price pressures." Consequently, if September data continues to show the price index above 70 while the employment sub-index improves again, it could reinforce the view that the economy remains resilient with persistent inflationary pressures, supporting expectations for further Fed rate hikes.

PepsiCo Earnings to Test U.S. Food and Beverage Consumption, North American Performance Is Key

Before the U.S. market opens on Thursday (October 8), PepsiCo will report its fiscal third-quarter 2026 results. The company confirmed it will release earnings materials at approximately 6:00 a.m. Eastern Time, followed by an analyst Q&A call at 8:15 a.m.

In the second quarter, PepsiCo achieved net revenue of $24.181 billion, up 6.4% year-over-year, with organic revenue growth of 2.4% and core EPS up 4% year-over-year. At that time, the company maintained its full-year guidance for fiscal 2026.

For the third quarter, the market will focus closely on volume trends, pricing power, and profit margins at PepsiCo Foods North America and PepsiCo Beverages North America. While the company's international performance was relatively strong previously, North American consumers are more sensitive to food and beverage prices, making an improvement in U.S. volumes a key focus of this report.

In addition, investors will watch whether earlier initiatives—such as portfolio adjustments, sugar-free beverages, functional foods, and cost-cutting measures—can boost North American business growth. Further gains in volume and organic revenue would suggest that U.S. consumers are adapting to price adjustments on food and beverages.

Delta Air Lines Earnings Take Center Stage: Airline Demand and High Oil Prices in Focus

On Friday (October 9), Delta Air Lines will report its third-quarter 2026 financial results and hold an earnings conference call at 10:00 a.m. Eastern Time.

The company's second-quarter performance beat its previous guidance, and it projected year-over-year revenue growth in the mid-teens percentage range for the third quarter, while reiterating its full-year targets for adjusted EPS of $6.50 to $7.50 and free cash flow of $3 billion to $4 billion.

In this earnings report, the market will focus closely on domestic and international route demand, corporate and premium passenger revenue, ticket prices, and unit costs.

Meanwhile, with global oil prices recently staying at elevated levels, jet fuel costs have re-emerged as a critical variable. Investors will focus on whether higher oil prices significantly eroded third-quarter margins and whether the company can mitigate the impact of fuel price volatility through ticket pricing, capacity adjustments, and its oil refinery operations.

If travel demand remains strong and the company maintains its full-year earnings guidance, it would indicate that U.S. consumer spending on services remains resilient. However, if fuel costs rise rapidly or booking demand begins to weaken, earnings expectations for the airline sector may face readjustments.

Monday (October 5)

Key Events: US September ISM Services PMI

The US will release its September ISM Services Index.

The market will focus on headline PMI, new orders, employment, and prices paid indices. The August Services PMI was 55.4, but the prices paid index reached 72.6, keeping the inflation sub-index as the main focus of next week's data.

Tuesday (October 6)

Key Events: US August Trade Balance, Constellation Brands Earnings

The US will release its international trade data for August. The US Census Bureau confirmed that the data will be published at 8:30 a.m. ET.

On the corporate front, Constellation Brands will report its fiscal second-quarter 2027 earnings after the US market close. Investors will focus on US market sales of beer brands such as Modelo and Corona, consumer demand, and full-year earnings guidance. The company has confirmed its earnings release after market close on October 6.

Wednesday (October 7)

Key Events: Fed September Meeting Minutes, Levi Strauss Earnings

The Fed will release the minutes of its September FOMC meeting at 2:00 p.m. ET, with the market focusing on further clues regarding interest rate policy for October and by the end of the year.

An hour later, the Fed will release consumer credit data for August.

After the US market close, Levi Strauss will report its third-quarter financial results, with the market closely watching US apparel consumption, DTC sales, profit margins, and full-year guidance.

Thursday (October 8)

Key Events: PepsiCo Earnings

The US will release initial jobless claims for the week, providing the latest high-frequency data to judge labor market conditions.

The US Census Bureau will also release wholesale sales and inventories data for August at 10:00 a.m. ET.

On the corporate front, PepsiCo will report its third-quarter results before the US market open. North American food and beverage sales volume, organic revenue growth, and full-year guidance will be key highlights in the consumer sector.

Friday (October 9)

Key Events: October University of Michigan Consumer Sentiment, Delta Air Lines Earnings

The US will release the preliminary October University of Michigan Consumer Sentiment Index, alongside 1-year and long-term inflation expectations. Consumer sentiment fell to 48.1 in September, making it worth watching whether it declines further in October.

On the corporate front, Delta Air Lines will release its third-quarter results. Travel demand, airfares, fuel costs, and full-year earnings guidance will serve as key indicators for airline stocks.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.