👉 Can Consumers Keep Paying Up?

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Welcome to your new week.

Delta and PepsiCo test how much consumers will pay, Microsoft makes its next AI-PC pitch, and a sharp slowdown in hiring puts the services economy under the microscope.

Key Earnings Announcements:

A slow earnings calendar puts consumer spending in focus.

Monday (10/5): No major U.S. reports scheduled.

Tuesday (10/6): Apogee Enterprises, Constellation Brands, Lamb Weston, Neogen, Penguin Solutions, RPM International, Worthington Steel.

Wednesday (10/7): Applied Digital, Levi Strauss, Resources Connection.

Thursday (10/8): AngioDynamics, Byrna Technologies, Helen of Troy, PepsiCo, Tilray Brands.

Friday (10/9): Delta Air Lines.

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What We’re Watching:

1. Delta Air Lines (DAL)

Delta Air Lines (+21.2% YTD) reports Friday before the open, with shares closing last week at $84.09. Wall Street is looking for $1.88 in adjusted earnings per share on $17.62 billion of adjusted revenue. The stock has already had a strong year, so the bar is higher than simply showing that people are still traveling. Delta needs to prove that strong bookings can translate into stronger profits despite a much more expensive fuel environment.

Last quarter, adjusted revenue rose 13.9% to $17.67 billion on roughly 1% capacity growth, while premium revenue increased 17% and loyalty-related revenue grew 19%. American Express remuneration reached $2.4 billion, up 16%. But fuel expense hit $4.4 billion, nearly $2 billion above the year-earlier level, holding adjusted operating margin to 8.8%. Demand has held up; the bigger question is how much of that strength Delta can actually keep at the bottom line.

The question Friday is how much of that higher fuel bill Delta can recover through fares without sacrificing demand. Watch main-cabin unit revenue alongside premium growth, then the December-quarter booking outlook and whether management keeps its full-year earnings outlook intact. Premium and loyalty have remained major strengths, but this quarter should show whether pricing power is strong enough to offset higher costs without slowing the customer.

• Analysts expect $1.94 GAAP EPS on Revenue of $18.83 billion.

• You can explore the most recent DAL investor release here and here.

2. PepsiCo (PEP)

PepsiCo (-12.3% YTD) reports Thursday before the open, with shares closing Friday at $125.89. Wall Street is looking for $2.28 in GAAP earnings per share on $25.00 billion of revenue. The setup is more complicated than a typical staples report: after cutting prices on key snacks earlier this year to support demand, PepsiCo has now confirmed plans to raise some chip prices again as costs climb.

Second-quarter revenue increased 6.4% to $24.18 billion, but organic growth was a more modest 2.4%. International organic revenue grew 7%, while North American foods revenue fell 2% and North American beverage volume declined 4%. GAAP diluted EPS came in at $2.18. Currency and acquisitions helped the headline sales result, but the domestic business still needs to prove that lower prices can bring consumers back without sacrificing too much profitability.

The planned price increases are not expected until late 2026 or early 2027, so they will not explain results for the quarter that ended September 5. Watch U.S. volumes, how much of the earlier discounting remains in the business and whether management keeps its full-year growth outlook intact. The question Thursday is whether better affordability is finally translating into stronger demand before PepsiCo asks consumers to absorb higher prices again.

• Analysts expect $2.28 GAAP EPS on Revenue of $24.97 billion.

• You can explore the most recent PEP investor release here and here.

Investor Events / Global Affairs:

Microsoft's local-AI pitch, Paramount prepares for Warner Bros integration, and the Texas Stock Exchange's first corporate listings.

• Microsoft Local AI Pitch

Microsoft hosts its Windows and Surface event Wednesday in San Francisco, with Satya Nadella, Windows chief Pavan Davuluri, and Nvidia CEO Jensen Huang expected to appear. The focus is local AI: running more work directly on a PC rather than sending every task to the cloud.

Microsoft has already previewed its Surface Laptop Ultra with Nvidia's RTX Spark platform, but pricing and availability remain outstanding. The commercial question is whether local models and agents give developers and creators a reason to replace their machines.

Watch for firm shipping dates, developer tools, and demonstrations of how Windows manages agent permissions and computing resources. Local execution could reduce latency and keep more data on the device, but those benefits still need to justify the hardware cost. Pricing and availability will matter more than another performance demo.

• Paramount Prepares for Warner Bros Integration

Paramount Skydance and Warner Bros. Discovery expect their merger to close Tuesday, October 6, subject to customary closing conditions. That is the catalyst, not a completed deal. For investors, the debate is about to shift from whether the transaction can get over the finish line to how the combined company will actually operate.

The first personnel move arrives Monday, when former Mattel chief Ynon Kreiz starts at Paramount. Upon closing, he is set to become co-CEO and join the board, overseeing day-to-day management and integration. David Ellison would remain chairman and CEO, focused on strategy, creative direction, technology, partnerships, and capital allocation. The businesses will report jointly to both executives, making the division of responsibilities an early execution test.

Watch the closing announcement for a clear integration timetable and the first concrete decisions on overlapping businesses, streaming distribution, and spending. Combining major entertainment franchises creates options, but a larger content library is not the same as better returns. The useful milestones will be decisions that simplify operations without weakening the programming and talent relationships the company is buying.

• Texas Stock Exchange's First Corporate Listings

The Texas Stock Exchange begins primary corporate listings Monday, October 5, moving beyond the exchange-traded products it began listing in September. Energy Transfer and Sunoco are among the operating companies scheduled to make the move from the New York Stock Exchange. These are listing transfers, not new stock offerings, and their ET and SUN tickers stay the same.

The distinction matters because an exchange can trade securities without winning the company's primary listing. Monday gives the Dallas-based challenger an opportunity to prove it can handle the opening and closing auctions, corporate actions, and issuer services that come with that role. TXSE has specifically asked member firms to test auction orders, execution processing, and the corporate-actions feed ahead of launch.

For investors in the transferring companies, the immediate question is a smooth transition, not a change in the underlying business. For the exchange industry, watch whether unrelated issuers follow and whether trading quality supports the sales pitch. Winning a group of related energy companies is a start; building a durable alternative to NYSE and Nasdaq requires a broader pipeline of listings.

Major Economic Events:

Services activity and consumer sentiment test whether weak hiring is becoming a broader slowdown.

Monday (10/5): Final S&P Global services and composite PMIs; September ISM services PMI; September Employment Trends Index.

Tuesday (10/6): ADP weekly employment update; August U.S. trade balance; Redbook retail sales; October RCM/TIPP Economic Optimism Index; September Logistics Managers' Index; Global Supply Chain Pressure Index.

Wednesday (10/7): MBA mortgage applications; September used-car prices; New York Fed Survey of Consumer Expectations; August consumer credit; September FOMC meeting minutes.

Thursday (10/8): Initial and continuing jobless claims; August wholesale inventories; weekly mortgage rates; Fed balance sheet.

Friday (10/9): Preliminary October University of Michigan consumer sentiment, current conditions, consumer expectations, and inflation expectations.

What We’re Watching:

1. October Consumer Sentiment

The University of Michigan releases preliminary October consumer sentiment Friday, following a September reading of 48.1, down from 51.7 in August. Coming after a weak September payroll report, a flat reading would leave households heading into the holiday shopping season with little confidence in the outlook.

September's damage was concentrated in expectations. That index fell to 46.3 from 51.5, while the current-conditions index slipped to 50.9 from 51.9. Inflation expectations also moved the wrong way: the one-year measure jumped to 4.6% from 4.0%, and the longer-run measure rose to 3.4% from 3.3%. Consumers were becoming more worried about future prices even as their views of personal finances weakened.

The cleanest result for markets would be stronger sentiment alongside cooling inflation expectations. A small headline rebound accompanied by another increase in expected inflation would be less reassuring, because it would leave the Fed with the same tension between household stress and price pressure. Watch the expectations component and the inflation readings together; this is a survey of attitudes, not proof that spending has already fallen.

Economists expect the following:

• Consumer sentiment: 48.1 vs. 48.1 prior

2. September ISM Services

Monday's ISM services report tests whether the economy's largest sector can keep growing while hiring slows. The September forecast cited by CMC Markets is 55.7, up from 55.4 in August and comfortably above the 50-point expansion threshold. After Friday's weak payroll number, the employment component may matter as much as the headline.

August showed a business sector that was busy but reluctant to hire. Business activity rose to 61.7 and new orders reached 60.9, while the employment index stayed in contraction at 47.8. The prices index climbed to 72.6 from 70.3, matching its highest level since August 2022. Firms were handling stronger demand while facing elevated input costs, and that combination had not yet translated into stronger staffing.

A solid headline with firmer employment and lower prices would be the most encouraging mix. A headline beat driven by orders alone, with hiring still below 50 and prices above 70, would leave the growth-and-inflation tension unresolved. The September Fed minutes arrive Wednesday, but Monday's survey will provide newer evidence on whether service businesses are absorbing higher costs or preparing to pass them on.

Economists expect the following:

• ISM services PMI: 55.7 vs. 55.4 prior

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