Market Wrap
Published
The S&P 500 gained 0.5%, with equities shrugging off a sharp overnight and intraday drop in oil prices as hopes for a US-Iran de-escalation over the Strait of Hormuz built through the session, even as Treasury yields pushed to multi-decade highs and Fed officials warned inflation risk remains live.
Crude fell hard, with WTI settling at $92.41 a barrel, down 2.33%, and Brent settling at $104.32, down 2.14%, as signals of a possible Hormuz off-ramp accumulated. Iran's foreign minister said Tehran presented a new proposal to reopen the strait and restart talks, giving Washington seven days to meet unspecified conditions, while President Pezeshkian said Iran has not closed the strait and wants to revive its ceasefire framework before the November midterms. A US official said nearly 40 million barrels transited Hormuz in the past 48 hours and that Washington feels no urgency to strike a deal. Other Iranian sources struck a harder line, with one senior official telling Reuters the strait will stay shut and no nuclear talks will happen until Iran's conditions are met, underscoring how mixed the signals remained even as markets traded the optimistic version. Trump and Xi Jinping wrapped a state visit describing the relationship as constructive, with plans for tariff exemptions on agricultural, medical and low-tech goods and details due Monday; further meetings are set for November in China and December's G20 in Miami. Despite the equity rally, bond markets sent a starkly different signal. The 10-year Treasury yield hit a fresh 19-year high near 5.23%, and the 30-year broke above 5.5% for the first time since 2004. Fed's Hammack said the biggest risk is an inflationary mindset taking hold and that underlying inflation is likely above target, while Fed Chair Williams said the central bank cannot ignore persistent supply shocks even though the labor market itself isn't adding to inflation pressure. Fed's Schmid called US debt levels "extreme" and questioned whether the AI buildout is becoming too big to fail. August durable goods orders were unchanged, beating the expected 0.3% decline, and September Michigan consumer sentiment came in at 48.1, above the 47.5 expected.
Technology led sector gains, with the XLK up 0.8% on broad semiconductor strength: Qualcomm rose 4.1%, Microsoft gained 3.7% on the back of new Copilot and Agent 365 features, and Analog Devices, Lam Research and Texas Instruments each added around 3%. Industrials rose 0.9%, led by Generac, up 5.2%. Financials gained 0.5% broadly, led by Capital One and Huntington Bancshares, while Cboe Global Markets fell 3.6%. Energy was the sole sector decliner, with the XLE down 0.9% as Devon Energy, Talos Energy and Helmerich & Payne each fell more than 2.5% alongside the crude selloff. Real estate slipped 0.3%, with Equinix down 2.6%. Within mega-cap growth, Meta Platforms was the weakest large name, down 3.3%.
Company News
- Akamai Technologies surged after unveiling an $11.6 billion multi-year cloud agreement with Anthropic, expandable to roughly $20 billion, alongside hardware deals with Jabil and Lenovo; the company expects a $1.7 billion increase in 2026 capital expenditure but no change to revenue guidance.
- Costco Wholesale reported fiscal fourth-quarter earnings of $6.60 a share excluding tariff benefits, missing estimates by $0.06, on revenue of $95.72 billion versus $96.76 billion expected; it also disclosed $184 million in tariff refunds for the quarter.
- Blue Origin raised $10 billion at a $140 billion valuation in its first outside funding round, with Jeff Bezos contributing $2 billion.
- BASF confirmed preliminary talks to acquire chemicals rival Evonik, with the outcome still open.
- Corteva's Vylor seed and genetics spinoff received SEC clearance, with distribution to shareholders expected before October 1 and NYSE listing under ticker VYLR.
- SK Hynix's Solidigm unit is reportedly targeting a 2027 IPO at a $150 billion valuation.