Market Wrap
Published
The S&P 500 slipped 0.1%, a muted headline number that masks a market split cleanly along geopolitical risk lines. Energy surged 1.5% as the Strait of Hormuz crisis deepened, with Iran's Revolutionary Guard reporting a third supertanker hit and a container vessel separately struck by an unidentified projectile while transiting the strait. WTI settled up 2.1% at $93.74 and Brent rose 1.8% to $106.65. Technology bore the brunt of the risk-off rotation, with the sector down 1.2% as optical and networking names were hammered: Ciena fell 10.2%, Lumentum 9.7%, Coherent 7.7%, Credo Technology 7.2% and Fabrinet 6.7%. Semiconductor ETFs including SOXX and XSD dropped more than 2.5%.
Riyadh added to the unease, with Saudi authorities issuing an early warning for a hostile threat and witnesses reporting three explosions in the city before authorities said the danger had passed. Gulf Air extended flight cancellations to Riyadh through October 17 and Delta pushed back its Atlanta-Riyadh route to March 2027. Meanwhile the Russia-Ukraine "energy ceasefire" that Trump floated unraveled through the day, with Zelenskiy saying Moscow hit six Ukrainian energy facilities and that it is increasingly clear Russia won't accept the proposal. Trump's envoys Witkoff and Kushner separately told Ukrainian officials that Putin is unwilling to negotiate, even as Trump said he still believes Putin is ready for a deal.
On policy, Fed Governor Hammack repeatedly argued current policy isn't restrictive enough and that rates need to move higher, framing the question as how fast to tighten rather than whether to, while describing business conditions as generally strong to booming but noting low-income contacts are now juggling which bills to pay.
Financials gained 0.5% on broad strength across insurers and banks, Consumer Staples rose 1.2%, and Real Estate added 0.6%. Health Care climbed 0.7%, led by Molina Healthcare, Medtronic and Zimmer Biomet, while Bristol-Myers Squibb jumped sharply intraday. Industrials were roughly flat and Consumer Discretionary fell 0.5%, with Chipotle down after the company declined to comment on market speculation.
Company News
- Meta Platforms rose 3.4% after launching Muse Wonder, an AI model Mark Zuckerberg says reaches frontier-level performance in coding, financial and legal tasks, powering a subscription version of its Muse assistant.
- Amazon is reportedly in talks to acquire AI startup Decart for around $7 billion.
- Bumble is in advanced talks to go private at a $1 billion valuation, with a deal possible as soon as this week.
- Albertsons is seeking $8 billion from Kroger following the collapse of their proposed merger.
- Bank of America upgraded Salesforce to buy with a price target hike to $285 from $160; shares rose 2.0%.
- Jefferies raised its Tesla price target to $400 from $350; Tesla fell 1.2%.
- Raymond James upgraded T-Mobile to Outperform.
- Universal Health Services swung sharply intraday after an early reported drop.