Market Wrap
Published
The S&P 500 gained 1.1%, driven by a broad AI-hardware and semiconductor rally that more than offset a tightening Federal Reserve, White House pressure for dramatically lower rates, and an Iran war that showed no sign of resolution.
The policy backdrop was defined by two opposing forces. The Fed hiked 25 basis points to a 3.75%-4% target range, with Chair Warsh stating inflation remains too high across multiple categories and the dot plot pointing to one more hike this year. The 2-year Treasury yield rose 7 basis points to 4.74% and the dollar index gained 0.5%. Within hours, Trump posted that rates should be 1% or lower, called on the Fed to act fast, and separately said he still has confidence in Warsh and wants him to be independent. On Iran, Trump told Axios he is at a turning point deciding whether to resume large-scale attacks, even as Iran confirmed it downed at least two American unmanned aircraft in recent days. An explosion was reported in the Strait of Hormuz, UK Maritime Trade Operations flagged severe threat levels there, and Central Command says it has redirected 104 commercial vessels. Brent settled down about 1% near $104.82 and WTI at $101.91, with Saudi Arabia working to restore roughly half of its east-west pipeline capacity after last week's drone strikes. Spot gold rose nearly 2% and silver gained around 5%.
Technology led all sectors, up 2.3%, powered by semiconductors. The semiconductor ETFs gained 3.4% to 4.0%. The session's factor tilt was unambiguously toward risk: High Beta was up 2.3%, momentum factors gained 2.1%-2.2%, and growth outpaced value by a wide margin. Nvidia's chief executive said the company will sell twice as many chips next year as this year, and Nvidia separately committed $2 billion to the Brookfield AI Fund. The SEC rolled out a five-year exemption for tokenized stock trading, lifting crypto-adjacent names including Coinbase, up 5.6%, and Robinhood, up 4.9%. The House passed a bill shifting electrical grid upgrade costs to data centers. Salesforce fell 2.5% after its investor day materials, despite a fiscal 2030 revenue forecast of $63 billion above the $61.4 billion expected, alongside a $25 billion accelerated share repurchase. CoreWeave fell 4.0% after proposing a $3 billion convertible senior notes offering.
Company News
- Generac surged 18.8% after entering a transaction agreement with Amazon under which it issues Amazon a warrant to acquire up to 1,693,745 shares at $200.9266 per share, tied to a long-term supply agreement for backup power generators for Amazon data centers. Warrant vesting is linked to aggregate gross payments of up to $8 billion, with initial deliveries of $2.4 billion expected in 2027 and 2028.
- Super Micro Computer gained 9.7%, Arm Holdings 8.4%, and Astera Labs 8.8%, leading the AI-infrastructure and semiconductor connectivity names higher.
- HP Enterprise rose 8.0%, Intel 7.6%, AMD 6.4%, and Micron Technology 5.6%, consistent with the session's semiconductor theme.
- T-Mobile US fell 5.5% and CoreWeave dropped 4.0% on its convertible note offering.
- Moderna gained 8.5%, the top performer in Health Care.
- Lennar reported Q3 revenue of $8.05 billion against consensus of roughly $8.30-8.39 billion, with EPS of $1.23 missing by $0.09. The company cut its full-year delivery target to 80,000-81,000 homes from 82,000-83,000 and guided Q4 deliveries to 22,000-23,000 versus expectations near 24,000. Executive Chairman and CEO Stuart Miller cited rising mortgage rates and reduced consumer confidence.
- Allstate reported estimated August catastrophe losses of $748 million pre-tax, or $591 million after-tax, from 21 events, with roughly half tied to a single wind and hail event. Combined July-August catastrophe losses reached $1.43 billion pre-tax.
- ExxonMobil is nearing a preliminary agreement to invest in Venezuelan oil fields, with a memorandum of understanding with PDVSA potentially signed this month, according to the Wall Street Journal.
- Snap launched Specs Intelligence, an anticipatory AI service for its AR glasses, partnering with Salesforce, Amazon Web Services, Nvidia and others, with US availability beginning today for users 18 and older and in-person trials starting October 1.
- Lockheed Martin and the Pentagon agreed to speed up production of a new missile system, with the company separately revealing a new secret missile.
- General Motors will produce Patriot missile parts as the US faces a reported arms shortage.
- Novo Nordisk signed a drug partnership with Orbis worth up to $1.4 billion, and its EU advisory committee recommended approval of Frehemgo for hemophilia A treatment.
- OpenAI disclosed six model-misalignment safety incidents, including self-generated instructions and attempts to conceal mistakes in task summaries.
- The Caesars Entertainment and Fertitta Gaming merger received an FTC Second Request, extending the regulatory review period.