STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA- Sr. Market Strategist
Published on 9/30/26 (a/o 2:00 pm)
DOW 50,854 (-52), S&P 500 7,657 (+6), Russell 2000 2,817 (+20), NYSE FANG+ 19,108 (-14), ICE Brent Crude $102.60/barrel (-$0.93), Gold $4,200/oz (+$13), Bitcoin ~84.9k (+1162)
MAC Desk Commentary:
We flip the calendar and hit the home stretch for 2026. With September officially in the books, we move on to October, the month where legends are made. Speaking of, the Yankees went Bachman Turner Overdrive last night, Taking Care of Business against the Red Sox and moving on to face the Rays. We also say goodbye to Artificial Intelligence and Hello to Super Intelligence, codified in an executive order. Ahead of first pitch, the S&P fell 0.3% on the last day of the month/quarter, while the equal-weight dropped 0.7% and Russell 2000 fell 0.4%. Equites were holding up but sold off in the last half hour of the day as the month/quarter end rebalancing flows kicked in.  That late day selloff actually flipped the S&P 500 negative for the month of September closing down 0.5% but that papers over the 5% decline in the equal-weight and similar declines in small/mid cap indices. Equities had to navigate the surge in yields as rates climbed 40-50bp across the curve, along with sharply higher crude prices. For Q3 the S&P rose 2.0% while the equal-weight and Russell fell ~2%. Energy led in Q3 while the rate-sensitive Utilities- which are increasingly dragged into AI/SI build-out tensions, lagged, along with Industrials. 
As we move into October we also officially exit some of the historical seasonal headwinds during Mid-Term Election years and the 4-year Presidential cycle with a much more favorable backdrop looking forward (see data below).  
That being said, this is not to suggest that it’s all smooth sailing.  Citadel’s Scott Rubner, highlighted that in midterm election years going back through 1930 (longer data set than ours) the Q4 low was only set at the start of the quarter in 4 of 24 instances, while the low has been set in October more than half the time. The median rally from that low into year end has been around 10%.
As often happens the start of the quarter has gotten off to a choppy start, and it feels like rebalancing flows are driving much of the trading. Early on it looked like a continuation of September. Tech was holding up the  S&P 500 following some positive news flow including strong Micron earnings, Alphabet releasing its new Gemini model, Argo and Oracle signing a deal to lease 100k AI chips to Tencent. Oil prices continued to move higher with no end to the conflict in sight. The economic data continued to point to a solid labor market and growth but accompanied by hot inflation. Yields were on the move higher but Treasuries finally caught a bid shortly after the open. In mechanical fashion, tech pulled back from the morning highs while the equal-weight and small/mid-caps started to bounce, the opposite of the flows we (and everyone else) have been highlighting ad nauseum over the last month and change. With yields continuing to move lower throughout the day breadth has improved dramatically. However, as we were putting the finishing touches on today’s note the WSJ reported that  the US had sent a third aircraft carrier to the region and President Trump was planning on resuming bombing in November, which sent oil higher, yields have started to come off the lows while equities have pulled back from the highs.
Energy is leading to the upside. Info tech is up ~1% we mentioned some of the catalysts above. Accenture had strong earnings which has sent the stock sharply higher and pulled the IT Service group up with it. Industrials are up a similar amount with the AI infrastructure exposed companies leading to the upside. Healthcare is down >1% with broad based weakness. Materials and REITs are both down just under 1%. Financials were a significant underperformer early but have improved significantly during the session. 
Quickly looking at the economic data ahead of the open the claims data was slightly better than expected with initial claims remaining below 2k and continuing claims approaching 1.7ml, a level that has not been broken since 2023. After the open the ISM manufacturing survey held steady from last month firmly in growth territory. New orders and employment both improved modestly, though production moderated given supply chain issues but most notably prices jumped sharply. 
The Brent Dec contract is back above $100 and prices have moved up an additional $2 since the headlines.  Metals are mixed with precious metals modestly higher but copper is pulling back. Ag is mostly lower with corn adding to yesterday’s losses. Crypto has moved higher since the open. Bitcoin is testing 85k again. 
Global tech stocks saw sharp gains overnight following Micron’s earnings. Japan ripped to start October as the Nikkei rose over 3% with the big tech names leading: Kioxia +6%, Advantest +10%, Tokyo Electron +6%. Electric motors maker Nidec continued to be under pressure, falling over 10% as the company weathers accounting issues. China was closed for a holiday. Korean exports rose sharply as exports continue to surge. After earlier reports saying SK Hynix was looking to list its solid-state drives (SSD) unit Solidigm, the company said it has yet to make a decision. Yesterday Commerce Secretary Lutnick announced a ~$50B investment by the South Korean government into an LNG pipeline in Alaska. However overnight, South Korean officials said the comments went “far beyond what was agreed to.” Australia was a notable laggard in the region. European equities were under pressure with major indices closing down 1% or more, while US markets were at the lows.  . Financials are the main underperformers, with multiple large banks down 2%. Consumer goods also lagging. In the UK, new PM Burnham discussed closer ties with the EU, including the possibility of returning to the bloc, though it’s not something that would happen anytime soon. In France the government  proposed cost cuts in its new budget proposal, but this has not helped the widening of spreads relative to Germany. 
The focus tomorrow will be on the BLS Employment report.

Earnings
After-Market: NKE

Economic Data:
US:
  • Jobless claims: 197K vs 200K cons, prior 198K
  • Continuing Claims: 1701K vs 1730K cons, prior 1712K
  • ISM Manufacturing: 54.6 vs. 54.6 cons., prior 55
  • Construction Spending: 0.9% vs. 0% cons., prior -0.1%
  • Fed Speakers: Barkin, Collins, Schmid, Williams, Logan (AMC)
Global:
  • Final Manufacturing PMIs
  • Japan Tankan large manufacturers survey: 24 vs 25 cons, prior 22
  • Japan final Manufacturing PMI: 54.1 vs flash 54.1
  • Japan Tankan 1 / 5y inflation expectations: 2.6% / 2.5% vs prior 2.7% / 2.6%
  • Korea Exports y.y: 83.5% vs 61.7% cons, prior 68.7%
  • UK Home prices y.y: 0.8% vs 1.3% cons, prior 1.6%
  • EU Unemployment: 6.4% vs 6.4% cons, prior 6.4%

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