STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 9/16/26 (a/o 1:15 pm)
DOW 51,787 (+325), S&P 500 7,633 (+82), Russell 2000 2,889 (+30), NYSE FANG+ 18,735 (+269), ICE Brent Crude $104.52/barrel (-$1.31), Gold $4,401/oz (+$13), Bitcoin ~76.8k (+897)
MAC Desk Commentary:
Yesterday, for the first time since July 2023, the FOMC unanimously hiked rates by 25bps, which the Committee said “will support a timelier return” of inflation to their stated 2% target. The Summary of Economic Projection had a dovish tilt. The Committee projected inflation to ease significantly next year, largely in line with the June SEP, but it was notable that the Committee does not see core returning to target until 2029, which stretches the meaning of “timely”.  The DOTS showed broad support for an additional hike this year but for rates to hold steady throughout 2027. Chair Warsh’s press conference was short, ending abruptly at the 30 minute mark, and a bit more hawkish. The Chair suggested that the rate hike comes at a time when the economy seems to be strengthening and reiterated, “I would be hard-pressed to describe broad financial conditions as restrictive. This view was widely shared by the Committee. So, we removed a dose of accommodation.” This seems to suggest that the Committee is looking to unwind some if not all of the late 2024 cuts. Yields were lower ahead of the decision but reversed sharply. There was a flattening of the curve with the 2yr up ~7bps, a ~14bp reversal from the lows. The long end also ended off the lows closing around unchanged. Equities gave up early gains selling off during Chair Warsh’s press conference. The S&P 500 was down ~1% at the lows testing its 100d ma before bouncing in the final 30 minutes of trade to close the session down 0.4%.

Futures moved higher throughout the overnight session driven by some geopolitical optimism and some positive corporate updates reinvigorating the AI trade. On the geopolitical front, President Trump is reportedly going to meet with Gulf leaders on the sidelines of the UN meetings next week, there are reports the East-West pipeline could come back on line in the coming days and reports that China has privately pushed Iran to throttle back the Houthis. Oil prices have bounced from the overnight lows after reports of more Russian oil refinery shutdowns. The pullback in oil also sent Treasury yields down >5bps across the curve. The S&P 500 gapped up ~1% trading just above yesterday’s highs and the 50d ma (~7,615) and has been consolidating in a tight range since. There are broad based gains but tech is doing much of the heavy lifting. The NYSE 100 index is up nearly 2% while the ICE Semiconductor index is up >3%. There also seems to be a revival in many of the favorite retail thematic trades like quantum, space, rare earths and nuclear.
Withing the S&P 500 9 of 11 sectors are higher. On the AI front, there have been positive demand updates at investor conferences from chip companies (ARM/NVDA) and companies exposed to the data center buildout (ETN). Neoclouds moved higher after reports of price increases and new customer announcements (NBIS/CRWV/BTDR). Generac (~20%) is also rallying sharply after announcing a supply agreement with Amazon. AI chip/hardware stocks are driving most of the gains within the info tech sector which is up ~2%. Software was under some pressure at the open but cyber stocks are higher after the Open AI disclosure of six new examples of misaligned behavior. The sector also bounced after CNBC’s David Faber said that Workday take private financing efforts were still ongoing. Consumer discretionary is up nearly 2% as well with Amazon and Tesla accounting for pretty much all of the gains. Auto-related are some of the best performing stocks within the sector helped by the pullback in oil/yields and after reports the EU may limit the import of China EVs.  Staples, energy and financials are underperforming hovering around unchanged.
This morning’s claims data continued to point to a strong labor market with initial claims falling back below 200k and continuing claims falling to 1.73ml from 1.78ml last week. The housing related data disappointed with building starts, housing starts and pending home sales all coming in a bit light. The Philly Fed index gave back some of the big jump last month with a moderation in new orders and employment while price components moved higher. Treasury yields are near morning lows down ~7bps across the curve. The USD index hovering around unchanged.

  • US 2yr -5bps to 4.69%, 5yr -8bps to 4.81%, 10yr -7bps to 4.95%, 30yr -7bps to 5.30%
  • USD index: -$0.00 to $99.98
European indices closed near session highs up between 0.5% - 1%. There were pretty broad-based gains with autos some of the best performing. The BOE held rates as expected with a hawkish lean and updated its plans to unwind gilt holdings. Longer tenors are down over 10bp on the news. In Asia, Japan’s Nikkei rose 0.3% with broad gains, though tech saw some pressure. The US and Japan are discussing plans for building a ~$15B semiconductor factory in the US as part of the $550B investment agreement the two sides came to during the tariff negotiations. The factory would be operated by Global Foundries (+5%).  Mainland China and Hong Kong were both lower. Huawei unveiled next-gen AI chips at its conference, taking aim at NVDA, AMD and INTC.
The energy complex has reversed much of this morning’s weakness. ICE Brent is only down ~1% while gasoline and natural gas prices are now higher. Precious metals are recouping yesterday’s post Fed selloff. Copper is  outperforming up >2%. Ag is pulling back. Crypto has a bid. Bitcoin is up ~1% trading just under 77k while Ethereum is outperforming up ~2.5% trading just under 2,500 again.  After the failure of the Clarity Act the SEC laid out the regulatory framework for certain trading venues to issue tokenized stocks, if certain requirements are met which include the tokens retaining the same rights as the equity and companies must be able to opt out. 
There are a couple of catalysts ahead of us as we wrap up the week. Overnight the BOJ to announce a rate hike along with the release of inflation data. In the US the economic data includes industrial production and leading indicators. Tomorrow is a very big liquidity event as it is the quarterly index rebalances and the revival of quad witch expiration (from triple witch), as single stock futures have started trading again.

Economic Data:
US:
  • Building Permits: 1.394 vs. 1.41ml cons., prior 1.433ml
  • Housing Starts: 1.275ml vs. 1.31ml cons., prior 1.239ml
  • Initial Claims: 196k vs. 208k cons., prior 206k
  • Continuing Claims: 1.73ml vs. 1.78ml cons., prior 1.774ml
  • Philly Fed: 37.8 vs. 30.5 cons., prior 47.4
  • Pending Home Sales: 0.2% vs. 2% cons., prior -2.3%
Global:
  • Bank of England: Rates left unchanged 3.75%

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