STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Sr. Market Strategist
Published on 10/08/26 (a/o 2:15 pm)
DOW 51,153 (-27), S&P 500 7,748 (-54), Russell 2000 2,789 (-4), NYSE FANG+ 19,357 (-292), ICE Brent Crude $104.24/barrel (+$4.04), Gold $4,158/oz (+$17), Bitcoin ~80.5k (-2574)
MAC Desk Commentary:
Yesterday the S&P 500 ended the day down 0.2% but rallied off its lows, providing a bit of optimism heading into last night’s Yankee game. That was misguided, as the Rays swept them out of the playoffs. The good thing about an MLB lockout next year is my stress and anger levels should be much lower.

Anyway, while the S&P had a marginal loss yesterday, the equal-weight fared worse (-0.8%) and smaller cap stocks were hit even harder (Russell 2000 down over 1%). That weakness occurred even with yields and oil not moving a lot overall. Healthcare was the standout performer (DRG pharma index +1.7%), and Consumer Discretionary and Staples were the only other sectors higher. Industrials, Materials and Real Estate were down 1-2%. 

The Yankee loss contributed to a sour mood overnight for global equites. On top of that, oil jumped on more stories of Middle East escalation. Reports continued to discuss the US military preparing for renewed strikes on Iran, but potentially before the mid-terms. The general thinking was this would happen after the US elections. There were also new strikes on tankers in the SOH and reports on ship transits through the Strait falling back markedly.

S&P futures traded down but moved off the lows as we approached the Open. The cash index opened down 0.3% but began to climb soon after, but stalled just below 7800. The index retreated, back-filling Tuesday’s gap up. Around noon, President Trump posted that “we will not be attacking Iran at any time prior to the Midterm Elections.” He added that the US is having productive discussions, and that Iran will not have a nuclear weapon. Stocks jumped initially back up to ~7800 but quickly gave it all back. We then fell further after the FT reported that OpenAI’s annualized revenues are $20B less than previously thought ($50B versus $70B). That took the Tech sector lower right away.
We fell further, now down ~0.8% despite oil coming off its highs and long-end yields moving to session lows. The equal-weight is positive and outperforming as the large cap tech names get hit. The Russell 2000 is now also outperforming after lagging earlier, though still down. The dynamics are largely the opposite of yesterday. The S&P Small and Mid Cap indexes are higher.
Energy is leading along with Consumer Staples, which accelerated to the upside as Tech weakened on the OAI news and yields continuing to come in. That has also helped Utilities and REITS strengthen. Tech is lagging as semis get hit (DRAM -5%, ICE Semis -4%). Software is mixed but ORCL’s 5% decline is weighing on the group. 

Adding to the OAI news, Bloomberg reported earlier that the IPO of Australian data center developer Firmus (backed by NVDA) is on shaky ground as investors grow more cautious. The news comes in the midst of a growing wave of giant financing deals to procure chips and build giant data centers. Last night the WSJ reported Broadcom was planning a new, $50B financing deal for OpenAI’s custom chips. ORCL was also reported to be in talks for another big chip financing, and that was just after news SPCX was discussing a $40B raise for NVDA chips. In more AI/SI news, GOOG (-1%) introduced their Gemini agent earlier this morning, joining META’s Muse (-1%). GOOG strengthened in pre-market trading on the news but pulled back. Also, President Trump disclosed more than 500 securities transactions in August, including purchasing up to $25M of META and up to $5M in SPCX. 

In other corporate news, the FT reported that Starbucks (-4%) has explored acquiring Chipotle (+8%)- the company that current SBUX CEO used to lead. US officials announced several companies were suspended from the PERM H-1B visa program for alleged abuse of the program, including MSFT (-2%), ADBE (+1%), CTSH (+3%) and INFY (-1%). 
Yields have been interesting today. They weren't doing much earlier despite the sharp rise in oil. CNBC noted a surge in call options activity on both the TLT long-term treasury ETF (down ~10% YTD) as well as the XLU utilities ETF- which would stand to rally if rates decline. Fed governor Waller spoke early this morning and toed the line between Hawks and Doves, noting additional rate hikes were likely needed to bring inflation down to target in a timelier manner, though the pace need not be overly urgent. The long-end has been moving lower throughout the morning and the short-end then began to catch up. Overall the curve has flattened with the 2y down 3bp and 10/30y down 5-6bp.
Jobless claims this morning continued along their trend. The 30y auction tailed by 0.1bp, following a very strong 10y auction yesterday. The Atlanta Fed GDPNow estimate for Q3 ticked down from 3.7% to 3.6% after today’s update. The US Dollar Index has followed yields lower.

  • US 2yr -3bps to 4.75%, 5yr -4bps to 4.99%, 10yr -5bps to 5.23%, 30yr -6bps to 5.61%
  • USD index: -$0.12 to $101.90 
Looking globally, Asian equities were broadly lower. The Nikkei fell over 1%. Japan’s Topix index will enter the second phase of a multi-year restructuring, with the index potentially shedding ~40% of constituents by July 2028, unless stricter inclusion criteria are met. A solid 30y bond auction helped pull yields lower. In China, Shanghai fell almost 1% as the mainland resumed trading after the extended Golden Week holiday. The Hang Seng fell over 1%. South Korea’s KOSPI fell over 2%. Samsung (-2%) reported operating profit 9x’d this quarter, but top line missed estimates. SK Hynix has reportedly chosen lead banks for a potential US IPO of its Solidigm segment next year. A $10B raise at a valuation of $100B have been noted as early targets. In Taiwan, exports surged 61% y.y in September, versus 41% last month. European equities were also lower. Financials were under pressure, with large banks down 1-2%. Pharma got hit as well (Roche, AstraZeneca, Novartis, GSK down 2-3%. Energy led, moving with oil’s spike, with yields higher across the region as well. The UK managed to trade around unchanged but slipped back into the red into the close. Germany underperformed and the DAX closed below its 200d ma after gapping down at the open. German trade data showed exports weaker than expected, falling ~1%. Europe and China have begun trade negotiations as tensions rise from the increasingly imbalanced positions of the two parties.
Brent crude is up 4%, a little off its highs. US natural gas is lower. The inventory build was higher than expected and rose 20Bcf from last week’s build. Metals are mixed. Gold is modestly higher, hovering ~$4150. It tested $4100 at the lows yesterday. Silver is down ~2% and copper has moved lower as well. Ag is mixed ahead of tomorrow's WASDE report. Bitcoin and Ether have weakened significantly, now down 3-6% following weakness yesterday. Bitcoin is testing its 50d ma ~$80.7K while Ether broke below its 50d ma.
The calendar is light tomorrow. The latest Univ of Michigan sentiment survey, WASDE ag report and weekly rig count will be the modest data releases. Delta will report earnings tomorrow morning.  
Earnings
  • After-Market: ODC, PKE
  • Pre-Market (Friday): DAL

Economic Data:
US:
  • Initial claims: 197K vs 200K cons, prior 197K
  • Continuing claims: 1,716K vs 1,710K cons, prior 1,701K
  • Wholesale Inventories m.m: 0.5% vs 0.7% cons, prior 1.4%
  • Natural Gas inventories: 85Bcf vs 79Bcf cons, prior 64Bcf
  • Atlanta Fed GDPNow update: 3.6% vs prior 3.7%
  • 4:30pm Federal Reserve balances
Global:
  • Australia Consumer Inflation Expectations: 5.3% vs prior 4.9%
  • Taiwan Trade Balance: $23.63B vs prior $22.3B
  • German Trade Balance: €19.5B vs €19.0B cons, prior €21.6B
  • Mexico core CPI y.y: 3.75% vs 3.79% cons, prior 3.88%

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