STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 9/15/26 (a/o 2:15 pm)
DOW 51,906 (-516), S&P 500 7,582 (-38), Russell 2000 2,870 (-22), NYSE FANG+ 18,465 (-204), ICE Brent Crude $108.35/barrel (+$2.67), Gold $4,319/oz (-$33), Bitcoin ~76.1k (-2696)
MAC Desk Commentary:
Yesterday the AI trade came under pressure after Anthropic’s CEO called for slowing down the pace of AI development in order to ensure innovation proceeds safely. Chips and related groups came under heavy pressure (DRAM, ICE Semis down ~5%). Software however got a boost (IGV +5%). The Trump administration pushed back on that call, saying it would only benefit China. China, for its part, said it harkened back to the Cold War playbook- the good ‘ole days. White House advisor David Sacks joined the administration’s pushback. He agreed that AI companies are subject to liability for their models and was against granting those companies antitrust waivers to coordinate safety protocols. White House Advisor Kevin Hassett chimed in as well this morning, telling CNBC its not an antitrust issue for AI firms to warn each other. Meanwhile oil continued to march higher as did yields, with the 10y hitting 5.0% for a moment. Equity losses were relatively mild given the sharp tech moves. The S&P 500 fell 0.5%, equal-weight was up marginally, and the Russell 2000 fell 0.4%.

The S&P opened slightly lower today and weakened throughout the morning, eventually falling below 7600: the 50d ma and the lower boundary of the past month’s trading range we’ve been noting.  The index is currently looking for support at the July highs ~7580. The equal-weight is about inline while small caps lag.
Energy resumed leadership today as oil strengthened around the Opening Bell. It's also the only sector substantially in the green. Consumer Discretionary is lagging with broad weakness in retail and travel/restaurant stocks, while AMZN is down ~2%. Comm Services (broadly lower but some telecom higher), Financials (asset managers, exchanges, crypto lagging) and Utilities are down similarly. Tech is seeing a modest reversal of yesterday’s action, with semis/memory bouncing a little while software sheds a little of its gains. The mega caps have retreated to their lows of the day. META (flat) will release the next-generation of its in-house AI chip (Astrid) at the end of 2027, according to Bloomberg. Chip partner AVGO is down 2% while Nvidia is flat. CRM (+0.3%) is hosting its Dreamforce conference beginning today.

Looking at some of the high-beta baskets, Quantum names are down 1-2%. Genomics stocks are strong today (ILMN +7%) with some broker healthcare conferences providing steady news flow.  Neoclouds are down as yesterday’s weakness continues. 
Ahead of tomorrow’s Fed decision, Treasury yields pulled back from their highs and were around flat, with the 10y just below 5.0%. After very strong auctions last week, today’s 20y auction was soft tailing by 2bp, which sent yields higher though they are coming off the immediate pop. As we publish this Treasury Secretary Bessent is still in front of the House Financial Services Committee for his annual congressional testimony. Among many divergent topics he addressed, he noted there were ways to make good on Trump’s plan to give Americans $5000 checks if Republicans win the mid-terms without increasing the deficit. Details TBD, of course. The US Dollar index gapped up as the yen continued its weakness from yesterday, helped along by reports of potential increases in defense spending.

  • US 2yr -1bps to 4.66%, 5yr -1bps to 4.82%, 10yr +0bps to 5.00%, 30yr +2bps to 5.37%
  • USD index: +$0.20 to $99.31
Empire State Manufacturing came in below expectations but continued to show business activity expanding while comped against a strong reading last month. New Order activity continued to increase but was just above expansion. Prices Paid and Received continued to rise. Forward looking measures of activity also continued to increase but moderated from last month. 
European indices ended lower but near their highs. Utilities were a leader and energy finished higher as well after crude climbed as US markets opened. Luxury names were among the weaker groups and large banks were under pressure (UBS, Deutsche Bank -2% to 3%) after BAC warned yesterday at a conference that trading revenue was tracking flat year-over-year  while Q3 investment banking fees could be down more than 10%. On the positive side, the broad macro environment remained generally positive according to the banks. The BOE is looking into stopping the sale of 20y and 30y bonds from its portfolio to alleviate some of the upward pressure on yields. The central bank’s plan for the next 12 months will be announced Thursday. Talks of a trade deal and tighter relationship between Europe and Canada have heated up as US-Canada relations have been strained.

The Nikkei was down fractionally. Softbank (+8%) recovered a good portion of Monday’s selloff that was triggered by the calls for AI slowdown and OpenAI pushing its IPO into 2027. Kioxia gained 2% on reports it could raise $10B in an ADR listing next year. Local reports discussed Japan could increase its defense spending to 3.5% of GDP, up from ~2% this year.  A 20y JGB auction was a little soft but didn’t have much impact overall. Chinese indexes were lower. Hang Seng fell 1%, Shanghai off 0.5%. China’s Industrial production in August was better than expected and rose from July. Retail Sales disappointed, mainly due to auto sales with mixed takeaways across the rest of the data. It still looks like consumer consumption remains challenged. Fixed Asset Investment continued to decline, as the deep freeze in real estate continues.  South Korea’s KOSPI fell 1%. Samsung and SK Hynix were slightly lower to follow Monday’s selloff.
Reports that Sec. of State Rubio had a phone call with Oman to discuss the regional situation helped oil pull back earlier today. However it then reversed and headed higher, currently up ~3% on news of protests disrupting Libyan oil field production, and Saudi Arabia telling European refiners their September cargos are cancelled due to the East-West pipeline closure. Energy Secretary Wright for his part said earlier today he expects the pipeline will reopen in “days”. Despite President Trump’s comments yesterday, Ukraine struck a Russian oil refinery. Europe is getting some reprieve from natural gas falling for the second straight day, having climbed from €55 to €85 over the past month. 

Metals are lower with the dollar strength and ag is modestly higher after the NOPA crush report this morning. Ahead of the upcoming Trump-Xi meeting the US and China are reportedly discussing cutting tariffs on energy and agriculture. Bitcoin was again rejected near $80K and is weak today ahead of a Senate procedural vote for the Clarity Act. If it clears, it will move to a floor debate, so there are still a lot of steps needed before it becomes law.
Earnings:
After-Market: EPM, TCOM
Pre-Market (Wed): LUXE, SLP
After-Market (Wed): LEN

Economic data:
US:
  • Empire State Manufacturing Survey: 7.6 vs 14.75 cons, prior 20.6
  • ADP Weekly Payrolls: 16.25K vs prior 12K
  • 4:30pm API Crude inventories
Global:
  • China Industrial Production: 5.2% y.y vs 4.8% cons, prior 4.5%
  • China Retail Sales y.y: 0.4% vs 0.8% cons, prior 0.6%
  • China Fixed Asset Investment YTD: -7.2% vs -7.2% cons, prior -6.7%
  • China Home Prices: -3.0% vs prior -3.2%
  • Germany ZEW Sentiment: 34.7 vs 37.0 cons, prior 34.2
  • Current Conditions: -47.1 vs -52.2 cons, prior -61.1
  • EU ZEW Sentiment: 25.8 vs 39.9 cons, prior 31.4
  • EU Trade Balance €14.2B vs €14.4B cons, prior €7.2B
  • German Wholesale Prices m.m: 0.9% vs 0.1% cons, prior 0.2%
  • UK Unemployment: 4.9% vs 5.0% cons, prior 4.9%
STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo
Published on 9/15/26 (a/o 9:00 am)
Good morning,
 
Yesterday the AI trade came under pressure after Anthropic’s CEO called for slowing down the pace of AI development in order to ensure innovation proceeds safely. Chips and related groups came under heavy pressure (DRAM, ICE Semis down ~5%). Software however got a boost (IGV +5%). The Trump administration pushed back on Anthropic’s call, saying it would only benefit China. China, for its part, said those calls harkened back to the Cold War playbook- the good ‘ole days. White House advisor David Sacks joined the administration’s push back against the call to slow down AI development. He agreed that AI companies are subject to liability for their models and was against granting those companies antitrust waivers to coordinate safety protocols. White House Advisor Kevin Hassett chimed in as well this morning, telling CNBC its not an antitrust issue for AI firms to warn each other. Meanwhile oil continued to march higher as did yields, with the 10y hitting 5.0% for a moment. Equity losses were relatively mild given the sharp tech moves. The S&P 500 fell 0.5%, equal-weight was up marginally, and the Russell 2000 fell 0.4%.
 

 
S&P futures are around flat ahead of the open and off overnight lows as oil reverses earlier gains after news that Sec. of State Rubio had a phone call with Oman to discuss the regional situation. Treasury yields were slightly higher earlier this morning but have pulled back to flat-to slightly lower, along with oil, on the Rubio headline. There will be a 20y auction later today and Treasury Secretary Bessent will appear before the House Financial Services Committee at 10am for annual congressional testimony. The US Dollar index gapped up as the yen continued its weakness from yesterday, helped along by reports of potential increases in defense spending. Empire State Manufacturing came in below expectations and lower than last month.
 
  • US 2yr -2bps to 4.65%, 5yr -1bps to 4.82%, 10yr -0bps to 4.99%, 30yr +2bps to 5.37%
  • USD index: +$0.19 to $99.30
 
The Nikkei was down fractionally. Softbank (+8%) recovered a good portion of Monday’s selloff, triggered by the calls for AI slowdown and OpenAI pushing its IPO into 2027. Kioxia gained 2% on reports it could raise $10B in an ADR listing next year. Reports out of Japan discussed the possibility that Japan could increase its defense spending to 3.5% of GDP A 20y JGB auction was a little soft but didn’t have much impact overall. China’s Industrial production in August was better than expected and rose from July. Retail Sales disappointed, mainly due to auto sales with mixed takeaways across the rest of the data. Fixed Asset Investment continued to decline, continued to be driven by a deep freeze in real estate.  Chinese indexes were lower. Hang Seng fell 1%, Shanghai off 0.5%. South Korea’s KOSPI fell 1%. Samsung and SK Hynix were slightly lower to follow Monday’s selloff. European indices are lower but off worst levels. Utilities are leading and tech is bouncing a little from yesterday’s weakness (ASML up over 1% locally).  Luxury names are among the weaker groups. Some of the large banks are lower (UBS, Deutsche Bank -2%) after BAC warned yesterday at a conference that trading revenue was tracking flat year-over-year  while Q3 investment banking fees could be down more than 10%.  On the positive side, the broad macro environment remained generally positive.  The BOE is looking into stop selling 20 and 30y bonds from its portfolio to alleviate some of the upward pressure on yields. The central bank’s plan for the next 12 months will be announced Thursday. Talks of a trade deal and tighter relationship between Europe and Canada have heated up as US-Canada relations have been strained.
 

 
Oil was up another ~1% today but pulled back on the Rubio/Oman phone call news. Despite President Trump’s post yesterday, Ukraine struck a Russian oil refinery. The Saudi East-West pipeline remained off line and a NYT article said the country was in a “state of shock” from how fast the Houthis took over territory in Yemen and the lack of US response. Metals are flat to slightly lower and ag is lower. Bitcoin was again rejected at $80K and is trading lower ahead of a Senate procedural vote for the Clarity Act. If it clears, it will move to a floor debate, so there are still a lot of steps needed to happen before it becomes law.   
 

 
Economic Data:
US:
  • Empire State Manufacturing Survey: 7.6 vs 14.75 cons, prior 20.6
  • ADP Weekly Payrolls: 16.25K vs prior 12K
  • 10:00am Bessent congressional testimony
  • 12:00pm NOPA Crush report
  • 1:00pm 20y auction
  • 4:30pm API Crude inventories
Global:
  • China Industrial Production: 5.2% y.y vs 4.8% cons, prior 4.5%
  • China Retail Sales y.y: 0.4% vs 0.8% cons, prior 0.6%
  • China Fixed Asset Investment YTD: -7.2% vs -7.2% cons, prior -6.7%
  • China Home Prices: -3.0% vs prior -3.2%
  • Germany ZEW Sentiment: 34.7 vs 37.0 cons, prior 34.2
    • Current Conditions: -47.1 vs -52.2 cons, prior -61.1
  • EU ZEW Sentiment: 25.8 vs 39.9 cons, prior 31.4
  • EU Trade Balance €14.2B vs €14.4B cons, prior €7.2B
  • German Wholesale Prices m.m: 0.9% vs 0.1% cons, prior 0.2%
  • UK Unemployment: 4.9% vs 5.0% cons, prior 4.9%

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