STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo- Market Strategist
Published on 10/05/26 (a/o 1:00 pm)
DOW 51,163 (-14), S&P 500 7,760 (+37), Russell 2000 2,849 (+16), NYSE FANG+ 19,324 (+113), ICE Brent Crude $101.19/barrel (-$1.06), Gold $4,159/oz (-$3), Bitcoin ~85.1k (+633)
MAC Desk Commentary:
Last week a quarterly rebalancing was added to the much-discussed mix of stories driving markets- and one of those stories got a rebrand. The rise in yields and oil prices continued to provide a headwind for stocks while the technology formerly known as AI (TFKAA) continued to buoy markets. Equity markets rallied on Friday, recouping a good portion of the week’s losses after a weaker than expected jobs report. Yields initially moved lower but ultimately ended the day modestly higher with a steepening of the curve throughout the week. The S&P 500 ended the week down 0.3% with Healthcare, Financials and Consumer-related stocks the worst performing. Energy and Technology led to the upside. The equal-weight S&P 500 was down nearly, 1% falling for the seventh consecutive week. Small and midcap indices ended the week on either side of unchanged and outperformed on Friday after testing their respective 200d ma’s earlier in the week.

A big Giants win and an Islanders rout of the Devis in their home opener helped soften a Yankees loss/almost no-hitter, and the S&P 500 opened slightly higher with global politics, M&A, and Iran updates in the background. Around 10am equities turned higher following the ISM Services report and news that Iran’s Interior Minister was heading to Qatar for talks, as well as news that the US’ top national security officials held an undisclosed meeting on Friday at Camp David to discuss Iran and Yemen. That was in addition to Saudi-backed forces launching a major assault on Houthi-held territory in Yemen over the weekend.

The S&P is shrugging off more steepening of the yield curve, up 0.7% and at its best level of the day. We are also less than 1% from an ATH. The equal-weight and smaller caps are roughly in line, with Growth outperforming Value overall.
Sector breadth is solid with 10/11 sectors in the green. Materials, Energy and Comm Services are leading. Steel names are strong for Materials and RBC’s positive outlook for fertilizer markets is helping some of the chemical stocks. Energy is higher despite oil’s modest decline, with service names leading the group (BKR signing development deals with Venezuela). Natural gas and refiners are also leading. META is driving the gains in Comm Services and Paramount Skydance is higher after the company announced the leadership team for the combined Paramount/Warner Bros. company. Utilities are seeing broad, modest gains, but nuclear-exposed IPPs are strong (VST, CEG, NRG +4%) after VST was awarded a $4B US loan to upgrade three nuclear plants. Real Estate is the laggard among sectors, trading slightly lower as rates continue to climb.
There was a little bit of a Merger Monday today. PTC is being acquired by Schneider Electric in a cash deal for ~$22B and RXO (+21%) will be merging with CH Robinson (-12%) in a cash and stock deal worth nearly $6B in a big deal for the logistics industry.

In tech news, Elon Musk confirmed that SpaceX’s (+6%) AI unit would be renamed SpaceXSI. He also confirmed that there are discussions with Taiwan Semi (+3%) and Terafab which is weighing on Intel (-2%). After selling off last week Cerebras (+8%) is bouncing after OpenAI’s Altman said the company is a close partner.

Data was headlined by ISM Services after the open, which came in at 54.9, a tick below estimates (55.0) and declined from last month (55.4) but still well within expansion (>50). Production continued to expand but the pace fell from last month. The pace of New Orders fell as well while Employment, Inventories and Prices rose. Tariffs and fuel costs were the most cited issues impacting respondents’ supply chains.
The treasury curve is continuing to steepen, with 2y yields up ~2bp while 10 and 30y yields are at the day’s highs, up 6-7bp. That’s helping push the USD index to another YTD high ~102. The Euro and Swiss Franc are under pressure, falling ~0.4% each given European political uncertainty, while the Brazilian Real is sharply higher against the dollar on election results.  

  • US 2yr +2bps to 4.85%, 5yr +3bps to 5.09%, 10yr +6bps to 5.33%, 30yr +7bps to 5.69%
  • USD index: +$0.26 to $101.98
Brazil is the big political story after Bolsonaro fared much better than expected in this weekend’s elections and is now favored to win the runoff later this month. Brazil’s Bovespa is up 8% today, trading up with the currency. China and South Korea were closed overnight while most other markets in Asia ended higher. Japan was up over 2% with tech stocks moving sharply higher. Hong Kong’s Hang Seng bounced modestly after selling off sharply on Friday. European indices were mostly higher. Basic Resources, Banks and Energy outperformed across the region. Final S&P PMIs didn’t see much change from initial flash readings. France continued to underperform however with the CAC 40 down nearly 1% despite a respite in yields. Spain outperformed with the IBEX+1% after its PM called snap elections.
Oil is lower with the December Brent contract falling below $102. On top of the above-mentioned news, several press reports have highlighted that shipments through the SOH are back to around pre-war levels. Nat gas is mixed with US higher and Europe lower. Gold is flat, trying to hold $4150, but other metals are higher. Ag is mostly higher. Bitcoin and Ether are up ~1% with BTC trading ~$85K, off its earlier highs ~$87K. OKX became one of the first entities to file under the SEC’s recent Innovation Exemption framework to launch a Tokenized Securities Venue (TSV), as a JV with Intercontinental Exchange, for tokenized stock-trading. More regulatory news came when CFTC issued advanced notice of proposed rulemaking for leveraged retail crypto trading. 
Looking ahead, The LMI Logistics Managers Survey, ADP Weekly employment, Trade Balance and a 3y auction is on the calendar for tomorrow, along with comments from NY Fed President Williams. 
Earnings
  • After-Market: None
  • Pre-Market (Tues): LW, RPM
  • After-Market (Tues): STZ, PENG, WS

Economic Data:
US:
  • Final Services PMI: 58.8 vs flash 58.7
  • ISM Services: 54.9 vs 55.0 cons, prior 55.4 
Global:
  • Japan Services PMI (final): 51.3 prior 51.6
  • EU PPI: 1.9% / 8.2% m.m / y.y vs. 1.9% / 8.1% cons., prior 1.6% / 5.8%
  • Germany Services PMI (final): 52.9 vs flash 52.9
  • France Services PMI (final): 51.2 vs flash 51.4
  • EU Services PMI (final): 53 vs flash 53
  • UK Services PMI (final): 52.1 vs flash 51.7

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