STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Sr. Market Strategist
Published on 10/07/26 (a/o 2:15 pm)
DOW 51,216 (-305), S&P 500 7,801 (-18), Russell 2000 2,799 (-31), NYSE FANG+ 19,588 (+71), ICE Brent Crude $100.11/barrel (-$0.47), Gold $4,141/oz (-$46), Bitcoin ~83.2k (-2396)
- S&P bouncing off the lows. Can the Yanks?
- Yields, crude lower but small caps under pressure
- Most sectors lower, Healthcare leading, Industrials under pressure
- Check out some of the recent ICE Data/Content:
- Inside the ICE House
- Episode 560: VICI Properties CEO Ed Pitoniak on Casinos, Golf, and the Business of Experience
- ETF Central: Looking Back on the Conversations Shaping ETFs
- NYSE Research Insights: Behind the Record Volumes: A Hidden Opportunity
- ICE Mortgage Monitor: ARM Demand Hits Nearly Four-Year High on Rising Mortgage Rates
- Market Storylines
MAC Desk Commentary:
Yesterday, US equities extended Monday’s gains, sending the S&P 500 to yet another all-time high. The index ended the session up 0.6% with broad-based strength, though small caps, which are more impacted by the recent rise in rates, underperformed. The S&P 600 was flat while the Russell 2k fell 0.4%. Healthcare- the heaviest weighted sector in the Russell (~20%)- was under pressure. A lot of that weakness occurred in the genomics stocks which have been on an AI/SI induced tear. The ARK Genomic Revolution ETF, which was up nearly 100% YTD, fell ~9%. Healthcare was the only sector lower within the S&P 500 as well. Meanwhile, Utilities led to the upside with the IPP’s up sharply for the second consecutive day after Constellation (+12%) announced a 20-year energy supply agreement with Google, following a similar deal with Amazon. Other AI / Energy infrastructure and hardware stocks rode the tailwind. Marvell Technology (+6%) increased guidance at its Investor Day, highlighting strong custom silicon demand. However, within tech memory and semi equipment stocks were under some pressure. Consumer, housing and travel related stocks, ex-OTAs which are still struggling to overcome the agentic AI concerns, outperformed. Oil prices reversed early losses to end around unchanged. Treasury yields pulled back modestly, helped by a sharp decline in rates in France after Le Pen proposed bigger spending cuts.
The S&P 500 opened lower with rates and oil prices moving higher, and continued to weaken throughout the morning. Equities eventually bottomed and reversed as oil fell on stockpile release news from the IEA along with yields pulling back. Yields took another leg lower after a strong 10y auction, further strengthening equities. The S&P is looking to get back to unchanged after bottoming around -0.7%, currently down ~0.2%. The equal-weight is lagging while small and mid caps are notably under-performing.
Healthcare is the upside standout today, with strength in large-cap biopharma (LLY, PFE, JNJ +2-3%). A consortium including the DOE, NIH, GOOG and META announced a ~$2B investment in AI technologies for biological research. That’s not helping the broader genomics group, however, as the ARKG ETF falls another 2% (-9% yesterday). Financials are middle-of-the-pack and major US banks are down ~1% along with international peers.
In Tech, the DRAM ETF turned positive after being down 3% earlier, driven by strong reversals in MU and SNDK- and for MU, an employee vote to strike. A bullish sell-side note also helped. However most semi names are lower. Software is also lower with cyber names lagging.
Industrials are underperforming with weakness across-the-board. The FTC and USDA are seeking public comments on ag equipment manufacturing and distribution markets. DE and CAT are down 3-6%. Data center infrastructure stocks like ETN, GEV, FIX and EME are down 3-5%, while neoclouds are sharply lower as well.
Treasury yields fell promptly along with oil as equities opened this morning. The 10y auction provided more welcome relief, stopping-through by 1.7bp. The Fed Minutes were released at 2pm and didn’t impact markets significantly. “Most” participants saw another hike in 2026 as likely appropriate. “Several” participants said the scale of the AI buildout continued to surprise. “Many” participants said financial conditions seem supportive of economic growth despite the rise in yields. In the economic data, mortgages apps continue to fall as rates move higher. Inflation expectations in the NY Fed Survey of Consumer Expectations rose 0.3% and 0.1% at the 1 and 3y horizons respectively (1y reaching highest levels since May 2023) and were unchanged at the 5y horizon. There’s been a lot of talk on how AI capital raising is impacting Treasury yields, and that discussion got another data point with news that SPCX (-3%) was reportedly looking to raise $40B in debt to purchase NVDA (-1%) chips.
- US 2yr -4bps to 4.77%, 5yr -2bps to 5.02%, 10yr -0bps to 5.28%, 30yr +0bps to 5.67%
- USD index: +$0.42 to $102.03
The US Dollar Index breached 102 as the Dollar continues to strengthen against the Euro (inverted, below), the Yen and the Swiss Franc.
Markets in Asia ended lower. The Nikkei fell ~1% with broad-based weakness. BOJ’s Sato, who was one of two dissenters that opposed a rate hike at the last BOJ meeting, signaled she would support future hikes in a measured fashion. Over in India, the country’s central bank hiked rates by 25bps to 5.5% as widely expected and signaled further tightening. In South Korea the Kospi was off 2%. Samsung and HK Hynix were down 2-3% while big industrial manufacturers saw larger losses. Mainland China remained closed while the Hang Seng ended modestly lower.
Major European indices were down ~1%, finishing near their lows. The reprieve in yields across Europe was short lived with long-end yields in France/Italy up ~10bps on the long-end. Banks were under stiff pressure across the continent (HSBA, Santander, UBS, BARC down 2-4%). Healthcare (pharma) and Telecom were upside leaders. There’s skepticism that France can deliver on yesterday’s spending cut proposal. Finance Minister Lescure said the government is ready to bypass Parliament if necessary, while Central Bank chief Emmanuel Moulin said the reaction in French yields is “serious and worrying”. On a positive note, German Industrial Production beat estimates and improved versus last month.
Brent crude has pulled back from its earlier highs, currently only slightly in the green. The IEA backed an accelerated release of oil stocks yet to be released (~100m barrels) from the March collective agreement, with priority for diesel inventory. Weekly DOE data showed inventories fell by ~3M barrels last week (API data -2M), versus expectations of a 1.7M build. Natural gas is up ~4% in both the US and Europe.
Metals have been under pressure with the USD strength, breaking last week’s low though trying to bounce off worst levels. Copper is flat, trying to hold the 50d ma. Crypto markets got hit hard overnight as there were >$500ml in long liquidations. Bitcoin failed ~$87k again yesterday and is now down ~2.5% trading just over $83k but holding above recent lows ~$82.5k. Ethereum broke below recent lows down ~5% testing its 50d ma.
Tomorrow we'll get weekly jobless claims and more Fed Speak, along with a 30y auction. Mainland China re-opens. Hopefully we'll also be preparing for Game 4 in the Yanks-Rays series if the Bronx Bombers can live up to their name tonight.
Earnings
- After-Market: APLD, LEVI
- Pre-Market: ANGO, HELE, PEP, TLRY
- After-Market: ODC, PKE
Economic Data:
US:
- MBA Mortgages Apps:-2.1% vs -4.3% prior
- Refis:-7.5% vs -8.7% prior
- 30yr Rate 7.49% prior 7.3%
- Manheim Used Car Index m.m / y.y: -1.1% / -0.6% vs prior -0.9% / 0.4%
- Oil Inventories: -3.186M vs 1.7M cons, prior 0.922M
- API inventories (Tues AMC): -2.09M vs prior 1.019M
- NY Fed Survey of Consumer Inflation Expectations 1y / 3y: 3.9% / 3.3% vs prior 3.6% / 3.2%
Global:
- Japan Cash Earnings: 3.8% vs. 3.7% cons., prior 4.3%
- India Rate Decision: Hiked rates by 25bps to 5.5%
- Germany Industrial Production: 2% vs, 0.5% cons., prior -1.2%
STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 10/07/26 (a/o 9:00 am)
Good morning,
Markets rallied to start the week with the S&P 500 closing within a stone’s throw of all-time highs. Thankfully Jazz Chisholm wasn’t throwing that stone. Yesterday, US markets extended Monday’s gains with the S&P 500 hitting a new all-time high. The index ended the session up 0.6% with broad based strength. However, small caps, which are more impacted by the recent rise in rates, did underperform. The S&P 600 was flat while the Russell 2k fell 0.4%. Healthcare, which is the heaviest weighted sector in the Russell 2k (~20%), was under pressure. A lot of that weakness happened in the genomics stocks which have been on an AI/SI induced tear. The ARK Genomic Revolution ETF, which was up nearly 100% YTD coming into yesterday, fell ~9%. Healthcare was the only sector lower within the S&P 500 as well. Utilities led to the upside with the IPP’s up sharply for the second consecutive day after Constellation (+12%) announced a 20-year energy supply agreement with Google, following a similar deal with Amazon recently. This led to strength in other AI/energy infrastructure and hardware stocks. Marvell Technology increased guidance at its Investor Day highlighting strong custom silicon demand. However, within tech memory and semi equipment stocks were under some pressure. Consumer, housing and travel related stocks, ex-OTAs which are still struggling to overcome the agentic AI concerns, outperformed. Oil prices reversed early losses to end around unchanged. Treasury yields pulled back modestly helped by a sharp decline in rates in France after Le Pen proposed bigger spending cuts.
US futures were modestly lower overnight but have accelerated to the downside over the last couple of hours as rates and oil prices are on the move higher yet again. Pretty quiet from an economic data and corporate headline perspective. SpaceX (-2%) is reportedly looking to raise $40B to purchase Nvidia (-1%) chips, highlighting the continued need to raise capital. Chip and memory stocks are under pressure in the pre-market with most names down 1.5% - 3%. Apple is modestly higher on reports that it is partnering with LG to launch a line of smart home products. Major US banks are down >1% with European banks under significant pressure as local yields move sharply higher again. S&P futures are down ~0.4% hovering around yesterday’s lows while Dow and R2K futures are off about twice that amount.
Mortgages apps continue to fall as rates move higher. After the open the NY Fed Survey of Consumer Expectations will be released with a focus on inflation expectations. There is a 10yr auction at 1:00 which will be closely watched followed by the FOMC Minutes at 2:00. Yesterday US yields pulled back modestly with European yields, but that rally proved short lived. Treasury yields are up 3-7bps across the curve with some steepening. The US index is up >0.5%, retesting Monday’s highs with particular weakness in the Euro and GBP.
Markets in Asia ended lower. The Nikkei fell ~1% with broad based weakness while the Kospi was off 2%. BOJ’s Sato, who was one of two dissenters, signaled she would support future hikes in a measured fashion. India’s central bank hiked rates by 25bps to 5.5% as widely expected and signaled further tightening. The Hang Seng ended modestly lower while mainland China remained closed. The reprieve in yields across Europe was short lived with long-end yields in France/Italy up >15bps. There is skepticism that yesterday’s spending cut proposal can be delivered with Finance Minister Lescure saying the government is ready to bypass Parliament if necessary. The Euro is falling nearly 1% versus the USD. Major indices across the region are down ~1% with weakness in financials, tech and industrials. Energy, healthcare and staples are outperforming.
Energy prices are up across the board with ICE Brent up ~1%. Ag is modestly lower. Metals have been under pressure with the USD strength. They took a sharp leg lower ~8:30 as they broke below last week’s low. Crypto markets got hit hard overnight as there were >$500ml in long liquidations. Bitcoin failed ~87k again yesterday and is now down ~2.5% trading just over 83k but holding above recent lows ~82.5k. Ethereum broke below recent lows down ~5% testing its 50d ma.
Economic Data:
US:
Markets rallied to start the week with the S&P 500 closing within a stone’s throw of all-time highs. Thankfully Jazz Chisholm wasn’t throwing that stone. Yesterday, US markets extended Monday’s gains with the S&P 500 hitting a new all-time high. The index ended the session up 0.6% with broad based strength. However, small caps, which are more impacted by the recent rise in rates, did underperform. The S&P 600 was flat while the Russell 2k fell 0.4%. Healthcare, which is the heaviest weighted sector in the Russell 2k (~20%), was under pressure. A lot of that weakness happened in the genomics stocks which have been on an AI/SI induced tear. The ARK Genomic Revolution ETF, which was up nearly 100% YTD coming into yesterday, fell ~9%. Healthcare was the only sector lower within the S&P 500 as well. Utilities led to the upside with the IPP’s up sharply for the second consecutive day after Constellation (+12%) announced a 20-year energy supply agreement with Google, following a similar deal with Amazon recently. This led to strength in other AI/energy infrastructure and hardware stocks. Marvell Technology increased guidance at its Investor Day highlighting strong custom silicon demand. However, within tech memory and semi equipment stocks were under some pressure. Consumer, housing and travel related stocks, ex-OTAs which are still struggling to overcome the agentic AI concerns, outperformed. Oil prices reversed early losses to end around unchanged. Treasury yields pulled back modestly helped by a sharp decline in rates in France after Le Pen proposed bigger spending cuts.
US futures were modestly lower overnight but have accelerated to the downside over the last couple of hours as rates and oil prices are on the move higher yet again. Pretty quiet from an economic data and corporate headline perspective. SpaceX (-2%) is reportedly looking to raise $40B to purchase Nvidia (-1%) chips, highlighting the continued need to raise capital. Chip and memory stocks are under pressure in the pre-market with most names down 1.5% - 3%. Apple is modestly higher on reports that it is partnering with LG to launch a line of smart home products. Major US banks are down >1% with European banks under significant pressure as local yields move sharply higher again. S&P futures are down ~0.4% hovering around yesterday’s lows while Dow and R2K futures are off about twice that amount.
Mortgages apps continue to fall as rates move higher. After the open the NY Fed Survey of Consumer Expectations will be released with a focus on inflation expectations. There is a 10yr auction at 1:00 which will be closely watched followed by the FOMC Minutes at 2:00. Yesterday US yields pulled back modestly with European yields, but that rally proved short lived. Treasury yields are up 3-7bps across the curve with some steepening. The US index is up >0.5%, retesting Monday’s highs with particular weakness in the Euro and GBP.
- US 2yr +3bps to 4.83%, 5yr +5bps to 5.09%, 10yr +7bps to 5.35%, 30yr +6bps to 5.72%
- USD index: +$0.56 to $102.17
Markets in Asia ended lower. The Nikkei fell ~1% with broad based weakness while the Kospi was off 2%. BOJ’s Sato, who was one of two dissenters, signaled she would support future hikes in a measured fashion. India’s central bank hiked rates by 25bps to 5.5% as widely expected and signaled further tightening. The Hang Seng ended modestly lower while mainland China remained closed. The reprieve in yields across Europe was short lived with long-end yields in France/Italy up >15bps. There is skepticism that yesterday’s spending cut proposal can be delivered with Finance Minister Lescure saying the government is ready to bypass Parliament if necessary. The Euro is falling nearly 1% versus the USD. Major indices across the region are down ~1% with weakness in financials, tech and industrials. Energy, healthcare and staples are outperforming.
Energy prices are up across the board with ICE Brent up ~1%. Ag is modestly lower. Metals have been under pressure with the USD strength. They took a sharp leg lower ~8:30 as they broke below last week’s low. Crypto markets got hit hard overnight as there were >$500ml in long liquidations. Bitcoin failed ~87k again yesterday and is now down ~2.5% trading just over 83k but holding above recent lows ~82.5k. Ethereum broke below recent lows down ~5% testing its 50d ma.
Economic Data:
US:
- MBA Mortgages Apps: -4.2% w/w prior -6%; 30yr Rate 7.49% prior 7.3%
- 9:00 Manheim Used Car Index
- 10:30 Oil Inventories
- 11:00 NY Fed Survey of Consumer Expectations
- Japan Cash Earnings: 3.8% vs. 3.7% cons., prior 4.3%
- India Rate Decision: Hiked rates by 25bps to 5.5%
- Germany Industrial Production: 2% vs, 0.5% cons., prior -1.2%
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