STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA- Sr. Market Strategist
Published on 9/30/26 (a/o 2:00 pm)
DOW 51,213 (-137), S&P 500 7,703 (+32), Russell 2000 2,809 (+1), NYSE FANG+ 19,291 (+175), ICE Brent Crude $103.65/barrel (+$1.06), Gold $4,181/oz (+$2), Bitcoin ~84.0k (+557)
MAC Desk Commentary:
Welcome to the final day of September and Q3. Last night in a throwback to my college years, Rice and Schlitts were on the dinner menu as the Yankees blasted and silenced the Red Sox in Game 1 of their post-season matchup. While the MLB Playoffs got underway yesterday US equities ended with modest losses despite crude pulling back.  2y yields fell but the long-end continued to march higher. Utilities led and Comm Services, Industrials and Consumer Discretionary were the other sectors in the green. The fall in oil pushed Energy to back of the pack. Large caps were mixed, with the tech mega caps mostly lower . Semi/memory stocks were among the leaders, especially the capital-equipment stocks. Anthopic’s IPO/S-1 details leaked, with lots of huge numbers in it for both revenue and spending. Also, a “destruction of humanity” note in the risk factors. Open AI had its Dev Day, which included the unveiling of “Dots” their personal AI agent response to Meta’s Muse. There was also the tech summit at the White House where AI was officially rebranded as SI, not to be confused with Sport Illustrated or just a regular old sigh, but rather Super Intelligence.  Consumer Confidence was weaker than expected as were the JOLTS job openings, though CCL and KMX earnings showed consumer resiliency. Late in the day NY Fed Williams made some dovish comments saying after the September hike “there is no need for urgency” and that the Federal Reserve can now look at the data before making further decisions. He went on to say that if his projections are correct, one further hike later this year would be appropriate. This helped 2yr yields fall and helped equities stabilize in the back half of the day.  
S&P futures were trading around flat before this morning’s economic data hit the tape. PCE was the main focus with this month’s reading incorporating the BLS methodology changes. Headline and Core PCE (+0.2% m.m vs 0.3%) were cooler than expected but ticked up last month’s downwardly revised numbers. On an annual basis headlines and Core (3% vs. 3.3%) were also better than expected. A couple economists have suggested that that methodology changes across computer software, legal fees and investment advice, accounted for a ~0.35% downward adjustment to the reading. Personal Income was lower than expected while Spending was a touch higher, continuing to suggest savings rates are being drawn down. The 3rd GDP estimate was revised higher, from 1.5% to 2.2% driven by increases in consumer spending and Investments. The September ADP Jobs report was better than expected increasing to 90k from 38k last month. Initially the 2yr yield fell ~6bps but that has since reversed. The odds of a Fed rate hike in October have eased over the past two days to ~40% from ~70% a week ago. That being said, long end of Treasury yields are up ~bps hitting new YTD highs. There are multiple Fed speakers on the calendar today. On a separate note the Fed’s Office of Inspector General found no criminal misconduct in the Fed renovation, potentially opening the door for Chair Powell to step down from the Board which would open up a new seat. If you’re looking for a fascinating afternoon read there is a much juicier story about Chinese espionage and the Fed released by CNBC’s Eamon Javers. 
Equity futures moved up a little less than 0.5% after the economic data and the S&P 500 extended the gains modestly after the open with tech continuing to drive performance. However, shortly after the open as yields began to move higher the equal-weight and small/mid cap indices gave up gains. The Treasury selloff has gotten a little more unruly this afternoon and equities have started to pickup a bit of downside momentum. With where markets currently stand the S&P 500 is about unchanged for the month of September and up just under 3% in Q3 while small/midcap indices are down ~5% and 7% over those timeframes. 
Mega-cap tech is doing a lot of the heavy lifting in the S&P 500 driving info tech and comm services up >1%. Within tech HPE increased its Networking revenue guidance at its Investor Day today. Jabil also had strong results, but the stock is trading off >5%. This could be telling as we approach earnings season and ahead of Micron numbers after the bell. Rounding out the mega-cap tech triumvirate consumer discretionary is up 0.4% with Amazon (+2%) offsetting pretty broad-based losses in the sector. Autos and housing related, which are both funding dependent industries are leading to the downside. Energy is the only other sector with meaningful gains as oil prices bounce. The move in yields is weighing on REITs and Utilities. Financials are the worst performing sector. Robinhood is trading lower after its Hood Summit ’26 event yesterday where the company unveiled its own agentic AI trading accounts. Capital markets exposed banks, alternative asset managers and insurance stocks are leading to the downside. Exchange and financial data analytics stocks are outperforming. Industrials and healthcare are both down ~0.5%.
Asian markets were mostly higher. The Nikkei was a leader, up 2% with broad gains. SoftBank was up ~7% on news of a new, $30B funding round for OpenAI, at $1.4T valuation. Japanese data were soft however as Retail Sales and Industrial Production missed estimates and fell versus last month. For September the Nikkei rose ~1%, but was down ~5% for Q3. China’s official Manufacturing PMI was inline and crept back above 50 this month. Non-Manufacturing was a little better than expected and also moved above 50. The private RatingDog numbers were a little better. Beijing announced new policies to stimulate the housing market but they seem to be less than hoped. Both Hong Kong and Shanghai declined ~4% in September, but diverged overall in Q3 with Hong Kong adding ~8% while Shanghai fell 6%. European indices closed down . The French 10y spread to Germany (OAT to Bunds) is at its highest since 2012, and they yield >20bo more than Italian bonds for the first time in the Euro era. The STOXX 600 was down 2.5% this month, breaking a streak of six straight monthly gains though it was a touch lower during Q3. 
After declining yesterday oil is modestly higher. There are a lot of puts and takes across the oil complex. Goldman Sachs and JPM estimate Gulf exports are near or back to 2025 levels while multiple efforts to bypass the SOH ramp up, including the Saudi East-West pipeline. However diplomatic progress has stalled and a return to hostilities is becoming more likely, according to several reports. Brent is up over 10% this month and ~40% this quarter. Precious metals have reversed early gains. Gold is down ~7% decline this month, but up 5% this quarter. Ag is under pressure with corn falling particularly hard after the Quarterly Grain report showed much larger than expected domestic supplies. Crypto initially moved higher following the data but has pulled back. Bitcoin and Ether are up >5% on the month and have significantly cut int the YTD losses after a snap back in Q3.
Earnings
After-Market: BSET, MU, PRGS
Pre-Market: ACN, AYI, MKC
After-Market: NKE

Economic Data:
US:
  • Mortgage applications:  -4.3% vs prior -0.8%
  • Refis: -8.7% vs prior -2.6%
  • 30y: 7.30% vs prior 7.12%
  • ADP employment change: 90K vs 70K cons, prior 38K
  • PCE m.m / y.y: 0.3% / 3.4% vs 0.4% / 3.7% cons, prior 0.1% / 3.4%
  • Core: 0.2% / 3.0% vs 0.3% / 3.3% cons, prior 0.1% / 3.0%
  • 2Q GDP final estimate: 2.1% vs 1.5% 2nd prior estimate
  • Personal Income / Spending m/m: 0.2% / 0.9% vs 0.4% / 0.8% cons, prior 0.3% / 0.1%
  • Trade Balance: $-132.6B vs $-115B cons, prior $-118.9B
  • Wholesale Inventories: 0.7% vs 1.1% cons, prior 1.3%
  • Retail ex-Auto: 0.1% vs 0.8% prior    
  • Fed Speakers: Barkin, Goolsbee, Kashkari
Global:
  • China Sept Official PMI: 50.1 vs 50.1 cons, prior 49.8
  • Non-Manufacturing: 50.2 vs 49.2 cons, prior 49.0
  • China RatingDog Manufacturing PMI: 52.1 vs 51.6 cons, prior 51.5
  • Services: 51.6 vs 51.1 cons, prior 51.4
  • Japan Retail Sales: 2.7% y.y vs 3.2% cons, prior 3.7%
  • Japan Industrial Production: -1.7% m.m vs 1.3% cons, prior -0.2%
  • South Korea Industrial Production m.m: -4.8% vs -7.5% cons, prior 0.5%
  • Australia CPI: 4.0% vs 4.1% cons, prior 3.5%

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