Indices
- Dow 45,479, -1,279 or -2.73%.
- Nasdaq 22,204, -576 or -2.53%.
- S&P 6,552, -164 or -2.44%.
- MSCI EAFE 2810.41, +68.62 or +2.50%.
- USD10Y 4.051%, -6.8bp or -1.65%.
- WTI Crude $58.84/bbl, -$2.04 or -3.35%.
Markets Finally Pay Attention
As the government shutdown moved into its second week, markets finally began to take notice. Major indices started the week higher on positive technology news but lost momentum as the Senate failed to end the shutdown and the President renewed threats of additional tariffs on China.
In the technology sector, Advanced Micro Devices (AMD) surged 34% after announcing it would supply chips to OpenAI, which in turn may take up to a 10% equity stake in AMD. Tesla (TSLA) rallied early in the week following the release of an updated, lower-priced Model Y. Meanwhile, The Information, a business and technology publication, cast doubt on Oracle’s (ORCL) margins in its chip-rental business—an area Oracle recently claimed would quadruple revenue within four years. ORCL fell 2.5% on the day the report was published but finished the week nearly flat.
Earnings season wrapped up with Delta Air Lines (DAL) and PepsiCo (PEP) reporting strong results. DAL beat both earnings and revenue expectations, raised guidance, and gained 4.29% during regular trading. PEP also exceeded expectations and reaffirmed guidance, rising 4.23% on the day, though North American volumes remain a concern.
Midweek, the Federal Reserve’s September meeting minutes revealed that while the 25 basis point rate cut was nearly unanimous, policymakers remain divided over whether one or two more cuts will be needed this year.
Finally, on Friday, equities fell between 1.5% and 3% as the President threatened a “massive increase in tariffs” on China and suggested he might cancel his meeting with President Xi amid rising tensions over export controls on rare earth materials.
Of Note
- Bitcoin hit a new all-time high of $126,198 before retreating alongside the broader market later in the week.
- Oil prices fell to five-month lows after OPEC+ announced a production increase of 137,000 barrels per day, compounded by escalating U.S.–China trade tensions and signs of easing conflict in the Middle East.
Looking Ahead: October 13 – 17
The economic calendar will remain light this week, largely due to the ongoing government shutdown. Unless the situation changes, the September Producer Price Index (PPI) will be postponed this week and weekly jobless claims will be postponed for the third consecutive week.
On the corporate side, however, Q3 earnings season officially begins, with major money-center banks, logistics firms, and key technology names all reporting results.
Economic Calendar
- Monday – N/A.Earnings: N/A.
- Tuesday – N/A. Earnings: JPMorgan Chase (JPM), Blackrock (BLK), Wells Fargo (WFC), Citigroup (C), Johnson and Johnson (JNJ).
- Wednesday – N/A. Earnings: Bank of America (BAC), ASML (ASML), JB Hunt (JBHT), United Airlines (UAL).
- Thursday – Initial Jobless Claims*, September Produce Price Index*, U.S. Retail Sales*, Earnings: Taiwan Semiconductor (TSM), CSX (CSX).
- Friday – N/A. Earnings: American Express (AXP).
*Pending the end of the government shutdown
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