September 24th Pre-Market Brief

Good Morning

Stocks are opening lower, and the reason is the bond market. Long-term Treasury yields are near their highest levels in about 20 years, raising borrowing costs for everyone from homebuyers to the companies building AI.

Xi Jinping is at the White House today, but bonds are setting the tone.

Let's dig in...

Today's Big Picture

1. Forced Selling Is Part Of Why Yields Climbed

A month ago, traders saw an October Fed hike as a long shot. Now they see it as likely. Jefferies says the main driver of yesterday's bond selloff was likely traders forced to dump losing bets. Yields are easing off this morning's highs, and former Dallas Fed chief Robert Kaplan thinks markets expect too many hikes.

2. For Markets, Today's Summit Is About Iran

Tariffs are already on hold until Jan. 10. China is Iran's only major oil buyer, and Trump's team has played down that support to keep the summit friendly. Oil traders expect the disruption to last, with Brent for delivery next August at its highest since May. Oil that stays high into next year gives the Fed more reason to keep hiking.

3. The AI Build-Out Now Has A Rates Problem

Oracle is lower on a report it may delay payments if permit fights stall its New Mexico data center. Oracle says the project is still on schedule. Big AI bets run on borrowed money, and SoftBank sold $11.1 billion in bonds overnight to fund its OpenAI stake. Higher yields make that borrowing more expensive, which is why AI names are leading the Nasdaq lower.

Market Overview

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Stock Spotlight (pre-market)

Darden Restaurants $DRI ( ▲ 0.07% )  

lower after first quarter earnings and revenue narrowly missed estimates. Olive Garden, its biggest chain, barely grew sales at existing restaurants.

MGM Resorts $MGM ( ▼ 2.7% )  

falling after Barry Diller's People Inc. withdrew its offer to buy the casino operator. That $48.30 a share cash offer had been propping up the stock since June.

Meta Platforms $META ( ▲ 1.02% )  

lower with the rest of tech, giving back part of this week's Muse driven rally. Last night it showed a handheld Muse device and said it will take a small fee on purchases Muse makes.

Grail $GRAL ( ▲ 0.51% )  

higher after FDA advisers voted 7-2 in favor of Galleri, its blood test for more than 50 cancers. The vote isn't final, and the FDA is expected to decide in the coming months.

Everpure $P ( ▼ 1.12% )  

formerly Pure Storage, is higher after forecasting fiscal 2028 revenue of $7 billion to $7.3 billion, well above estimates. Its profit outlook for that year also topped expectations.

Knife River $KNF ( ▼ 7.87% )  

higher after activist investor Starboard Value disclosed a large stake. Starboard wants the construction materials company to raise profit margins or explore a sale.

What to Watch

7-Year Treasury Auction (1 PM ET)
Yesterday's 5-year sale drew so few buyers that the banks required to bid took an unusually large share. If that happens again, buyers are still backing away and yields likely keep climbing. A strong sale would be the first sign the forced selling is done.

Costco Earnings (After The Close)
Costco already reported $93.9 billion in quarterly sales, so tonight is about profit margins. RBC has flagged higher fuel costs as the risk there. The stock sits near an eight-month low heading in, so the bar is lower than usual.

Want to Know about this years upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this year

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