September 30Market Overview

Happy Wednesday

Prices rose slower than expected in August, and tech stocks liked it.

The economy also grew faster this spring than first reported. I'll take that any day of the week

Let’s dig in...

Today's Big Picture

1. Inflation Cools and October Hike Odds Fall 
   
   Core PCE came in below forecasts for August, and even under Fed Chair Kevin Warsh's own estimate. Traders now see about a one in three chance of a hike at the Oct. 28 meeting. A week ago, those odds were better than two in three. A technical tweak by the government helped pull the number down, so call it progress with a small asterisk.

2. The Economy Is Running Hotter Than We Thought
   
   The government revised second-quarter growth well above its prior estimate. August consumer spending grew at its fastest pace in more than a year. Private employers added 90,000 jobs in September, beating forecasts and more than doubling August's 36,000. That strength is why long-term bond yields barely budged on the good inflation news.
   

3. Oil Stays Pricey as Gulf Exports Recover 
   
   Gulf oil exports are back to prewar levels, according to Goldman Sachs. U.S. crude still rose above $91 today on worries about thin stockpiles and a wider Iran war. Goldman expects prices to ease by year-end. I hope they're right, because higher oil is the fastest way to undo today's good inflation news.

Market Overview

Index Performance

Stock Spotlight

Boeing $BA ( ▼ 0.94% )  
won the Navy's next fighter jet contract, the F/A-XX, worth more than $20 billion. It's a big win for a defense business that's struggled for years. Rival Northrop Grumman $NOC fell and now has one big next-gen aircraft program left, the B-21 bomber.

Mattel $MAT ( ▼ 3.63% )  
hit a 52-week low after saying CEO Ynon Kreiz, who revived Barbie, is stepping down. Condé Nast CEO Roger Lynch, who also ran Pandora and Sling TV, takes over.

Moderna $MRNA ( ▼ 6.68% )  
fell after Citi downgraded it to sell over valuation. Its price target is less than half of Tuesday's close.

Conagra Brands $CAG ( ▼ 4.57% )  
is raising prices on frozen and refrigerated foods as its shipping costs rise twice as fast. The Slim Jim maker blames fuel and a truck driver shortage.

Big Name Updates

Apple $AAPL ( ▲ 1.7% )  
plans a smart-home push on Oct. 13, led by a roughly 6-inch Siri AI display, per Bloomberg. New CEO John Ternus is also reportedly planning layoffs as memory chip costs rise.

Eli Lilly $LLY ( ▼ 1.87% )  
said patients on retatrutide, its next-gen obesity drug, lost 49.6 pounds on average in a late-stage trial. That's at the 12 mg dose over 80 weeks.

Nvidia $NVDA ( ▲ 1.58% )  
wraps up the quarter well ahead of the S&P 500. Bank of America made it a top pick for the fourth quarter, historically one of the best stretches for chip stocks.

Tesla $TSLA ( ▲ 0.06% )  
lined up $30 billion in new credit but says it doesn't plan to tap it this year. Elon Musk also said Tesla is aiming for 200 gigawatts of solar production a year.

Blue Chips
MarketBeat lists “7 Blue-Chip Stocks to Add To Your Forever Portfolio”

Other Notable Company News

SpaceX $SPCX ( ▲ 1.35% )  
will get nearly $85 billion from Anthropic over three years for computing power. Anthropic's leaked IPO filing points to a valuation near $2 trillion.

Hewlett Packard Enterprise $HPE ( ▲ 4.62% )  
landed a $1.2 billion AI rack order from Vultr and raised its networking outlook. The racks run on the Helios platform from AMD $AMD.

Robinhood $HOOD ( ▼ 3.29% )  
unveiled in-app AI agents that can trade within limits you set, and 24/7 stock trading is coming soon. Shares still slipped after an early gain.

McDonald's $MCD ( ▼ 1.14% )  
is using AI tools that estimate what customers at each restaurant will pay and suggest menu prices.

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Sector Watch

Bond Market

The 10-year yield sits just under its 2007 peak after its biggest quarterly climb since 2016. Mortgage rates hit their highest level since November 2023 on Tuesday.

Policy Watch

Fed

New York Fed President John Williams said Tuesday there's no need to rush an October hike. Today's inflation data backed him up.

• Goldman Sachs now sees one more hike in December, with a strong chance the Fed stops there.

• Traders aren't there yet. They still price in three or four hikes over the next year or so.

Trade

Talk of a diesel export ban is keeping U.S. crude cheaper than usual versus global oil. A ban would likely force refiners to cut output and buy less crude.

• Diesel is the tight spot. Gulf diesel shipments are still about half of 2025 levels, per Goldman Sachs.

International

The dollar is closing September with its biggest monthly gain against the euro in 14 months. Strong U.S. growth and rising rates are behind it, while Europe wrestles with energy and debt worries.

• The euro hit its lowest level since May 2025 on Tuesday.

• China's factory activity grew in September for the first time in three months.

What to Watch

Micron Tonight

Micron Technology $MU reports after the close with its stock up about sixfold in a year. Trivariate's Adam Parker says it likely needs a huge quarter just to earn a modest pop. I'm watching guidance more than the quarter itself.

Friday's Jobs Report

Economists expect 84,000 jobs in September. After today's strong ADP number, a big beat could put an October hike back on the table. Thursday's jobless claims are the last read before then.

Thanks for reading - you are now the more informed 🙂

- John

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