After Hours Report

The major averages finished mostly lower for the week as persistent pressure from elevated Treasury yields weighed on much of the market, while continued strength in semiconductor and other technology stocks provided an important offset. The S&P 500 slipped 0.3% and the DJIA fell 1.3%, while the Nasdaq Composite gained 0.5%. The Russell 2000 declined 0.2%, while the S&P Mid Cap 400 gained 0.5%.

Interest rates remained one of the market's most significant headwinds throughout the week. The 10-year note yield climbed 10 basis points to 5.28%, reaching its highest levels of the year even as expectations for another rate hike at the October FOMC meeting declined. Yields remained elevated early in the week before easing somewhat following dovish commentary from New York Fed President John Williams, who said there was "no need for urgency" following the Fed's September rate hike.

The rate outlook received another shift Wednesday after the August PCE Price Index and core PCE Price Index both came in slightly cooler than expected, increasing expectations that the Fed will leave rates unchanged in October. That view received additional support Thursday as Fed Vice Chair Phillip Jefferson emphasized a patient, data-dependent approach, before Friday's September Employment Situation report showed just 29,000 new nonfarm payrolls and a slight increase in the unemployment rate to 4.2%. Despite those developments, longer-term Treasury yields remained elevated, leaving rates an important constraint on equities.

Technology stocks once again proved comparatively resistant to that pressure. The information technology sector gained 1.4%, while the PHLX Semiconductor Index climbed 3.7%. Semiconductor strength was evident throughout much of the week and accelerated again on Friday, helping the Nasdaq finish as the only major average with a weekly gain.

The Vanguard Mega Cap Growth ETF added a more modest 0.3% as several other notable mega-cap stocks elsewhere faced pressure throughout the week.

That leadership continued to mask weaker performance beneath the surface. The S&P 500 Equal Weighted Index fell 0.7%, compared with the 0.3% decline in the cap-weighted S&P 500, while eight of the 11 S&P 500 sectors finished lower. The health care (-2.7%) and financials (-2.5%) sectors were the weakest performers, while the consumer staples (-1.9%), real estate (-1.9%), communication services (-1.6%), and materials (-1.6%) sectors also recorded sizable declines. The iShares U.S. Home Construction ETF fell 3.1% as the elevated rate environment remained a significant obstacle for housing-related stocks.

Crude oil was another source of volatility as negotiations surrounding the U.S.-Iran conflict and the Strait of Hormuz remained in focus. WTI moved sharply in both directions during the week before finishing down roughly 1.5%. A coordinated G7 release of 100 million barrels through the IEA contributed to Friday's decline, although the energy sector still gained 1.4% for the week.

Friday provided a more encouraging finish after the softer employment report and lower crude oil helped all 11 S&P 500 sectors avoid losses. Small- and mid-cap stocks also outperformed the S&P 500 during the session, representing an improvement from the narrow participation seen through much of September. Still, the Equal-Weight S&P 500 trailed the cap-weighted index again on Friday, reinforcing the continued outsized influence of technology and the market's largest stocks.

Overall, the week extended the market's recent pattern of concentrated leadership. Semiconductor strength kept the Nasdaq higher and limited the S&P 500's decline, but weakness across most sectors and the Equal-Weight S&P 500 pointed to a softer underlying market. Cooler inflation and employment data reduced expectations for another near-term Fed rate hike, but the continued rise in longer-term Treasury yields prevented that shift from translating into broader relief for equities.

• S&P Mid Cap 400: +0.5% week-to-date
• Nasdaq Composite: +0.5% week-to-date
• Russell 2000: -0.2% week-to-date
• S&P 500: -0.3% week-to-date
• DJIA: -1.3% week-to-date

Monday:

The major averages finished Monday broadly lower after a volatile session shaped by sharp swings in crude oil, elevated Treasury yields, and shifting headlines surrounding U.S.-Iran negotiations. The S&P 500 (-0.8%), Nasdaq Composite (-0.9%), and DJIA (-0.7%) ended near their late-session lows, though still above the worst levels reached during the morning.

Oil and interest rates provided the primary macro headwinds. WTI crude surged more than 3.0% to above $95 per barrel during the morning after President Trump rejected Iran's ceasefire proposal, while the 10-year note yield climbed as high as 5.26%. Those moves fueled broad selling that briefly pushed losses in the major averages toward or beyond 1.0%.

The tone improved considerably around midday as a series of headlines suggested that diplomatic channels remain open despite substantial differences between the U.S. and Iran. President Trump was reported by CNN to be open to sanctions relief in exchange for progress toward a nuclear deal, while Alhadath reported that Iran had agreed to halt uranium enrichment in exchange for easing U.S. sanctions. Other reports indicated that talks between the two sides are expected to continue this week. Those developments prompted a sharp reversal in crude oil, although uncertainty surrounding negotiations remained elevated.

A later Bloomberg report indicated that Iranian officials are pessimistic about reaching an agreement to end the war and reopen the Strait of Hormuz before the midterms. WTI ultimately settled just $0.27 higher (+0.3%) at $92.44 per barrel, far below its morning high.

Despite the intraday recovery, selling remained relatively broad into the close, with cyclical and growth-oriented areas accounting for much of the weakness. The communication services (-1.7%), consumer discretionary (-1.6%), financials (-1.1%), and industrials (-1.0%) sectors were among the largest laggards. Mega-cap stocks also remained under pressure, leaving the Vanguard Mega Cap Growth ETF down 0.9%, with Meta Platforms (META 715.62, -36.04, -4.79%) a particular laggard back after last week's double-digit advance.

Semiconductor stocks were another source of weakness, with the PHLX Semiconductor Index falling 1.6%. NVIDIA (NVDA 228.86, +3.79, +1.68%) remained a notable exception after increasing its share repurchase authorization by $150 billion to $235 billion and launching its Open Agent Safety Platform, helping the information technology sector (-0.7%) hold up better than several other growth-oriented areas.

Defensive-oriented stocks provided relative support. The consumer staples (+0.4%) and health care (+0.3%) sectors finished higher, while the energy sector (+0.2%) eked out a gain after surrendering much of its earlier advance as crude oil retreated.

Weakness also extended beyond the largest companies, with the Russell 2000 and S&P Mid Cap 400 both falling 0.7%.

There were several notable stock-specific moves outside the broader market narrative. MongoDB (MDB 334.68, -75.76, -18.46%) plunged after President and CEO Chirantan "CJ" Desai stepped down effective immediately to take a senior role at Meta Platforms, marking the company's second CEO transition in less than a year just ahead of its September 29 Investor Day. Former CEO Dev Ittycheria was named interim president and CEO as the company begins an external search, while MDB reaffirmed its Q3 and FY27 guidance.

NIKE (NKE 36.37, +0.62, +1.73%), meanwhile, displayed notable relative strength ahead of its fiscal Q1 report Thursday afternoon. The gain provided a reprieve from a difficult year for the stock, which remains down roughly 43% year-to-date amid an uneven turnaround marked by weakness in Greater China, discounting, competitive pressures, and questions surrounding the company's product pipeline and direct-to-consumer strategy.

Ultimately, the market was unable to sustain its midday recovery as elevated Treasury yields and lingering uncertainty surrounding the U.S.-Iran conflict kept pressure on equities. The sharp reversal in crude oil removed one of the morning's biggest headwinds, but weakness across cyclical stocks, mega-cap names, and semiconductors left the major averages with sizable losses at the close.

U.S. Treasuries had a rough start to the week, pinched at first by rising oil prices and then languishing on the back of ongoing secular issues that include stubbornly high inflation and increased debt issuance to cover a large budget deficit. Notably, Treasuries didn't recover much ground after oil prices scaled lower amid reports that the U.S. and Iran might be making progress toward a deal. The 2-year note yield settled up eight basis points to 4.93%, and the 10-year note yield settled up nine basis points to 4.25%. 

There was no economic data of note today.

Tuesday: 

Wednesday:

Wednesday's session ended on a decidedly weaker note after a sharp final-hour selloff erased earlier gains, putting an exclamation point on a September marked by increasingly narrow market leadership. The S&P 500 (-0.3%) and DJIA (-0.9%) finished near their session lows, while the Nasdaq Composite (+0.2%) held onto a slim gain despite giving back most of an earlier 1.0% advance.

The reversal left the S&P 500 down 0.5% for September and the DJIA down 4.3%, while the Nasdaq Composite still finished the month with a 1.9% gain. That divergence reflected one of the defining features of September: strength in mega-cap growth and AI-related stocks contrasted with considerably weaker performance across much of the broader market. That pattern was evident again for much of today's session. The Vanguard Mega Cap Growth ETF rose 0.4% and finished September up 3.2%, while the information technology sector (+0.6%) was the day's best-performing sector and gained 4.4% for the month.

Software stocks were particularly strong, with the iShares Expanded Tech-Software Sector ETF (IGV) gaining 1.2%. Semiconductor stocks were little changed today, leaving the PHLX Semiconductor Index flat, but the group was one of September's clear standouts with a 9.5% monthly gain.

Micron (MU 1065.11, +0.03, +0.00%) will put that strength back in focus when it reports earnings after today's close, with investors looking for indications that strong memory pricing and AI-related demand can continue to support growth as capital spending rises.

There were several pronounced moves elsewhere in the technology landscape. Hewlett Packard Enterprise (HPE 63.89, +2.40, +3.90%) was a standout after raising its Networking outlook and increasing its expected Juniper cost synergies ahead of its Networking Investor Day. Jabil (JBL 286.76, -32.08, -10.06%), meanwhile, was among the session's weakest stocks despite better-than-expected results and an upbeat outlook, as elevated expectations surrounding its AI-driven growth prospects tempered the response.

The communication services sector (flat) surrendered a sizable earlier gain as Meta Platforms (META 725.18, -13.61, -1.84%) and Alphabet (GOOG 340.74, +3.42, +1.01%) sold off sharply into the close, contributing to the broader market's late retreat. Still, the sector gained 4.3% in September.

The consumer discretionary sector (+0.1%) was the only other S&P 500 sector to finish above its flat line today, supported by strength in Amazon (AMZN 249.15, +2.48, +1.01%).

Weakness was much more pronounced elsewhere by the close. The consumer staples sector (-1.7%) finished at the bottom of the standings, followed by the health care (-1.4%), industrials (-1.3%), and financials (-1.2%) sectors. Moderna (MRNA 192.57, -10.89, -5.35%) was a notable laggard in the health care sector after being downgraded to Sell from Neutral at Citigroup.

Breadth deteriorated substantially as the session progressed, with decliners ultimately outpacing advancers by roughly 9-to-5 on the NYSE and by a slim margin on the Nasdaq. The Russell 2000 (-0.3%) and S&P Mid Cap 400 (-0.5%) also finished lower, extending their September losses to 5.3% and 4.3%, respectively. Their monthly declines stand in sharp contrast to the gains for mega-cap growth, technology, and semiconductor stocks and underscore just how concentrated the market's September leadership became.

Earlier support came from slightly cooler-than-expected inflation data. The August PCE Price Index increased 0.3% month-over-month (Briefing.com consensus: 0.4%), while the core PCE Price Index rose 0.2% (Briefing.com consensus: 0.3%). The data increased expectations for the Fed to leave rates unchanged at its October meeting, although Treasury yields remained elevated and provided little relief for the broader market as inflation still remains firmly above the Fed's target. 

Crude oil also moved higher after yesterday's sharp decline, settling $1.28 higher (+1.4%) at $90.54 per barrel. CNBC reported that crude oil exports through the Strait of Hormuz have returned to pre-war levels, although refined-product flows remain constrained.

Ultimately, the final session of the third quarter captured many of the trends that defined September. Mega-cap growth, technology, and AI-related stocks produced substantial gains, but that strength was accompanied by significant weakness across smaller companies and many areas of the broader market. Wednesday's late selloff only sharpened that contrast, leaving the Nasdaq higher for the month even as the S&P 500, DJIA, Russell 2000, and S&P Mid Cap 400 all finished September in negative territory.

U.S. Treasuries gave participants a head fake today when yields moved quickly lower following some better-than-feared PCE inflation data in the August Personal Income and Spending report at 8:30 a.m. ET. The realization that a 3.4% PCE inflation rate (3.0% for core) is still well above the Fed's 2.0% target soon set in, however, and that initial move was unwound. The 2-year note yield finished unchanged at 4.89% (+55 basis points this month), and the 10-year note yield settled up four basis points to 5.30% (+56 basis points this month).

Stocks opened with modest gains before selling pressure quickly broadened, sending the major averages to their session lows late in the morning. Treasury yields were a significant early headwind, particularly at the long end of the curve, as generally solid economic data pushed longer-dated yields back toward their overnight highs. The tone improved considerably as the session progressed, however, as yields reversed lower across the curve.

The retreat helped stocks recover their morning losses and also encouraged better participation beneath the surface. Fed Vice Chair Phillip Jefferson, a voting FOMC member, provided some additional encouragement for expectations that the Fed will leave rates unchanged at its October meeting. Jefferson said future policy adjustments should be determined by trends in the data, the evolving outlook, and the balance of risks, adding that policymakers will need to come to their own judgment and that doing so "may take more time." The CME FedWatch Tool now assigns a 76.2% probability to the Fed keeping rates steady at the October meeting, up from 62.4% yesterday.

Technology stocks provided another important source of support. The information technology sector (+0.8%) finished among five S&P 500 sectors in positive territory, while the PHLX Semiconductor Index gained 1.6%. Micron (MU 1097.39, +32.28, +3.03%) was a notable contributor to the semiconductor group's strength after reversing an early post-earnings decline and finishing higher. The turnaround followed an initially cautious response to the company's better-than-expected Q4 results and strong Q1 guidance, with enthusiasm surrounding AI-driven memory demand ultimately helping the stock find its footing.

Accenture (ACN 212.73, +29.36, +16.01%) was another standout after beating Q4 expectations, as its results and stronger bookings increased confidence that AI is becoming a growth driver rather than a disruption risk for the company. Synopsys (SNPS 490.54, +55.60, +12.78%) also ranked among the best-performing S&P 500 components following its Investor Day.

Strength across AI-infrastructure names extended beyond the technology sector, helping the industrials sector (+1.0%) finish among the day's leaders.

The utilities sector (+0.6%) also benefited from the reversal lower in Treasury yields, while the financials sector (+0.2%) also finished modestly.

The energy sector (+1.9%) led the standings as crude oil extended its recent advance. WTI crude settled $2.48 higher (+2.7%) at $93.02 per barrel amid continued geopolitical uncertainty.

At the other end of the standings, the communication services sector (-1.2%) and health care sector (-1.3%) were clear laggards. Alphabet (GOOG 334.93, -5.81, -1.71%) weighed on the communication services sector after reversing an opening gain that followed the unveiling of Gemini 4 Argon. Paramount Skydance (PSKY 9.34, -0.99, -9.58%) also remained under pressure as investors digested news that its merger with Warner Bros. Discovery (WBD 30.95, +0.00, +0.00%) is expected to close on October 6.

Ultimately, the session featured a meaningful improvement from the broad weakness seen during the morning. The reversal lower in Treasury yields relieved some of the pressure that has recently weighed on equities, while continued strength across semiconductors, technology, and AI-infrastructure stocks helped the S&P 500 finish higher. The outperformance of small- and mid-cap stocks also represented a welcome improvement in participation after the narrow leadership that characterized much of September, although pronounced weakness in the communication services and health care sectors kept the S&P 500's advance relatively modest, leaving the major averages firmly lower heading into Friday's session.

U.S. Treasuries had a volatile session, with yields ultimately settling near their lows for the day even though oil prices traded higher. The 2-year note yield settled down 10 basis points to 4.79%, and the 10-year note yield settled down six basis points to 5.24%.

Reviewing today's data:

• For the week ending September 26, initial jobless claims fell by 1,000 to 197,000 (Briefing.com consensus: 200,000). Continuing jobless claims for the week ending September 19 decreased by 11,000 to 1.701 million.
  • The key takeaway from the report remains the same: layoff activity continues to run at low levels that reflect a solid demand environment.
• Sep S&P Global U.S. Manufacturing PMI - Final 55.9 (Briefing.com consensus 55.3; Prior 57.0)
• Construction spending increased 0.9% month-over-month in August (Briefing.com consensus: 0.3%) following a 0.1% decline in July. On a year-over-year basis, construction spending was down 1.7%.
  • The key takeaway from the report was the strength seen in private construction, which included solid increases for both residential and nonresidential spending.
• The ISM Manufacturing Index decreased to 54.5% in September (Briefing.com consensus: 55.2%) from 54.6% in August. The dividing line between expansion and contraction is 50.0%, so the September figure suggests manufacturing activity expanded in September from the prior month but at a slightly slower pace.
  • The key takeaway from the report is that it showed an ongoing expansion in manufacturing activity that was accompanied by a faster acceleration in prices paid, which will continue to foment concerns about pass-through effects for customers.
• 09/26 EIA Natural Gas Inventories +64 bcf (Prior +53 bcf)

Friday: 

The major averages finished firmly higher on Friday, holding the bulk of an early advance through a relatively quiet afternoon. The S&P 500 (+0.7%), Nasdaq Composite (+1.2%), and DJIA (+0.5%) all ended with solid gains, while the Russell 2000 (+0.9%) and S&P Mid Cap 400 (+1.0%) outperformed. Despite today's broadly positive finish, only the Nasdaq Composite and S&P Mid Cap 400 ended the week with week-to-date gains.

The session's strongest move came during the morning following the September Employment Situation report, which showed nonfarm payrolls increasing by just 29,000 (Briefing.com consensus 100,000), alongside an uptick in the unemployment rate to 4.2% (Briefing.com consensus 4.1%) and a 0.1% month-over-month increase in average hourly earnings. The softer labor data initially reinforced expectations that the Fed will refrain from another rate hike at this month's FOMC meeting, helping propel the major averages to their session highs during the opening stretch.

That initial momentum faded as Treasury yields reversed their post-jobs-report decline, but the equity market gave back relatively little ground.

Crude oil provided another source of early support after G7 leaders announced a coordinated release of 100 million barrels of oil through the IEA, beginning immediately and extending over four months. WTI crude briefly fell below $90 per barrel before recovering a sizable portion of its decline, ultimately settling $1.92 lower (-2.1%) at $91.10 per barrel.

After settling below their morning highs around midday, the major averages spent most of the afternoon moving in a tight range and ultimately carried solid gains into the close.

Technology and mega-cap growth stocks remained at the forefront of the advance. The information technology sector (+1.1%) finished among the day's leaders, while the PHLX Semiconductor Index gained 2.4%. NVIDIA (NVDA 233.95, +3.09, +1.34%) was among the notable semiconductor winners, and the Vanguard Mega Cap Growth ETF rose 1.0%.

SpaceX (SPCX 158.95, +10.88, +7.35%) was another standout among growth-oriented names, climbing amid favorable analyst commentary regarding demand for its Grok Bot.

Mega-cap strength also helped lift the communication services sector (+0.9%), which finished among the better-performing groups.

The consumer discretionary sector (+1.4%) topped the sector standings, supported by a sizable gain in Tesla (TSLA 370.59, +16.48, +4.65%) after the company reported Q3 deliveries of 486,532 vehicles, above its company-compiled analyst consensus of 461,974. Tesla's strength helped offset a sharp post-earnings decline in NIKE (NKE 33.90, -1.26, -3.57%), which ranked among the worst-performing S&P 500 components and fell to fresh decade lows following a disappointing FY27 outlook.

There was also pronounced divergence elsewhere in the technology landscape. Western Digital (WDC 415.29, -47.27, -10.22%) and Seagate Tech (STX 848.99, -96.58, -10.21%) came under heavy pressure after Toshiba announced an expansion of HDD production in the Philippines, raising concerns that additional industry capacity could eventually loosen the tight supply-demand environment that has supported strong pricing and margins.

The materials sector (+1.0%) was another standout, while all 11 S&P 500 sectors ultimately finished at or above their flat lines.

The health care (flat) and financials (flat) sectors were today's laggards, with continued weakness in biotech names weighing on the health care sector.

Participation was also healthier than the recent pattern of concentrated mega-cap leadership might suggest. The Russell 2000 and S&P Mid Cap 400 both outperformed the S&P 500, and every S&P 500 sector avoided a loss. Still, the S&P 500 Equal Weighted Index (+0.4%) trailed the cap-weighted index (+0.7%), underscoring that technology and mega-cap growth stocks continued to provide an outsized portion of the support.

Ultimately, Friday's session combined stronger participation across small- and mid-cap stocks with continued leadership from technology and mega-cap growth names. The market's ability to preserve most of its early advance despite the reversal in Treasury yields was notable, although the gap between the cap-weighted and Equal-Weight S&P 500 showed that the familiar concentration in the market's largest stocks remained firmly in place.

U.S. Treasuries finished the week with losses across the curve after a brief morning rally gave way to a reversal that lifted yields on longer tenors back to their highest levels of the year. The 2-year note yield settled up three basis points to 4.82% (+4 basis points this week), and the 10-year note yield settled up four basis points to 5.28% (+10 basis points this week). 

Reviewing today's data:

• Sep Nonfarm Payrolls 29K (Briefing.com consensus 100K; Prior 133K revised from 162K)
• Sep Nonfarm Private Payrolls 46K (Briefing.com consensus 100K; Prior 89K revised from 127K)
• Sep Unemployment Rate 4.2% (Briefing.com consensus 4.1%; Prior 4.1%)
• Sep Average Hourly Earnings 0.1% (Briefing.com consensus 0.3%; Prior 0.3%)
• Sep Average Workweek 34.4 (Briefing.com consensus 34.3; Prior 34.4)
• Factory orders increased 0.1% month-over-month in August (Briefing.com consensus: 0.0%) following a downwardly revised 0.8% increase (from 0.9%) in July. Excluding transportation, factory orders increased 0.3% on the heels of a 0.7% increase in July. Shipments of manufactured goods were flat after being up 0.8% in July.
  • The key takeaway from the report is that business spending was up solidly in August, notwithstanding an overall sluggish increase in factory orders.