U.S. Equities Gain on Soft Oil, Semiconductor Strength Amid Hawkish Fed Signals

The S&P 500 ($SPX) rose 0.25%, the Dow Jones Industrial Average ($DOWI) gained 0.36%, and the Nasdaq 100 ($IUXX) added 0.30%. December E-mini S&P futures (ESZ26) climbed 0.25%, while December E-mini Nasdaq futures (NQZ26) rose 0.31%.

Indexes advanced on the back of weaker crude prices and broad-based strength in chipmakers and AI-related names. WTI crude fell more than 1% after reports that U.S. and Iranian negotiators are discussing a phased reopening of the Strait of Hormuz, with Iran’s foreign minister reportedly submitting a seven-day proposal contingent on certain conditions being met.

U.S. economic data came in better than expected, supporting sentiment. August nondefense ex-aircraft capital goods new orders rose 1.6% month-over-month versus a consensus of 0.6%, with July revised up to 0.6% from flat. The University of Michigan September consumer sentiment index was revised higher by 0.3 points to 48.1, beating expectations of a downward revision to 47.5.

Benchmarks pulled back from highs as bond yields climbed. The 10-year T-note yield hit a fresh 19-year peak of 5.23%, driven by hawkish remarks from New York Fed President John Williams, who emphasized the Fed cannot ignore persistent supply shocks and must bring inflation back to target. T-notes also faced pressure from stronger data, though they initially edged up as crude eased inflation fears and prompted some short-covering.

December 10-year T-notes (ZNZ6) lost 9 ticks, with yields up 2.3 bp to 5.225%. European yields also rose, with the 10-year German bund hitting a 17-year high of 3.632% and UK 10-year gilts reaching a 1.5-week high of 5.408%. Germany’s October GfK consumer confidence dropped 3.8 points to -30.6, missing expectations.

Markets are pricing in a 66% chance of a 25 bp Fed rate hike at the October 27-28 FOMC meeting and a 47% chance of a 25 bp ECB hike on October 29.

Overseas markets were higher, with the Euro Stoxx 50 up 0.37% and Japan’s Nikkei-225 closing 1.30% higher at a 2.5-week high. China’s Shanghai Composite was closed for the Mid-Autumn Festival.

Interest Rates

European government bond yields moved higher, as noted above. The German Oct GfK consumer confidence index fell to a five-month low.

US Stock Movers

Chipmakers and AI stocks led gains, with the iShares Semiconductor ETF (SOXX) up over 1%. ARM (ARM), NXP Semiconductors (NXPI), and Qualcomm (QCOM) rose more than 3%, while Microchip Technology (MCHP), Analog Devices (ADI), and Texas Instruments (TXN) gained over 2%. SanDisk (SNDK), ASML (ASML), Applied Materials (AMAT), and Lam Research (LRCX) also advanced more than 1%.

Cybersecurity names weakened, with Zscaler (ZS) sliding 8% after naming a new CRO. Okta (OKTA) and SentinelOne (S) fell more than 3%, while Palo Alto Networks (PANW), Fortinet (FTNT), Gen Digital (GEN), and CrowdStrike (CRWD) also declined.

Energy stocks drifted lower alongside crude. Valero (VLO) and Devon Energy (DVN) dropped more than 2%, with Phillips 66 (PSX), Marathon Petroleum (MPC), APA Corp (APA), ConocoPhillips (COP), Diamondback Energy (FANG), and Occidental Petroleum (OXY) down more than 1%.

Notable single-stock moves: Atlas Energy Solutions (AESI) jumped over 19% on a $340.5 million equipment purchase agreement; People Inc. (PPLI) rose more than 9% on reported takeover speculation involving MGM Resorts; Humana (HUM) gained over 8% after an Barclays upgrade; and Akamai Technologies (AKAM) rose more than 7% on a seven-year, $11.6 billion deal with Anthropic. Twilio (TWLO) fell more than 6% after an HSBC downgrade, Lionsgate Studios (LION) dropped over 4% on an JPMorgan underweight initiation, and Comcast (CMCSA) lost more than 2% after a KeyBanc downgrade.

Earnings Reports (9/25/2026)

None.

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