The S&P 500 Index ($SPX) (SPY) today is up +0.56%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.81%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.28%. December E-mini S&P futures (ESZ25) are up +0.53%, and December E-mini Nasdaq futures (NQZ25) are up +0.24%.
Stock indexes are moving higher today as consumer spending strengthens and core inflation remains tame. Today's report on Aug personal spending rose more than expected at the strongest pace in five months. Also, today's report on the Aug core PCE price index, the Fed's preferred gauge of inflation, came in right on expectations, which could allow the Fed to continue lowering interest rates.
US semiconductor makers are moving higher today after The Wall Street Journal reported that the Trump administration is considering a new plan to reduce the US's reliance on chips made overseas, aiming to spur domestic manufacturing and reshape global supply chains.
Pharmaceutical stocks are climbing today despite President Trump's plan to impose 100% tariffs on drug imports. According to Jeffries, the plan appears to be a "win" for the pharmaceutical industry, as many major drug makers have a production presence in the US and have announced increased investment directly tied to local manufacturing.
US Aug personal spending rose +0.6% m/m, stronger than expectations of +0.5% m/m and the largest increase in 5 months. Aug personal income rose +0.4% m/m, stronger than expectations of +0.3% m/m.
The US Aug core PCE price index, the Fed's preferred gauge of inflation, rose +0.2% m/m and +2.9% y/y, right on expectations.
Comments today from Richmond Fed President Tom Barkin were slightly hawkish, as he noted that the uncertainty that pervaded the economic outlook earlier in the year has started to lift for US companies, and he sees limited risk of further deterioration in employment and inflation.
A potential negative factor for market sentiment is the likelihood that the US government will shut down on October 1 if lawmakers fail to pass a spending bill by then. The White House issued a memo late Wednesday that said a shutdown would trigger widespread dismissals of employees in government programs that don't align with President Trump's priorities.
Rising corporate earnings expectations are a bullish backdrop for stocks. According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts' expectations, the highest in a year. Also, S&P companies are expected to post +6.9% earnings growth in Q3, up from +6.7% as of the end of May.
The markets this week will focus on any fresh trade or tariff news. Later today, the University of Michigan's Sep US consumer sentiment index is expected to remain unchanged at 55.4.
The markets are pricing in an 86% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.
Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.47%. China's Shanghai Composite closed down -0.65%. Japan's Nikkei Stock 225 closed down -0.87%.
Interest Rates
December 10-year T-notes (ZNZ5) today down -2 ticks. The 10-year T-note yield is up +0.8 bp to 4.178%. T-notes are slightly lower today after US Aug personal spending rose more than expected at the strongest pace in 5 months. Also, hawkish comments from Richmond Fed President Tom Barkin were bearish for T-notes when he said he sees limited risk of further deterioration of employment and inflation.
Easing inflation concerns are limiting losses in T-notes today after the Aug core PCE price index, the Fed's preferred gauge of inflation, came in right on expectations. Bond dealer short covering is also lifting T-note prices as dealers lift short hedges placed on T-notes to hedge against the Treasury's sale of $211 billion of T-notes and floating rate notes this week.
European government bond yields are moving lower today. The 10-year German bund yield is down -2.5 bp at 2.748%. The 10-year UK gilt yield fell from a 3-week high of 4.768% and is down -1.6 bp to 4.741%.
The ECB Aug 1-year CPI expectations unexpectedly rose to 2.8% from 2.6% in July, stronger than expectations of a decline to 2.5%. The ECB Aug 3-year CPI expectations were unchanged from July at 2.5%, stronger than expectations of decline to 2.4%.
Swaps are discounting a 2% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.
US Stock Movers
US chip makers are climbing today after the Wall Street Journal reported that the Trump administration is weighing a new plan to reduce US reliance on chips made overseas. GlobalFoundries (GFS) is up by more than +9% to lead gainers in the Nasdaq 100. Also, Intel (INTC) is up more than +4%, and Texas Instruments (TXN) is up more than +2%. In addition, Micron Technology (MU) is up +0.51% and Analog Devices (ADI) is up +0.35%.
Pharmaceutical stocks are moving higher after Jeffries said that President Trump's plan to boost tariffs on the companies looks like a "win" for the pharmaceutical industry, as many major drug makers have some production presence in the US and have announced increased investment directly tied towards local manufacturing. Eli Lilly (LLY) and Merck & Co. (MRK) are up more than +1%. Also, AbbVie (ABBV) is up +0.80%, Pfizer (PFE) is up +0.65%, and Amgen (AMGN) is up +0.64%.
Crinetics Pharmaceuticals (CRNX) is up more than +21% after receiving FDA approval for its Palsonify medication to treat adults with acromegaly.
Paccar (PCAR) is up more than +6% to lead gainers in the S&P 500 after President Trump set a 25% tariff rate on heavy trucks made outside of the US.
Mirion Technologies (MIR) is up more than +6% after JPMorgan Chase initiated coverage on the stock with a recommendation of overweight with a price target of $28.
Boeing (BA) is up more than +3% to lead gainers in the Dow Jones Industrials after the Wall Street Journal reported that the FAA will ease restrictions on 737 MAX deliveries.
Kenvue (KVUE) is up more than +2% after Rothschild & Co Redburn upgraded the stock to buy from neutral with a price target of $22.
TechnipFMC (FTI) is up more than +1% after it was awarded a contract worth between $250 million-$500 million to supply subsea production for Exxon Mobil's Hammerhead development in Guyana's Starbroek Block.
Concentrix (CNXC) is down more than -10% after forecasting Q4 adjusted EPS of $2.85 to $2.96, well below the consensus of $3.30.
IREN Ltd (IREN) is down more than -8% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $24.
Costco Wholesale (COST) is down more than -2% to lead losers in the S&P 500 and Nasdaq 100 after reporting Q4 US comparable sales rose +5.1%, weaker than the consensus of +5.21%.
Apellis Pharmaceuticals (APLS) is down more than -1% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $18.
Earnings Reports(9/26/2025)
Compass Diversified Holdings (CODI), Immersion Corp (IMMR), Mercurity Fintech Holding Inc (MFH), Triller Group Inc (ILLR), XCF Global Inc (SAFX).
