October 8, 2025
S&P futures +0.1% following Tuesday’s pullback, when the S&P 500 snapped a seven-day winning streak. Oracle (ORCL) weighed on AI sentiment, while autos, builders, travel & leisure, and retail also lagged.
Overseas: Asian markets were mostly weaker, with Hong Kong and Japan down ~0.5%, while Europe traded modestly higher (~0.3%). Treasuries were firmer with yields down ~2 bp further out the curve. The Dollar Index rose 0.3%, while Kiwi weakness dominated FX after a 50 bp rate cut by the RBNZ. Gold gained 1.2%, extending its rally above $4,000/oz, Bitcoin +0.4%, and WTI crude +1.4%.
The macro narrative remains unchanged. AI headlines dominate — from a flurry of partnership announcements to renewed debate over valuation, ROI, and bubble risks. Other themes include the gold surge, revived M&A activity, and money-market funding pressure stoking speculation about an end to QT. Fed commentary continues to reflect policy divisions, though futures still price in roughly 110 bp of cuts through 2026. The combination of Fed easing and recession avoidance remains the key bullish thesis. Meanwhile, alternative data showing softer growth has drawn modest scrutiny.
Earnings season optimism is building, with consensus now expecting double-digit EPS growth in Q3, supported by AI capex, tariff mitigation, and resilient consumer trends. Elevated retail participation remains another driver, reflected in the squeeze across most-shorted stocks.
September FOMC minutes are due this afternoon. The Fed’s last meeting delivered a 25 bp rate cut with a dovish-leaning dot plot (two more cuts projected this year), though Powell’s comments signaled a risk-management approach and limited support for larger cuts. Fed speakers today include Musalem, Barr, and Kashkari, alongside the $39B 10-year Treasury auction. Thursday brings Powell (pre-recorded), Bowman, Barr, Kashkari, and Daly, followed by Friday’s University of Michigan sentiment and Fed remarks from Goolsbee and Musalem.
Corporate highlights:
- NVDA reportedly investing $2B equity in xAI as part of a $20B funding round.
- TSLA headlines focused on smaller-than-expected price cuts on new models.
- ABB to sell its Robotics unit to SoftBank for $5.4B.
- FICO weaker; EFX higher after pricing updates and VantageScore 4.0 improvements.
- CFLT surged on Reuters report company is exploring a sale following PE and strategic interest.
- FRPT reaffirmed FY25 guidance amid CFO transition.
- PENG fell on mixed FQ4 results and soft FY26 guidance, with expectations elevated after a 40% YTD rally.
U.S. equities finished lower Tuesday (Dow -0.20% · S&P 500 -0.38% · Nasdaq -0.67% · Russell 2000 -1.12%), snapping a seven-session S&P 500 winning streak and pulling back from Monday’s record highs. Losses were led by software, semis, and homebuilders, while defensives such as staples and healthcare fared better. The broader tone reflected mild profit-taking after a strong start to October, exacerbated by renewed concerns about AI valuations and a thin macro catalyst calendar.
Tech weakness dominated the session as a report from The Information highlighted profitability concerns for Oracle’s AI infrastructure rental business, while a wave of commentary about AI’s circular investment logic added to the cautious sentiment. Small caps, another recent outperformer on the Fed easing narrative, also underperformed despite lower yields.
On the macro front, the NY Fed’s consumer expectations survey showed a modest uptick in one-year inflation expectations but improving labor-market confidence. Treasuries rallied across the curve, with yields down 2–4 bp following a well-received $58B 3-year note auction, which saw strong foreign demand. The Dollar Index rose 0.6%, while yen weakness dominated FX headlines. Gold surged 0.7%, closing above $4,000/oz for the first time, while Bitcoin fell 3.2%. WTI crude was fractionally lower (-0.1%).
Fed commentary was nominally busy but largely balanced. Governor Miran underscored the importance of Fed independence, Kashkari warned of stagflation risks if rate cuts come too fast, Bostic argued against being reactive, and Logan reiterated caution on further easing. The market now looks ahead to the September FOMC minutes (Wednesday), additional Fed remarks through week’s end, and the upcoming 10- and 30-year Treasury auctions.
Sector Highlights
Sector rotation was evident, with Consumer Staples (+0.86%), Utilities (+0.42%), Energy (+0.14%), and Financials (+0.14%) outperforming on a defensive bid. Healthcare (+0.08%) also eked out a small gain. On the downside, Consumer Discretionary (-1.43%) and Technology (-0.52%) led declines, weighed by auto, homebuilder, and software weakness. Communication Services (-0.73%), Industrials (-0.57%), and Materials (-0.29%) also lagged. Real Estate (-0.29%) tracked rates lower but was less volatile than broader cyclicals.
Sector & Company Highlights
Technology (-0.52%)
- ORCL -2.5%: Weakened on reports of razor-thin margins in renting out Nvidia GPUs for AI workloads.
- AMD +3.8%: Continued follow-through from Monday’s 25% surge after announcing an AI collaboration with OpenAI; upgraded to Buy at Jefferies.
- DELL +3.5%: Raised long-term growth targets at its analyst day (revenue +7–9% CAGR, EPS +15%+), reaffirming Q3 and FY26 guidance.
- IBM +1.5%: Announced partnership with Anthropic to integrate Claude LLM into its software suite.
- AEHR -17.4%: Fell sharply after FQ1 results; noted tariff-related uncertainty and withheld formal guidance.
- AMKR: Jumped on plans to build an advanced semiconductor packaging and testing facility in Arizona.
Healthcare (+0.08%)
- JNJ: Fell modestly after facing a $966M verdict in a talc-related lawsuit.
- GEHC -2.5%: Downgraded to Neutral at Citi on skepticism over FY26 growth targets.
- QDEL -6.4%: Downgraded to Neutral at Citi; cited China diagnostics weakness and LEX launch risk.
- Hospitals and MCOs: Gained modestly as managed-care names rebounded after recent volatility.
Consumer Discretionary (-1.43%)
- TSLA -4.5%: Introduced lower-priced “Standard” Model 3 and Model Y variants; investors questioned margin implications.
- F -6.1%: Weakened after a fire at aluminum supplier Novelis disrupted production at key U.S. plants.
- DHI -6.1%: Downgraded to In Line at Evercore ISI; said demand recovery not yet visible despite lower mortgage rates.
- LCID: Missed on Q3 deliveries; sentiment cautious heading into earnings season.
- DLTR -2.9%: Downgraded to Underperform at Jefferies on inflation and tariff risks.
Consumer Staples (+0.86%)
- STZ +1%: FQ2 EPS and sales topped estimates; reiterated FY guidance; commentary remained cautious on demand headwinds.
- MKC -3.9%: Q3 beat but cut FY EPS guidance amid higher costs and tariffs.
- COST: In focus after reports it will offer discounted Ozempic/Wegovy access for members.
- Food & Beverage: Defensive tone helped sector outperform broader tape.
Financials (+0.14%)
- ICE: Announced plans to invest up to $2B in prediction-market platform Polymarket.
- Banks and P&C insurers: Outperformed on rotation to value; Treasury flattening helped sector spreads.
- CMA / FITB: CMA up modestly after prior-day announcement of $10.9B acquisition by Fifth Third.
Energy (+0.14%)
- XOM: Released Q3 earnings considerations, citing larger-than-expected timing headwinds in refining.
- AMRC: Rose after winning a nearly $200M infrastructure contract with the U.S. Naval Research Lab.
- WTI crude -0.1%: Paused after a volatile week; sector sentiment supported by steady demand outlook.
Materials (-0.29%)
- TMQ +211%: Soared after the U.S. Department of War invested ~$36M for critical minerals development; DOW will hold ~10% stake.
- JHX +8.1%: Guided FQ2 results above consensus, citing stronger siding and trim sales and integration synergies.
- Industrial metals: Broadly firmer on improving construction and tariff-relief speculation.
Industrials (-0.57%)
- BA: Boosted plans to ramp 737 MAX output later this month; sentiment capped by recent 777X delay headlines.
- AMRC: (Also mentioned under Energy) secured major government contract.
- A&D and machinery: Outperformed modestly within sector; builders weaker on downgrades.
Communication Services (-0.73%)
- NFLX +2.4%: Upgraded to Buy at Seaport Research; highlighted top-five U.S. streaming titles and strong ad traction.
- Entertainment & telecom: Provided some offset to META weakness; retail investor favorites underperformed.
Utilities (+0.42%)
- Benefited from defensive rotation and lower yields; sector outperformed broad market.
Real Estate (-0.29%)
- REITs edged lower alongside small caps but benefited from marginally lower yields
Eco Data Releases | Wednesday October 8th, 2025
S&P 500 Constituent Earnings Announcements | Wednesday October 8th, 2025
No constituents report today
Data sourced from FactSet Research Systems Inc.
