Stocks See Support from Strength in Chip Makers and AI Optimism

The S&P 500 Index ($SPX) (SPY) today is up +0.06%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.26%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.03%.  December E-mini S&P futures (ESZ25) are up +0.05%, and December E-mini Nasdaq futures (NQZ25) are up +0.02%. 

Stock indexes are slightly higher today on strength in chip makers.  Also, AI optimism is lifting technology stocks after China's Alibaba said it plans to boost its AI spending outlays beyond an initial $50 billion target.  Higher bond yields today are limiting the upside in stocks, as the 10-year T-note yield is up +2 basis points at 4.13%. 

US MBA mortgage applications rose +0.6% in the week ended September 19, with the purchase mortgage sub-index up +0.3% and the refinancing mortgage sub-index up +0.8%.  The average 30-year fixes rate mortgage fell -5 bp to 6.34% from 6.39% in the prior week.

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, Aug new home sales are expected to decline by -0.3% m/m to 650,000.  On Thursday, weekly initial unemployment claims are expected to increase by +2,000 to 233,000.  Also, Aug core (ex-defense and aircraft) capital goods new orders are expected to slip -0.1% m/m.  In addition, Q2 GDP is expected to be unrevised at +3.3% (q/q annualized). Finally, Aug existing home sales are expected to fall -1.3% m/m to 3.96 million.  On Friday, Aug personal spending is expected to be up by +0.5% m/m and Aug personal income is expected to be up by +0.3% m/m.  Also, the Aug core PCE price index, the Fed's preferred inflation gauge, is expected to rise by +0.2% m/m and +2.9% y/y.  Finally, the University of Michigan's Sep US consumer sentiment index is expected to remain unchanged at 55.4.

The markets are pricing in a 92% 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 down by -0.23%.  China's Shanghai Composite closed up +0.83%.  Japan's Nikkei Stock 225 closed up +0.30%.

Interest Rates

December 10-year T-notes (ZNZ5) today are down by -4 ticks.  The 10-year T-note yield is up +2.3 bp to 4.129%.  Strength in stocks today is weighing on T-note prices.  Also, supply pressures are undercutting T-note prices as the Treasury will auction $28 billion of 2-year floating rate notes and $70 billion of 5-year T-notes later today. 

European government bond yields today are moving lower.  The 10-year German bund yield is down -0.3 bp at 2.746%. The 10-year UK gilt yield is down -0.1 bp to 4.679%.

The German Sep IFO business climate survey unexpectedly fell -1.2 to a 4-month low of 87.7, versus expectations of an increase to 89.4.

ECB Executive Board member Cipollone said that "risks on inflation in the Eurozone are very balanced" and he doesn't see major threats to inflation in either direction, with interest rates currently well positioned.

Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.

US Stock Movers

Chip stocks are climbing today, led by a +3% jump in Marvell Technology (MRVL) to lead gainers in the Nasdaq 100 after its board authorized a new $5 billion share repurchase program.  Also, Intel (INTC) and ARM Holdings Plc (ARM) are up more than +2%.  In addition, Microchip Technology (MCHP), GlobalFoundries (GFS), and Advanced Micro Devices (AMD) are up more than +1%.

Energy producers and energy service providers are moving higher today, with the price of WTI crude oil up more than +1%.  As a result, Diamondback Energy (FANG) is up more than +3%.  Also, APA Corp (APA), Devon Energy (DVN), Phillips 66 (PSX), and ConocoPhillips (COP) are up more than +2%.  In addition, Halliburton (HAL), Occidental Petroleum (OXY), Baker Hughes (BKR), Valero Energy (VLO), Schlumberger (SLB), Exxon Mobil (XOM), Marathon Petroleum (MPC), and Chevron (CVX) are up more than +1%.

uniQure NV (QURE) is up more than +190% after reporting its phase I/II trial of its AMT-130 in treating Huntington's disease met its prespecified endpoint, with a high dose demonstrating a statistically significant slowing of disease progression at 36 months. 

Iren Ltd (IREN) is up more than +9% after Arete initiated coverage of the stock with a recommendation of buy and a price target of $78. 

Albemarle (ALB) is up more than +5% to lead gainers in the S&P 500 as lithium producers rally on news that the Trump administration is pursuing a stake in Lithium Americas Corp.

ServiceNow (NOW) is up more than +3% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $1,250. 

Thor Industries (THO) is up more than +3% after reporting Q4 net sales of $2.52 billion, well above the consensus of $2.33 billion. 

General Motors (GM) is up more than +2% after UBS upgraded the stock to buy from neutral with a price target of $81. 

Cipher Mining (CIFR) is up more than +2% after OpenAI said it plans to invest about $400 billion to develop five new data center sites in partnership with Oracle and Softbank Group.  Cipher Mining counts Softbank as an investor. 

Acadia Pharmaceuticals (ACAD) is down more than -11% after reporting that a Phase 3 trial of its intranasal carbetocin in patients with hyperphagia in Prader-Willi syndrome failed to meet its primary endpoint. 

Freeport-McMoRan (FCX) is down more than -9% to lead losers in the S&P 500 after it suspended activity at its Grasberg mine in Indonesia following a deadly mud slide. 

Bloom Energy (BE) is down more than -12% after Jeffries downgraded the stock to underperform from hold with a price target of $31. 

James Hardie Industries Plc (JHX) is down more than 3% after projecting a fiscal 2025-28 target EBITDA margin of 28.5%, below the consensus of 31%-32%. 

Adobe (ADBE) is down more than -2% to lead losers in the Nasdaq 100 after Morgan Stanley downgraded the stock to equal weight from overweight. 

Earnings Reports(9/24/2025)

Barnes & Noble Education Inc (BNED), Cintas Corp (CTAS), HB Fuller Co (FUL), KB Home (KBH), PACS Group Inc (PACS), Steelcase Inc (SCS), Stitch Fix Inc (SFIX), Thor Industries Inc (THO), Uranium Energy Corp (UEC), Worthington Steel Inc (WS).