The S&P 500 Index ($SPX) (SPY) is up by +0.25% today, the Dow Jones Industrial Average ($DOWI) (DIA) is up by +0.36%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.30%. December E-mini S&P futures (ESZ26) are up +0.25%, and December E-mini Nasdaq futures (NQZ26) are up +0.31%.

Stock indexes are moving higher today amid weakness in crude oil prices. WTI crude oil is down more than -1% on a report that US and Iranian negotiators are exploring a phased deal to reopen the Strait of Hormuz. Also, strength in chipmakers and AI stocks today is also a supportive factor for stocks amid optimism over AI and demand for AI infrastructure.

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Today’s US economic news was better than expected and supportive for stocks after Aug nondefense ex-aircraft capital goods new orders, a proxy for capital spending, rose +1.6% m/m, stronger than expectations of +0.6% m/m. July was also revised upward to +0.6% m/m from the previously reported unchanged m/m. Also, the University of Michigan US Sep consumer sentiment index was unexpectedly revised upward by +0.3 to 48.1, stronger than expectations of a downward revision to 47.5.

Stock indexes fell from their highs today as bond yields rose. The 10-year T-note yield climbed to a new 19-year high of 5.23% today on concerns the Fed will continue to raise interest rates after New York Fed President John Williams said the Fed can't ignore supply shocks if they have a persistent effect on prices and it needs to return inflation to target.

Nov WTI crude oil prices (CLX26) are down more than -1% today as US and Iranian negotiators explored a phased deal that would see Iran reopen the Strait of Hormuz. The Financial Times reported that Iranian Foreign Minister Abbas Araghchi had submitted a new seven-day proposal to the US to reopen Hormuz if certain conditions were met.

Markets are discounting a 66% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.

Overseas stock markets are higher today. The Euro Stoxx 50 is up +0.37%. China's Shanghai Composite did not trade today, with markets in China closed for the Mid-Autumn Festival holiday. Japan's Nikkei-225 Stock Average rose to a 2.5-week high and closed up +1.30%.

December 10-year T-notes (ZNZ6) are down by -9 ticks today. The 10-year T-note yield is up +2.3 bp to 5.225%. Dec T-notes are under pressure today and are just above Thursday’s 19-year nearest-futures low, and the 10-year T-note yield rose to a new 19-year high of 5.223%. T-notes gave up an overnight advance and turned lower on hawkish comments from New York Fed President John Williams, who stressed that the Fed needs to return inflation to target. T-notes also fell today on better-than-expected US economic news, including Aug nondefense ex-aircraft capital goods new orders and the University of Michigan Sep US consumer sentiment index. T-notes initially moved higher today as WTI crude oil prices fell more than -1%, easing inflation expectations and sparking some mid short covering.

European government bond yields are moving higher today. The 10-year German bund yield rose to a 17-year high of 3.632% and is up +2.8 bp to 3.628%. The 10-year UK gilt yield climbed to a 1.5-week high of 5.408% and is up +1.6 bp to 5.397%.

The German Oct GfK consumer confidence index fell -3.8 to a 5-month low of -30.6, weaker than expectations of -27.2.

Markets are discounting a 47% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.

Chipmakers and AI stocks are moving higher today, supporting the overall market. The iShares Semiconductor ETF (SOXX) is up more than +1%. ARM Holdings Plc (ARM), NXP Semiconductors NV (NXPI), and Qualcomm (QCOM) are up more than +3%, and Microchip Technology (MCHP), Analog Devices (ADI), and Texas Instruments (TXN) are up more than +2%. Also, SanDisk (SNDK), ASML Holding NV (ASML), Applied Materials (AMAT), and Lam Researach (LRCX) are up, more than +1%.

Cybersecurity stocks are under pressure today, led by an -8% decline in Zscaler (ZS) after announcing Ross Tackett as the new chief revenue officer, effective October 1. Also, Okta (OKTA) and SentinelOne (S) are down more than -3%, and Palo Alto Networks (PANW), Fortinet (FTNT) and Gen Digital (GEN) are down more than -2%. In addition, CrowdStrike Holdings (CRWD) is down more than -1%.

Energy stocks and service providers are weaker today, with WTI crude oil down more than -1%. Valero Energy (VLO) and Devon Energy (DVN) are down more than -2%, and Phillips 66 (PSX), Marathon Petroleum (MPC), APA Corp (APA), ConocoPhillips (COP), Diamondback Energy (FANG), and Occidental Petroleum (OXY) are down more than -1%.

Atlas Energy Solutions (AESI) is up more than +19% after announcing a purchase agreement with Wyoming Machinery Company for $340.5 million of Balance of Plant equipment for a power generation project.

People Inc. (PPLI) is up more than +9% after the Wall Street Journal reported that MGM Resorts International is discussing making a bid for the company.

Humana (HUM) is up more than +8% to lead gainers in the S&P 500 after Barclays upgraded the stock to overweight from equal weight with a price target of $515.

Akamai Technologies (AKAM) is up more than +7% after agreeing to a seven-year $11.6 billion deal to provide computing power to Anthropic.

Twilio (TWLO) is down more than -6% after HSBC downgraded the stock to reduce from hold with a price target of $211.

Lionsgate Studios (LION) is down more than -4% after JPMorgan Chase initiated coverage on the stock with a recommendation of underweight and a price target of $9.

Comcast Corp (CMCSA) is down more than -2% after KeyBanc Capital Markets downgraded the stock to underweight from sector weight with a price target of $18.

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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