Closing Recap

Wednesday, October 08, 2025

After snapping a seven-day win streak yesterday, US equities enjoyed small gains overnight as the government shutdown dragged on for another day. The early gains perhaps reflected optimism ahead of Fed speaker comments and FOMC meeting minutes out later in the day. Wells, for one, was out with commentary this morning saying they expect 25bps cuts from the Fed at both the October and December meetings, with two additional cuts in 1H26. Surely, an abundance of economic data releases will impact opinion once the government reopens, but for now Hopium is the drug of choice for Fed watchers. In broad sentiment, today’s Fear & Greed Index registered 53/100 (Neutral) versus 50/100 last week (also Neutral) and 50/100 (Neutral) last month. By mid-morning, breadth favored advancers by 2:1 as small cap gains split the large caps with IWM (+0.45%) versus SPY (+0.36%) and QQQ (+0.65%). Technology (+1.04%), Materials (+0.64%) and Industrials (+0.34%) were outperformers among S&P sector ETFs, while Consumer Staples (-0.37%), Real Estate (-0.40%) and Energy (-0.74%) paced the underperformers with five sectors gaining versus six declining.

In recent noteworthy datapoints, as the S&P 500 continues to hit new all-time highs it also continues to get more concentrated. Per @PeterMallouk, NVDA, MSFT and AAPL now represent over 21% of the index … a record for the top three stocks. On home purchases cancellations, @charliebilello noted 56k US home purchases were cancelled in August (15% of all homes under contract), setting a new record for the month of August. From @charliebilello, on defensive stocks, the ratio of Consumer Staples ETF to the S&P 500 has moved to the lowest since the dot-com bubble peak in March 2000. We noted yesterday, defensive sub-sectors Food, Beverage & Tobacco and Household & Personal Products are trading at the bottom of our z-score rankings, each near or slightly over one standard deviation below their ten-year average forward multiples on both P/E and EV/EBITDA. Lastly, a sanity check from @KobeissiLetter, mentioning the S&P 500 is up 34% in six months and has only made this type of move ten other times since 1930. Eight of the ten prior ended with the index lower by an average 3.5% two weeks later. 

Heading toward the final hour of trading, stocks had held gains through the release of Fed minutes and were back on track for more record highs. Breadth continued to favor advancers by 2:1 as small caps remained split versus large caps among broad gains with IWM (+1%) versus SPY (+0.55%) and QQQ (+1.15%). Sector performance also remained generally in line with early trading as Technology (+1.7%), Industrials (+0.85%) and Materials (+0.6%) were outperformer, while Consumer Staples (-0.51%), Communications (-0.4%) and Energy (-0.5%) remained among the underperformers. Performance across the leading sectors was more concentrated with AMD, ANET, DELL, SW, FCX, JBHT and PWR as the largest contributors.

• WTI crude futures also enjoyed solid overnight gains before pulling back a bit in early trading. Today’s stronger EIA inventory build data precipitated some profit taking before buying resumed on hopes for future Fed cuts to propel economic growth and oil demand. November WTI futures settled +$0.82/bbl, or +1.33%, at $62.55.

• In Housing/Building Products: homebuilders (KBH, PHM, LEN, DHI) extend recent declines, follows recent downgrade of the sector by Evercore noting a meaningful demand response has not yet emerged despite modestly improved affordability. BLD said it acquires specialty products and insulation (SPI) in all-cash transaction valued at $1B and said deal immediately accretive to EPS
• In Autos: TSLA was reiterated Buy and raised tgt from $440 to $483 at Stifel to reflect more confidence in FSD and Robotaxi; auto suppliers LEA, VC, and MGA declined after Reuters reported Ford (F) to shut down f-150 lightning plant in Michigan next week due to aluminum factory fire, union official notes.

• In Financial Services: in credit scores, EFX said, in response to “FICO’s monopoly-like doubling of their mortgage credit score prices to $10 in 2026" it was reducing VantageScore 4.0 mortgage credit scores more than 50% from Fair Isaac’s 2026 prices, to $4.50, through the end of 2027. Fair Isaac last week unveiled new pricing models that will allow mortgage lenders to calculate and distribute FICO scores directly to borrowers and bypass credit bureaus like Equifax.
• In Stablecoin: The adoption of stablecoins could generate an additional $1.4 trillion in demand for U.S. dollars by 2027, if enough overseas investors want to own these digital assets, JPMorgan said. The stablecoin market, which JPM said is currently worth $260B, could grow to as much as $2 trillion in their high-end scenario. Approximately 99% of stablecoins, such as Tether, are pegged 1:1 to the dollar.

• GILD said for Q3, currently expects $170.4M in acquired IP&D expenses; sees acquired IPR&D expenses to represent charge of about $0.11 to both GAAP and non-Gaap EPS.
• INCY was downgraded from Outperform to Perform at Oppenheimer on valuation after shares have outperformed YTD (+26% vs NBI +18% and S&P 500 +14%) based on high expectations for Opzelura, povorcitinib, mCALR, CDK2i, and new management.
• IONS upgraded to Overweight from Neutral at JP Morgan and raise tgt to $80 from $49 coming off of an active September (AP benefit for Olezarsen in sHTG, positive topline phase III data in Alexander Disease) and encouraging updates on the broader pipeline at IONS’s Innovation Day.
• ZBIO said it has secured global rights to develop and commercialize an experimental drug from China-based InnoCare Pharma for multiple sclerosis and other autoimmune conditions under a licensing deal potentially worth more than $2 billion.

• In Medical Equipment: DHR was downgraded from Buy to Neutral at Redburn saying its premium valuation has been supported by visible growth, but despite end markets stabilizing in 2024, the 2025/26 growth outlook remains well below historical levels. Agilent (A) was upgraded to Buy from Neutral at UBS with a view that the company is poised to sustain its growth leadership, which offers scope for multiple expansion vs peers. PEN was upgraded to Buy from Hold at Needham as expects a meaningful acceleration in PEN’s revenue growth in 2026 driven by: 1) the upcoming Thunderbolt launch, 2) the STORM-PE trial results, 3) the easing of headwinds in China, and 4) the Ruby XL launch.

• In Package Delivery: FDX was downgraded to Neutral from Overweight at JPMorgan and trim tgt to $274 from $284 saying its recent channel checks in the less-than-truckload industry warrant a lower multiple in its sum-of-the-parts analysis for FedEx’s freight segment.
• In Industrials/Machinery: Daimler truck (DTRUY said sales in its North America Trucks segment shrank by nearly 40% from the year before, at 30,225 units; OTIS was upgraded from Peer Perform to Outperform at Wolfe as they acknowledge that there are downside risks to Q4 guidance, but believes this is widely anticipated (and discounted) and see a number of offsetting positive developments that could drive incrementally more bullish positioning.
• In E&C/Power sector: PRIM price tgt raised to $160 at Jefferies saying the company is poised for its next chapter of growth and expects another upward estimate revision cycle unfolding in the next 6-12 months on accelerated as gas gen, data center oppty realized, ongoing utilities margin expansion, comms tailwinds, gas midstream infrastructure upside.

• JOBY prices $513.9M underwritten offering of 30.5M common shares at $16.85 per share to accelerate production and commercial deployment of eVTOL fleet.
• KTOS was downgraded to neutral from Buy but raised tgt to $105 from $72 at B Riley on belief that valuation is getting stretched, less based on probable NPV of future FCF, and more correlated with escalating multiples on high-flying defense tech comps, both public and private.
• NOC was upgraded to Buy from Hold and raise tgt to $700 from $575 as part of a Q3 earnings preview for the defense group as sees strong free cash flow for Northrop after 2028 as the B-21 bomber program becomes cash profitable and the Sentinel weapons system gets closer to the production stage.
• RKLB announced it has signed another multi-launch deal with Institute for Q-shu Pioneers of Space, Inc. (iQPS). The multi-launch contract includes three dedicated Electron missions that will launch no earlier than 2026 from Rocket Lab Launch Complex 1 in New Zealand.
• SPIR has been awarded an EUR3 million contract renewal by EUMETSAT, Europe’s meteorological satellite agency. The renewal is part of a two-year operational contract starting August 14, 2024.

• Precious metal/miners stocks saw big gains early, extending their 2025 advance as gold prices hit new highs and silver prices their best levels since 2011; shares of silver miners AG, CDE, HL, PAAS, SVM, WPM among leaders early.
• In Materials: CRML shares rose in rare earth space after saying expects to supply up to 15% of rare earth concentrate production annually from its Tanbreez Project in Greenland to REalloys; agreement follows 10-year agreement to supply heavy rare earth concentrate to Ucore Rare Metal’s UCU.V U.S. government-funded Louisiana processing facility

• PENG shares stumbled as AI computing infrastructure maker posted Q4 EPS that beat analysts’ estimates but revenue that missed and issued a forecast for fiscal 2026 that was well below expectations (guided FY26 sales growth 6% plus/minus 10% vs. 17% growth y/y and the 10% growth expected.
• TASK shares tumbled after the company announced that at a special meeting of TaskUs stockholders, the company did not receive the votes necessary to approve the transaction agreement with an affiliate of Blackstone.
• In Media & Advertising:
• PUBM announced the latest results of a multi-year integration of NVDA technology to leverage accelerated computing for programmatic advertising’s unique requirements across the open internet. Elon Musk’s artificial intelligence startup xAI is raising more financing than initially planned, tapping backers including NVDA to lift its ongoing funding round to $20B – Bloomberg.
• Quantum Compute names fell (RGTI, IONQ, QBTS, QMCO, QUBT): Barron’s reported Quantum computing promises a lot, but that doesn’t mean investors aren’t at risk of getting burned, Barron’s wrote. The collection of Rigetti Computing (RGTI), D-Wave Quantum (QBTS), IonQ (IONQ) and Quantum Computing (QUBT) has risen nearly fourfold on average over the past year, but the technology has limited commercial use and generates relatively little revenue, according to the authors. The article contends that the bubble may keep inflating until it is tested by fundamentals https://tinyurl.com/mrxzk5vf
• In Robotics: SoftBank Group Corp. (SFTBY) announced that on October 8, it entered into a definitive agreement with ABB Ltd (ABBNY) to acquire ABB’s robotics business for a total purchase price of $5.375B (shares of other companies tied to robotics jumped in sympathy TER, ARBE).
• In Networking: CSCO unveiled the Cisco 8223, the industry’s most optimized routing system for efficiently and securely connecting data centers and powering the next generation of artificial intelligence (AI) workloads. The Cisco 8223 rises to the challenge as the only 51.2 terabits per second (Tbps) Ethernet fixed router built for the intense traffic of AI workloads between data centers. Cisco today also announced its latest Silicon One innovation — the P200 chip — which sits at the core of the 8223.