Closing Recap

Wednesday, September 17, 2025

U.S. stocks had been choppy for 2 ½ days heading into this afternoon’s FOMC policy meeting, holding around record highs for the S&P 500, Nasdaq, Dow and Russell 2000, awaiting word on rate cuts and the future outlook on cuts from Fed Chairman Powell today. The overall take of the FOMC policy meeting was dovish, showing one more cut than expected over the course of 2 years, but all-in-all was mostly in-line with market expectations. Smallcaps made the biggest initial move higher after the FOMC policy statement, most levered to short-term rate cuts as the Federal Reserve cut interest rates by 25-bps to 4%-4.25% and indicated it will steadily lower borrowing costs for the rest of this year, as policymakers responded to concerns about weakness in the job market. Newly appointed Fed Governor Stephen Miran, who joined the Fed on Tuesday and is on leave as the head of the White House’s Council of Economic Advisers, dissented in favor of a 50-bps cut. Fed projections imply additional 50 bps of rate cuts in 2025, 25 bps in 2026 and 25 bps in 2027. Fed policymakers see end-2025 PCE inflation at 3.0% versus 3.0% in June; core seen at 3.1% versus 3.1%. Fed policymakers see 1.6% GDP growth in 2025 versus 1.4% in June, see longer-run growth at 1.8% vs 1.8% in June. Reading deeper into today’s meeting showed the diverse view of the 19 Fed board members as the Dots showed: 9 of 19 see 2 more cuts, 2 of 19 see 1 more cuts, 6 of 19 see no more cuts, 1 sees 1 rate hike, and 1 sees 5 cuts (this is Stephen Miran). Treasury yields fell initially after the Fed statement at 2:00 but slowly pushed higher throughout Fed Chairman Powell’s presser/Q&A which pressured Smallcaps giving back much of its gains along with interest rate sensitive sectors. Prior to the move post FOMC, several banks (C, BAC, GS) hit fresh 52-week highs along with large cap Dow names (AXP, WMT, CAT). After it was all said and done today, the S&P 500 (SPX) closed where it started prior to the Fed meeting at 6,600.

• Treasury yields fell initially after the FOMC statement, with the 10-year yield dipping below 3.99% to lowest since April as the FOMC dots suggested two more -25 bp rate cuts this year. The long end is outperforming. The 10-year yield was down -4 bps to 3.990% and the 2-year is -2.5 bps lower at 3.480%, before reversing higher as the 10-yr ended above 4.06%.
• Oil prices ended lower after an initial jump following weekly inventory data. WTI crude fell -$0.47 or 0.73% to settle at $64.05 per barrel, Front Month Nymex natural gas fell 0.10% to settle at $3.1000. WTI crude oil rose initially after biggest crude draw in 3-months while gasoline inventories also saw a drawdown and distillates stocks rose for the 3rd straight week.
• Crude inventories fell by -9.285M barrels to 415.4 million barrels last week, the EIA said, compared with analysts’ expectations for a -857,000-barrel draw. Crude stocks at the Cushing, Oklahoma, delivery hub, fell by 296,000 barrels in the week. U.S. gasoline stocks fell by -2.3 million barrels in the week vs. ests for a 0.1-million-barrel build.​ And distillate stockpiles rose by 4 million barrels in the week to 124.7 million barrels.

• In Retailers: Puma (PUMSY) shares rallied after Germany’s Manager Magazin reported that two investors were ready to take the 29% stake held by the French billionaire Pinault family, paving the way for a potential takeover. Women’s Wear Daily (WWD) reported speculation grows that its rival Adidas (ADDYY) may be setting the stage for a possible takeover. https://tinyurl.com/2u93t72m
• In Consumer Staples/Beauty: ELF price tgt was raised to $160 from $135 at Bank America and adjusts its F26 sales growth to +26% vs +25% prior as it forecast better than expected elasticities, along with a strong brand launch at Rhode. Said expects slightly better sales contribution from Rhode in FQ2 ($44M vs $42M prior), with improving trends at ELF relative to price increases/elasticities to provide upside to sales growth.
• In Ride Hailing/Food Delivery: LYFT said it is teaming up with GOOGL’s Waymo, as plan to launch Waymo’s autonomous ride-hailing service in Nashville, Tenn., starting next year using Lyft’s fleet-management services, including vehicle maintenance, infrastructure and depot operations. Separately, LYFT price tgt was raised to $24 at Bank America citing L-T tailwinds from California and FreeNow while core remains strong. Shares of UBER came under pressure following the news.

• In Transports: Ahead of earnings, FDX was downgraded to In-Line from Outperform at Evercore and lowered its price target to $243 from $249 owing to ongoing demand headwinds that are likely to provide greater risk to near-term EPS estimates.
• In E&C sector: MTZ was upgraded to Outperform at Wolfe saying they see a favorable setup as it nears an inflection in gas infrastructure data center growth and utility CAPEX remain tailwinds. Renewables and fiber are stable. Wolfe sees MTZ delivering strong growth 2026+ and believe the value Gap to PWR narrows. Upgrade to Outperform with a $227 PT.

• In Real Estate Services: ZG was upgraded to Outperform at Bernstein and raised its tgt to $105 from $70 saying they are getting more comfortable given: recent execution on mid-teens revenue growth; the emergence of Rentals and Showcase; improving earnings quality and possibility of rates coming down.
• In Insurance: PGR downgraded from Outperform to Market Perform at BMO Capital and cut tgt to $250 saying while shares are indeed inexpensive to the tune of -21% vs the S&P 500 when assuming a profit margin that’s more normal/less good as competition increases. RYAN was upgraded to Outperform at Wells Fargo given recent pullback in shares putting valuation on par with the rest of the brokerage peer group, combined with organic growth and margins that continue to lead the group.
• In REITs: RITM agreed to buy PGRE for $1.6B, with holders to receive $6.60 per share, below the prior day closing price of $7.39. In research, in the Residential REIT sector, Goldman Sachs said sees a challenging 2H25 setup as they downgraded CPT to Sell, and AMH to Neutral and lower price tgts on both. Apartment and homes-for-rent REITS have lagged as supply has remained more elevated for longer than they thought, and weaker job growth coupled with slowing migratory inflows into Sunbelt markets has weighed on occupancy levels and residential rent growth.  

• JNJ said its experimental oral psoriasis drug, icotrokinra, has shown superior skin clearance compared to BMY’s Sotyktu in two late-stage head-to-head trials; said icotrokinra met both main and secondary goals when compared to placebo and Bristol’s Sotyktu at weeks 16 and 24 in adult patients in the trials.
• ORKA gave interim data from an early-stage trial of its experimental therapy for inflammatory diseases and announced a $180 million private placement.
• ROIV PH3 VALOR study of Brepocitinib 30 mg demonstrated clinically meaningful and statistically significant improvement compared to placebo on the primary endpoint and all nine key secondary endpoints.
• XFOR announces restructuring of business operations designed to drive long-term value creation, to cut workforce by 50%, save $13M annually and three executives to exit x4 pharmaceuticals.

• NFLX was upgraded to Buy from Hold at Loop Capital and raised tgt to $1,350 from $1,150 based on exceptional 3Q engagement, a strong 4Q content slate, higher long-term margin assumptions as each dollar of content are generating more revenue, which leads to higher earnings and free cash flow.
• STUB 34.04M share IPO priced at $23.50, the midpoint of $22.00-$25.00 target range
• In Towers: Keybanc lowered its AMT, CCI, and SBAC leasing/AFFO ests due to 1) churn from USM; 2) lower leasing expectations from DISH and NT churn from DISH; and 3) adjusting its individual Carrier leasing forecasts. The firm stills view AT&T’s acquisition of DISH’s spectrum as a LT positive, though with NT uncertainty; it is less optimistic SBAC can benefit, though believe AMT/CCI can.

• NTDOY was downgraded to Neutral from Outperform at Wedbush saying shares have reached their price target of ¥14,000, which believes fully prices in the best-case scenario of hardware and software unit sales over the next several quarters.
• NVDA shares slip after the Financial Times reported China’s internet regulator has ordered top technology firms to halt purchases of Nvidia artificial intelligence chips and cancel existing orders as part of a broader push to cut reliance on U.S. technology https://tinyurl.com/3x5v3utn (shares of BIDU have rallied).
• WDAY shares jumped after activist investor Elliott Management builds more than $2 billion stake in co, while voicing support for WDAY’s leadership; the company also said plans $5B stock repurchase by FY27 after authorized $4B share repurchase on 9/16; shares were also upgraded to Neutral from Underperform at Piper saying it has seen early signs that Workday’s efforts to increase relevancy in AI have accelerated.
• Quantum computing stocks rallied on Wednesday (IONQ, QBTS, RGTI, QUBT) on the Department of Energy’s announcement that it will partner with IonQ, Honeywell and the Electric Power Board of Chattanooga to develop technology use cases in space. In April, IonQ partnered with Tennessee’s EPB to jointly develop a quantum technology center. Honeywell owns a majority stake in Quantinuum, which recently closed a $600 million funding round. In May, Quantinuum announced a deal with Qatar’s Al Rabban Capital in what officials said could be a $1 billion joint venture over the next 10 years.