Closing Recap

Wednesday, September 24, 2025

US equity futures gained slightly overnight with no major inflation data this morning and no Fed speakers scheduled until after the close. Equities briefly resumed their uptrend at the open and once again all was right with the world, for about twenty minutes, then trended sideways near the unchanged level. By mid-morning, breadth slightly favored advancers by 9:8 as small caps outperformed in a flattish tape with IWM (+0.05%) versus SPY (+0.00%) and QQQ (-0.04%). Energy (+1.53%), Consumer Discretionary (+0.75%) and Industrials (+0.22%) were early outperformers among S&P sector ETFs, while Materials (-0.34%), Communications (-0.60%) and Real Estate (-0.64%) led the underperformers with six sectors gaining versus five declining. Sentiment-wise, Fear and Greed remained in the Greed column at 59/100 compared to 58 (Greed) last week and 61 (Greed) last month. By midday, equities were solidly in the red with no particular catalysts to influence the day.

In data of note today, on money on the sidelines waiting for a pullback, @charliebilello noted 74% of the time historically you would have seen an opportunity but 24% of the time the market kept pushing higher. He also noted that over a ten-year period cash only outperformed the S&P 500 15% of the time, while never outperforming over a 25-year span. That said, @KobeissiLetter noted retail investors’ cash allocation in August was only 16.5%, the lowest in four years and down 3.2 points since April. The average since 1987 is 22% for reference. He also noted institutional cash levels fell to 3.9% in September among global managers, one of the lowest readings in twelve years.

Stocks remained lower into the final hour of trading but were off the absolute lows of the day. Breadth shifted in favor of decliners by almost 2:1 as small caps became underperformers with IWM (-0.74%) versus SPY (-0.35%) and QQQ (-0.39%). Sector performance also shifted in favor of decliners with Energy (+1.3%), Consumer Discretionary (+0.7%) and Utilities (+0.70%) outperforming among S&P sector ETFs, while Communications (-0.83%), Real Estate (-1.01%) and Materials (-1.23%) were primary underperformers with four sectors gaining versus seven declining. Tomorrow, we see jobless claims, durable goods and another read on GDP so there should be plenty for Fed watchers to discuss.

• WTI crude futures gained overnight and extended to the upside as the day progressed despite equities fading simultaneously. Today’s inventory report showed a crude draw versus and anticipated build and was met with an initial paring of gains but later reversal higher, with the November contract settling +$1.58/bbl, or +2.49%, at $64.99. Incremental support to today’s move was attributed to Russian supply concerns as President Trump again mentioned the possibility of more US sanctions against Russian exports.

• Specialty Retail: Canaccord noted channel check show Owala was again the most popular hydration brand with 53% of associate mentions (up from 50% in Canaccord’s June checks), followed by 27% for Stanley (down from 35%) and 20% for YETI (up from 15%). Canaccord found that Owala continues to be the trendy water bottle but new kids on the block HydroJug and Bink could become legitimate contenders. Moreover, Stanley’s fade continues, while YETI continued to receive praise for its quality
• In Food & Beverages: KDP was downgraded to Equal Weight from Overweight at Barclays in light of this heightened complexity in the KDP narrative near term by separation of company, and it lowers its price target to $26 based on its SOTP analysis.

• In Autos: GM was upgraded to Buy from Neutral at UBS and raised tgt to $81 from $56 saying combined with a strong FCF profile, a capital allocation policy that could support buying back high-single-digit% of the shares annually, and an inexpensive valuation, sees a positive setup for the shares. STLA said it will temporarily halt production at some of its plants in Europe, amid lagging demand for models including the Alfa Romeo Tonale sport utility vehicle.
• In Food Delivery/Ride Hailing: Keybanc noted its latest Mobility & Delivery Survey highlighted improving adoption rates across the ridesharing, food delivery, and grocery delivery industries. DASH strikes the firm as a clear share gainer in this environment and remains KEYB’s top gig economy pick. Also believes both OW rated UBER and SW rated LYFT are benefiting from rational competition, product innovation, and favorable expense dynamics. For CART, acknowledges more competition elevates share loss concerns.

• In Industrials: MIR entered into a definitive agreement to acquire Paragon Energy Solutions from Windjammer Capital Investors for approximately $585 million in cash; MIR also lowers its FY rev growth outlook to 4.5%-6% from prior 5%-7% view. In E&C space, PWR was upgraded to Buy from Hold at Jefferies and raised tgt to $469 from $398 as believe the Co. is set to benefit from continued TAM expansion across data centers, renewables, transmission and pipelines.
• In Aerospace & Defense: AIR reported F1Q26 (Aug.) EPS of $1.08 vs. the Street’s $0.98 and revenue of $740M was well above the Street’s $689M as the beat was driven primarily by Parts Supply strength, including notable improvement in its USM business. AXON was initiated at Overweight and $893 tgt at Piper based on Axon’s continued product innovation driving a larger TAM across a very sticky market that it sees going through a renaissance, including into high-growth areas like AI and drones/robotics. KBR said to pursue tax-free spin-off of its mission technology solutions (MTS) segment, which caters to military and other government agencies.
• In Energy/Utility: BE was downgraded to Underperform at Jefferies on rich valuation saying given the limited visibility into post-2026 growth and some early signs of over-exuberance, finds that risks to the downside outweigh further upside at the current levels. The U.S. Department of Energy intends to cancel more than $13 billion in funds that the Biden administration had pledged to subsidize wind, solar, batteries and electric vehicles, it said on Wednesday. It was not immediately clear which funds were being targeted. The department did not immediately respond to a request for more details.
• In Metals & Mining: FCX said it expects consolidated sales forecast in Q3 to be about 4% lower for copper and around 6% lower for gold than July 2025 estimates (from July forecast of consolidated sales of 1 billion pounds of copper and 350 thousand ounces of gold) and also confirms injury to two members in the mud rush incident at the Grasberg Block Cave mine in Indonesia; WOR shares tumbled early on results.
• In Transports: KNX was downgraded to Neutral from Positive at Susquehanna, cutting tgt to $43 from $52 after cutting estimates across the logistics and trucking group sector, saying pricing and margin improvement remain in the distance and that Q3 supply chain "snap-back" was modest in truckload. GXO was upgraded from Neutral to Buy at Goldman Sachs and raised tgt to $68 from $52 saying now believes that the company’s organic growth outlook is improving, in the near term based on contract wins and Wincanton revenue synergies, and in the medium-term based on advances in warehouse automation and robotics, likely leading to an acceleration in outsourcing.

• In Banks: Jefferies previews Q3 earnings for banks and said top picks include CFG, HBAN, FITB, EWBC, FLG, VLY, WAL and WBS as expect trends to show continued PPNR growth, positive NIM/NII progression, solid loan and deposit growth and stable credit quality. We anticipate the majority of banks under our coverage to deliver both sequential & Y/Y NIM and NII growth in 3Q, with the potential for modest upward revisions among those with greater liability sensitivity. They also upgraded VLY to Buy from Hold.
• In FinTech: OWL is buying $7B of “buy now, pay later” loans originated by PYPL in the U.S. The loans are part of PayPal’s "pay in 4" offering that allows consumers to break up purchases into four interest-free payments over six weeks. PayPal will remain responsible for all customer-facing activity tied to the loans. AFRM was maintained Buy and $110 PT at Jefferies saying they continue to see significant room for growth based on market penetration following CFO meeting

• ARVN was downgraded to Neutral from Buy at Bank America after the company and PFE said they plan to find a partner to develop metastatic breast cancer (mBC) drug vepdegestrant (vepdeg).
• CYCN said it is relaunching as a neuropsychiatric-focused firm after signing a licensing deal with the Massachusetts Institute of Technology (MIT).
• HRMY said its experimental drug, ZYN002, did not meet the main goal in a late-stage trial testing it in patients with Fragile X syndrome; said the drug did not meet the main goal of improvement in social avoidance primarily due to a higher-than-expected placebo response rate.
• QURE announces positive topline results from pivotal phase I/II study of AMT-130 in patients with Huntington’s Disease. Pivotal study met primary endpoint; high-dose AMT-130 demonstrated statistically significant 75% disease slowing at 36 months (shares of CLPT advanced as STAT news noted “sells the imaging equipment that allows the precise surgical implantation of the gene therapy into the brain.")
• VOR was upgraded to Buy from Hold at Stifel with $55 tgt as believes Telitacicept – already with three regulatory approvals (SLE/RA/MG) and two planned regulatory submissions (pSD/IgAN) in China – is poised to potentially emerge as a best-in-class dual BAFF/APRIL antagonist.

• In Software: ADBE was downgraded to equal weight from overweight at Morgan Stanley on decelerating digital media annual recurring revenue; said with limited confidence in timing that catalyst path, it sees cleaner near-term narratives elsewhere in Software and move to the sidelines. NOW was upgraded to Overweight at Morgan Stanley and raise tgt to $1,250 from $1,040 saying consistent execution has been overshadowed by risks related to generative artificial intelligence and federal spending concerns. ORCL filed for seven-part notes offering – is looking to raise $15 billion in corporate bond sales, Bloomberg reported.
• In AI/Data Centers: OpenAI, ORCL and Softbank (SFTBY) are announcing five new U.S. AI data center sites under Stargate, OpenAI’s overarching AI infrastructure platform. The combined capacity from these five new sites—along with our flagship site in Abilene, Texas, and ongoing projects with CRWV – brings Stargate to nearly 7 gigawatts of planned capacity and over $400B in investment over the next three years. BABA shares jumped after revealing plans to ramp up AI spending past an original $50 billion-plus target. NBIS price tgt raised to $207 at Northland and named new top pick and raising terminal period revenue estimate due to increased AIaaS TAM from $560B to $800B and market share estimate from 3% to 9%"
• In Media & Advertising: IAS agreed to be acquired by Private equity firm Novacap, valuing IAS at about $1.9 billion as IAS shareholders to receive $10.30 per share in cash, a 22% premium on stock’s last close.

• Semicap (AMAT, LRCX) active after MU results as Wells Fargo noted they view Micron positive comments on DRAM & NAND positive for sector.
• Bank America raised ests and targets for STX to $255 from $215 and WDC to $141 from $123 and raising HDD estimates on resilient pricing dynamics after recently announced price increases as sees a potential for 20% upside to EPS from pricing. Bofa raises its F26, F27, and F28 gross margin estimates for STX .
• MRVL announces additional $5B stock repurchase authorization and $1B accelerated share repurchase program.
• SNDK comes into the day rising 22 of the last 23 trading days – Benchmark raised its PT to $125 (from $85) today following increasing Samsung memory chip prices and MU results.