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As of mid-day trade today, U.S. equities are mixed in a quiet, range-bound session after Thursday’s record highs for the S&P 500 and Nasdaq. At midday indices are sitting at: Dow −0.38%, S&P 500 +0.06%, Nasdaq +0.47%, Russell 2000 −0.83%. Leadership skews toward aluminum, auto suppliers, managed-care (MCOs), GSEs, semis, software, insurance, parcels/logistics, grocers and Big Tech (TSLA stands out). Laggards include pharma (pressure on MRNA), networking/communications (ANET), trucking, homebuilders, casinos, cruise lines, apparel retail, athletic apparel and auto retailers. Treasuries are softer with a touch of curve steepening (yields +3–6 bps on the day) after a week of notable flattening. The dollar index is +0.2% (little changed on the week). Gold +0.3%, Bitcoin futures +0.5%. WTI +1.3% and pacing for a weekly gain after yesterday’s 2.0% drop.
Rates remain a modest headwind amid renewed stagflation chatter, but markets continue to price policy easing: a 25 bp cut is fully priced for next week’s FOMC and ~50 bp more by year-end. This week’s data mix supports “steady inflation / softer labor” narratives: August core CPI was in line (+0.3% m/m) with tariff-linked goods mixed, while August core PPI surprised cooler (−0.1% m/m; headline −0.1%). UMich prelim sentiment slipped to 55.4 (vs. 59.3 cons), with notable weakness in current conditions and expectations among lower- and middle-income cohorts; one-year inflation expectations held at 4.8% and five-year rose to 3.9%.
Macro and Policy Watch
Treasury Secretary Bessent will meet China’s Vice Premier He Lifeng in Madrid next week (fourth face-to-face) as groundwork for a potential Trump-Xi meeting later this year; Beijing warned Mexico against steep tariff hikes on Chinese goods. U.S. political/legal backdrop includes a court injunction blocking the attempt to fire Fed Governor Lisa Cook ahead of the FOMC. Trade and tariff rhetoric remains elevated on both sides of the Atlantic.
AI and Tech Remain a Bullish Anchor
Oracle (ORCL) posted a massive AI-driven RPO surge (+359% y/y to $455B; guiding >$500B this year) and mapped an aggressive OCI revenue ramp, reinforcing hyperscaler/sovereign demand and sustained capex. Conference chatter (Goldman Communacopia; Barclays Financials) pointed to a “healthy and expanding” AI end-market; banks highlighted consumer resilience, higher NII/fees, positive operating leverage and stable asset quality. Elsewhere: MSFT signed an MOU with OpenAI as the European Commission accepted commitments; ADBE was better-than-feared on ARR but flagged growth moderation/competition; ANET’s analyst-day tone underwhelmed; SMCI launched broad availability of NVDA Blackwell Ultra systems; BABA/BIDU are training some models on in-house chips but remain dependent on NVDA for top-tier stacks.
Healthcare and Retail Skew Softer
Pfizer (PFE) and Moderna (MRNA) face headline pressure from politicized COVID narratives. RH missed and guided down, citing tariff-related uncertainty and category dislocation. Media edges higher with continued Warner Brothers (WBD) strength after reports of a potential Paramount (PSKY) bid.
Positioning and Sentiment
AAII bull-bear spread fell to −22% (lowest since early May) even as systematic longs remain stretched—an ongoing contrarian support. Strong Treasury auctions (notably the 10-year stop-through; solid indirect bid at the 30-year) helped temper long-rate worries, though term premia and deficit dynamics keep the long end elevated.
Looking Ahead
Next week’s focal point is the September FOMC (widely expected −25 bps). Data docket features August retail sales, September Empire/Philly Fed, NAHB builder sentiment and August new-home sales, key inputs for the growth/consumption and housing reads into Q4.
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