Mid-Morning Look

Friday, September 26, 2025

U.S. stocks are mostly higher, looking to snap its first 3-day losing streak since the middle of August and end the week in positive territory after the Federal Reserve’s preferred inflation gauge (core PCE) grew at a marginally slower pace last month, helping keep interest-rate cut expectations intact. In addition to the data, there were several tariff headlines moving names/sectors today. President Trump last night announced that 25% tariffs on imported heavy trucks would commence from October 1. From the same date there will be a 50% tariff on imported kitchen cabinets, bathroom vanities and associated products, along with 30% tariffs on upholstered furniture. Trump said this was due to such products flooding into the US. The tariff announcement requiring most clarification is on pharmaceuticals. Trump said that from October 1, a 100% tariff would apply to “branded or patented” pharmaceutical products, unless the company concerned has commenced construction of manufacturing plants in the US. Also, the WSJ reported that the Trump administration is weighing a new plan to reduce dramatically the U.S.’s reliance on semiconductors made overseas, hoping to spur domestic manufacturing and reshape global supply chains. The policy’s goal is to have chip companies manufacture the same number of semiconductors in the U.S. as their customers import from overseas producers. Lots of news this morning heading into the weekend, but early market strength coming after another “buy the dip” moment late yesterday. One last item for markets to watch, if Congress fails to pass and the president sign a funding bill (either full-year appropriations or a short-term resolution) by midnight on Sept 30, 2025, the US government will partially shut down at 12:01 a.m. EDT on October 1, 2025. This marks the start of fiscal year 2026, when current funding expires.

• US Aug personal saving rate 4.6% down from 4.8% in July while the Aug personal income +0.4% (above consensus +0.3%) was in-line with July +0.4% and Aug Personal Spending +0.6% (vs. consensus +0.5%) and above July +0.5%. lastly, Aug real consumer spending +0.4% vs July +0.4%.
• University of Michigan surveys of consumers sentiment final Sept 55.1 (consensus 55.4) vs preliminary Sept 55.4 and final Aug 58.2; current conditions index final Sept 60.4 vs prelim Sept 61.2 and final Aug 61.7; the expectations index final Sept 51.7 vs prelim Sept 51.8 and final Aug 55.9.
• University of Michigan surveys of consumers 1-year inflation outlook final Sept 4.7% vs prelim 4.8% and final Aug 4.8% and 5-year inflation outlook final Sept 3.7% vs prelim 3.9% and final Aug 3.5%.

• In Home furnishing/improvement: The sector was pressured today, with shares of Wayfair (W), WSM, RH shares falling the most after the Trump administration said they were imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, starting October 1st, 2025. Additionally, we will be charging a 30% Tariff on Upholstered Furniture. The reason for this is the large scale “flooding” of these products into the United States by other outside Countries. Shares of LZB rallied given that the majority of its products are made in North America. ETD shares gain with the company stating in July that most of its furniture is made in North America.
• Large Cap Pharma: ABBV, PFE, JNJ, LLY, MRK among large cap Pharma names active after President Trump said last night the U.S. will impose a 100% tariff on “all any branded or patented Pharmaceutical Product” entering the country from Oct. 1. The measure will not apply to companies building drug manufacturing plants in the U.S., Trump added. He said that the exemption covers projects where construction has started, including sites that have broken ground or are under construction.
• In Crypto Miners: JP Morgan made several ratings and tgt changes; they upgraded RIOT to Overweight (tgt to $19 from $15, while downgraded IREN to Underweight (tgt to $24 from $16), and CLSK downgraded to Neutral (tgt to $14 from $15) and raise CIFR tgt to $12 from $6. The firm applies a 50% probability that Cipher, IREN and Riot sign HPC colocation deals at remaining near-term capacity they are shopping, using Core Scientific’s ~800 MWs of committed capacity to CRWV as an upper limit on near-term demand from a single tenant. Under this framework (while still giving Cipher credit for its deal with Fluidstack, and IREN credit for its Cloud Services Business), JPMC sees the most relative upside at Riot (+14%). Separately, RIOT was upgraded to Buy from Neutral at Citigroup and raised tgt to $24 from $13.75.

• APA +4%; as energy stocks again leading the S&P behind oil prices, with HAL, DVN, SLB all up over 3% on the day as oil on track for their best weekly gains in more than 3 months, up around 5%.
• BA +4%; the WSJ reported FAA to ease restrictions on Boeing aircraft deliveries as Boeing is slated to regain authority from the Federal Aviation Administration to perform final safety checks on its 737 MAX jets; shares of aero parts suppliers and metals names like CRS, ATI and others rallied as well.
• CRNX +23%; after the FDA approved its drug, Palsonify, to treat a rare hormonal disorder called acromegaly, making it the first once-daily oral pill available for patients in the country. Treatment options for acromegaly include surgery to remove pituitary tumors, radiation therapy and medications.
• GFS +7%; The U.S. is planning to ask chipmakers to manufacture at home as many semiconductors as their customers import, the WSJ reported (positive news for INTC, MU, GFS and negative for AAPL).
• PCAR +4%; advanced after President Trump said last night, “In order to protect our Great Heavy Truck Manufacturers from unfair outside competition, I will be imposing, as of October 1st, 2025, a 25% Tariff on all “Heavy (Big!) Trucks” made in other parts of the World.
• UNP +1%; as the railroad on track for an 8^th straight day of gains and NSC for a 7^th straight.

• COST -2%; after results; reported a modest Q4 EPS beat, capping off another +10% EPS growth year while comps (ex-fuel and FX) remain strong at +6% in the U.S., +7% in Other International and +8% in Canada; renewal rates dipped modestly due to a specific campaign.
• CNXC -9%; shares tumbled on results/guidance as Q3 adj EPS $2.78 missed the consensus est. $2.86; Q3 adj EBITDA $359.2M vs. est. $380M and adj Operating Income $305.1M vs. est. $322M.
• IREN -11%; downgraded to Underweight from Neutral at JPMorgan and raise tgt to $24 from $16 as the firm updated bitcoin miner ratings and price targets to reflect changes in bitcoin mining profitability, and upside from high performance compute colocation and cloud services.
• RH -2%; along with weakness in Wayfair (W), WSM after the Trump administration said they were imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, starting October 1st, 2025. Additionally, we will be charging a 30% Tariff on Upholstered Furniture.