Closing Recap

Wednesday, September 10, 2025

US equity futures gained slightly overnight on ORCL’s big jump and ahead of today’s PPI reading as investors continued to price in Fed rate cuts off the disappointing jobs numbers and revisions, though the early gains came all in the large-cap names. Gains continued post-data as Core PPI came in below expectations on both a mo/mo and yr/yr basis, with the mo/mo actually down 0.1%. The expected probability of a rate cut at the next meeting continued to hold at 100% but the probability of a 50bps cut moved from 7.3% to 9.6% on today’s PPI. The implied December 2025 rate moved from 3.657% to 3.631%, while the implied rate at December 2026 dipped from 2.882% to 2.847%. Early breadth saw advancers ahead by 2:1 as small caps were mixed with IWM (+0.39%) versus SPY (+0.59%) and QQQ (+0.36%). Technology (+2.28%), Energy (+1.37%) and Utilities (+1.11%) were early sector outperformers among S&P ETFs, while Consumer Discretionary (-0.70%), Consumer Staples (-0.71%) and Health Care (-0.71%) led the underperformers lower with six sectors gaining versus five declining. Today’s Fear and Greed Index stood at 54/100 (Neutral) versus 51 (Neutral) last week and 58 (Greed) last month.

In noteworthy data, Barclays raised its 2025 year-end target for the S&P 500 for the second time in three months with it now standing at $6,450 as corporate earnings have shown strength and the US economy continues to look resilient. Citi and HSBC also have boosted S&P 500 targets recently. On rate cut potential, Barclays now sees three cuts by the Fed before year end, while Wells Fargo called for five cuts by mid-2026. On the relevance of the ORCL rally today, @bespokeinvestnoted, “Of the 25 largest stocks in the S&P 500, only three have rallied more than 30% in reaction to earnings. $NFLX on 1/23/13 (+42.2%), $NVDA on 5/8/03 (+33.1%), and $PLTR on 2/5/24 (+30.8%). All three were much smaller when they had those moves than ORCL is now.” ORCL climbed to the tenth largest stock in the S&P 500 with the early gains. On S&P performance, @charliebilello noted the index closed yesterday at its 22nd all-time high for 2025, building on last year’s 57 all-time high closes. On the PPI mo/mo decline, @KobeissiLetter pointed out it was only the second negative reading since March 2024. 

Heading into the final hour of trading, stocks had turned mixed on the day. Breadth remained slightly in favor of advancers by 7:6 as small caps underperformed with IWM (-0.23%) versus SPY (+0.14%) and QQQ (-0.15%). Utilities (+1.73%), Technology (+1.50%) and Energy (+1.50%) remained outperformers among S&P sector ETFs, while Consumer Staples (-0.81%), Health Care (-1.00%) and Consumer Discretionary (-1.26%) remained the underperformers with six sectors gaining versus five declining, so seemingly a fairly orderly market fade with no particular rotation. Tomorrow we see CPI, so expect that to be the catalyst for the day with whatever shifts it creates in Fed-cut expectations.

• July wholesale inventories revised to +0.1% (consensus +0.2%) from +0.2%; U.S. July wholesale sales +1.4% (consensus +0.2%).

• WTI crude futures gained overnight and extended to the upside following the weaker PPI and rising expectations for multiple Fed cuts ahead. Corporate earnings continue to hold up sufficiently well, or better, and the Fed is running out of reasons to hold the line on rates (payrolls, PPI) though we will know more after CPI tomorrow. Even today’s crude inventory surprise build wasn’t sufficient to keep futures down and the October contract settled higher by $1.04/bbl, or +1.66%, to $63.67.

• In Beauty: COTY was downgraded to Hold from Buy at Bernberg as continued retailer destocking and the recalibration of Coty’s Consumer Beauty division is likely to delay the growth inflection to Q3 of 2026.
• In Restaurants: Convenience-store operator RaceTrac struck a deal to purchase PBPB for roughly $566Min an all-cash deal, expected to close in the fourth quarter, that values Potbelly at $17.12 per share, about a 32% premium to Tuesday close.

• In Auto Suppliers: LEA was downgraded to Neutral from Buy at Bank America noting shares are currently trading below historical valuation but see little room for the stock to re-rate higher given the challenges the automotive industry is currently facing as the lack of support from auto production is a hurdle for Lear to deliver growth and margin expansion. The firm also cut BWA to Neutral from Buy saying recent contract awards are supportive to growth, but they won’t come to fruition until 2027-plus and the firm thinks investors want to see an inflection in company results to support stock momentum.

• In FinTech/Payments: Klarna (KLAR) 34.31M share IPO priced at $40.00, above the $35.00-$37.00 expected target range and raising $1.37B in its initial public offering. UPST shares were notably weaker after 3rd party research saying big deceleration in loan volume in Aug, ~20% below street QTD.
• In Lending: RKT was upgraded to Buy from Neutral at Bank America and raised tgt to $24 from $21 saying they see Rocket as a strong beneficiary of rate cuts as it will likely spur an increase in both purchase and refi – also sees the close of the Mr. Cooper acquisition as a positive near-term catalyst.
• In Financial Services: RDDT price tgt raised to $300 from $230 at Jefferies saying the online forum could see over 35% upside to its fiscal 2027 revenue estimates.
• In Asset Managers: CNS preliminary assets under management of $90.4B as of August 31, 2025, an increase of $1.8B from assets under management of $88.6B at July 31, 2025.

• Several stock offerings in the Biotech space, raising cash as AMLX 17.5M share Spot Secondary priced at $10.00; DNTH 6.49M share Secondary priced $33.00 and RAPP 9.62M share Secondary priced at $26.00.
• GOSS was upgraded to Buy from Neutral at UBS and raised tgt to $9 from $1.25 as views the stock’s current risk/reward as compelling into the Phase 3 pulmonary arterial hypertension data in February 2026.
• GLSI said its breast cancer therapy, GLSI-100, got U.S. FDA’s "fast track" designation. The therapy is being tested in a late-stage trial for patients with HER2-positive breast cancer who have the HLA-A*02 genotype, and who finished standard treatment.
• JNJ said the FDA approved its drug delivery system for patients with a type of bladder cancer, the drugmaker said on Tuesday, offering a potential alternative to surgically remove the organ.
• NVO said it will cut 11.5% of its workforce in an effort to revive growth and combat competition from U.S. rival LLY and compounded copycat drugs; said the new restructuring plan would save $1.25B annually.
• TVTX shares rise after the FDA informed the company that an advisory committee is no longer needed for its supplemental drug application for the treatment of a rare kidney disorder.

• Healthcare Facilities: ACHC was downgraded to Neutral from Buy at Bank America and trim tgt to $25 as now sees greater headwinds from cuts to Medicaid state directed payment programs than previously estimated.

• In Transports: SAIA was upgraded to Positive from Neutral with a price target of $360, up from $340. The firm says Saia’s mid-quarter update and its talks with management suggest a "growing distance" from the company’s challenged fiscal Q1 report. Susquehanna expects Saia’s Q2 earnings to "snap-back." It now sees more upside potential than downside risk to estimates.
• In Aerospace & Defense: AVAV reported strong Q1 results, the first quarter with BlueHalo results fully integrated into the company as revenue and adj. EBITDA beat consensus by 3% and 7% respectively while bookings were just shy of $400M in the quarter with funded backlog growing to $1.1B. JOBY and UBER to expand global partnership to bring blade flights to Uber app as deal to bring blade’s helicopter & seaplane services to Uber app as early as 2026; BA reaches tentative labor deal with striking defense workers.

• In Rare Earth sector: Iluka Resources shares fell overseas after the rare earths miner to suspend production at its Cataby mine, Synthetic Rutile Kiln 2 in Western Australia due to subdued demand for mineral sands. Production to be suspended for around six months at SR2, for ~12 months at Carnaby.

• In the EDA Sector: SNPS shares tumbled after messy results for Q3, missing on the top and bottom line as analysts noted some concerning items came out of Q325, primarily tied to the IP business with SNPS outlining three headwinds that likely will have multi-quarter impacts. #1) China export restrictions in Q3 delayed design starts which impacted IP revenues, #2) A large foundry customer is pivoting its technology which means IP blocks developed for that customer will no longer yield results in 2H25 and #3) SNPS is undertaking a reallocation of resources in IP to better align with growth opportunities in the industry (shares of competitor EDA company CDNS shares fell in sympathy).
• Cloud Software: RBRK posted Q2 ARR beat by $27M, if slightly below the $30M+ the last several quarters, and some benefit from early renewals/expansions, while EBIT & FCF significantly beat by $54M & $61M, respectively. FY26 ARR guide raised about in line with FQ2 beat and FCF raised by $80M.
• In Hardware & Components; HPQ was downgraded from Outperform to In Line at Evercore, which reflects the fact that the stock is trading around its price target of $29 and to see further upside it needs to see a clear path to EPS/FCF numbers moving higher, but that is unlikely to happen in the near term.
• In Semiconductors: TSM reported August sales of NT $335.7B, which was +33.8% y/y compared to the 5-year seasonality of +25.3%, and +3.9% m/m which compared to the 5-year seasonality of 9.4%; chip names like AVGO, AMD, others rallying after Oracle forecast faster-than-expected revenue growth in its cloud infrastructure unit.
• In Media & Telecom: VMEO enters into definitive agreement to be acquired by Bending Spoons for $1.38B; Vimeo stockholders to receive $7.85 per share in cash.
• In AI/Data Centers: NBIS announces proposed private offering of $2 billion of convertible senior notes and said also to offer $1B Class A shares (a day after shares jumped 49% on MSFT order). CRWV shares strong again after that ORCL report with other AI names on fire as well. Also, the WSJ reported Oracle, OpenAI sign $300B computing deal, sources note.
• Apple (AAPL) hosted its September product event the day prior at which the Company introduced the new iPhone 17 lineup, Watches, AirPods, with new features/upgrades introduced being largely consistent with expectations. Keybanc noted for the semi supply chain coverage, it sees slightly positive implications for CRUS, QRVO, neutral implications for SWKS and negative implications for AVGO and QCOM. As expected, Apple announced the internally developed C1X modem (iPhone 17 Air), the successor to C1 (iPhone SE4), and the internally developed N1 chip for Bluetooth and Wi-Fi 7 to be used in all four SKUs.