Closing Recap

Friday, September 19, 2025

The incredible run for U.S. stocks continued its fairytale story, in a week capped by new record highs for the S&P 500, Nasdaq Comp, Dow Jones Industrials and Russell 2000 with the biggest weekly winners being Technology (XLK), Communications (XLC) and Consumer Discretionary (XLY) all up over 1% on the week boosted by lower interest rates from the Fed (25bps cut) and signs of more to come (50bps more in 2025, 25bps in 2026 and 25bps in 2027 as per FOMC dot plots). Stocks edged higher on the open and held higher in a narrow trading range all day in what continues to be a long 6-month stock market rally, with very shallow dips. No fear since the April lows, with investors pouring money not just into Mag 7 tech leaders (which remains the key drivers of the stock market), but many speculative/growth areas in recent weeks, see below of recent movers.

Technology and the AI euphoria trade has been the key market driver for months, helped by a consistent flurry of positive headlines that have kept the buying interest in tech week after week. Just the last 3-weeks: 1) GOOGL ripped after judge ruling not having to sell Chrome, 2) ORCL earnings and AI outlook boosted shares 30%, 3) AVGO surged on earnings/AI order, 4) INTC/NVDA collaboration pact yesterday, 5) TSLA massive momentum buying after break-out, 6) CRWD boosting software yesterday after guidance the day prior and the 7) $17B NBIS/MSFT pact among the biggest stories of late. There were also several sectors this week that saw massive buying, with huge gains in quantum compute names (IONQ, RGTI, QMCO, QUBT), drone/space names (ASTS, ACHR, JOBY, UMAC) and nuclear/power names, specifically small modular reactor names like OKLO, SMR, LEU, NNE on massive buying interest as speculative plays getting lots of continued love. Even US listed China stocks have seen resurgent demand with BABA, BIDU, etc. seeing good gains this month. Gold miners rebounded after their massive multi-month run (AEM, NEM, AUY, KGC) as gold prices remain not far off record highs. At some point the rich valuations and massive market rally will cool, but hasn’t happened yet.

In a post on Truth Social, President Donald Trump said: “I just completed a very productive call with President Xi of China. We made progress on many very important issues including Trade, Fentanyl, the need to bring the War between Russia and Ukraine to an end, and the approval of the TikTok Deal. I also agreed with President Xi that we would meet at the APEC Summit in South Korea, that I would go to China in the early part of next year, and that President Xi would, likewise, come to the United States at an appropriate time. The call was a very good one, we will be speaking again by phone, appreciate the TikTok approval, and both look forward to meeting at APEC!”

Is there any concern ahead of next week (so far seems no), a seasonally weak period for major averages overall. No indications based off this week’s market reaction but worth noting, in addition to weaker seasonality there is upcoming month/quarter end (selling) and earnings blackout window (lack of buying) into Q3 earnings. What else to watch next week, inflation data on Thursday and Friday (PCE, core PCE) as well as GDP data, earnings results from Micron (MU), AutoZone (AZO), Costco (COST), Jabil (JBL) and Accenture (ACN); Fed speakers back on the calendar after the Fed blackout lifted post FOMC meeting.

Regarding a government shutdown probability this year, Kalshi now see a 56% chance of a U.S. government shutdown this year. House Republicans will vote Friday on a stopgap bill to fund the government through Nov. 21, but the margin looks tight. Speaker Mike Johnson says it buys time for a broader budget deal, yet failure could trigger a partial shutdown after Sept. 30.

Fed speaker list for next week 9/22-9/26: Monday, Sept. 22: Federal Reserve Speakers: New York Fed President John Williams, St. Louis Fed’s Alberto Musalem and new Fed Governor Stephen Miran. On Tuesday, Sept. 23: Fed Vice Chair for Supervision Michelle Bowman is expected to discuss the economic outlook at 9 A.M. ET. Chair Jerome Powell is due to give a speech in Rhode Island at 12:35 P.M. On Wednesday, Sept. 24: San Francisco Fed President Mary Daly will speak on the economic outlook at 4:10 P.M. at the University of Utah. On Thursday, Sept. 25: Fed Governors Bowman and Michael Barr are expected to speak on bank supervision and regulation. Plus, Williams is due to speak at a conference on the U.S. dollar. On Friday, Sept. 26: Fed Speakers: Gov. Bowman scheduled to discuss monetary policy in New York.

• After hitting 4-year lows prior to the FOMC meeting, the dollar index (DXY) extended its rebound against most major currencies. The DXY was up 0.3% at 97.64 after falling -1% on Monday and Tuesday on expectations the Federal Reserve might flag a rapid series of rate cuts, now nearly flat for the week.

• In Education Sector: SCHL shares stumbled on results after reported a wider adjusted Q1 loss per share than the same period a year ago and posted steeper revenue declines from the year-ago period.
• In Autos: STLA was upgraded to Buy from Hold at Berenberg saying the company’s earnings recovery may take time, but the share narrative is improving on a better inventory situation in the U.S. and a supportive product pipeline ahead. VWAGY said it will take a 5.1 billion euro ($6 billion) hit from a far-reaching product overhaul at sportscar division POAHY, with slower roll-outs of electric models.
• In Food Delivery: AMZN has boosted its presence in Florida by striking a deal with Winn-Dixie to make the grocery chain’s products available for delivery through Amazon’s website and app (shares of CART, KR, WMT were among names moving on the news).
• In Casino & Gaming: The Statistics and Census Service reported Macau visitor arrivals totaled 4.219 million in August, growing 15.5% y/y (WYNN, LVS, MGM, CZR, MLCO).

• In Energy, Utility/Power names: another strong day for small modular reactor nuclear names, specifically OKLO, SMR, LEU, and NNE as they outperform the large nuclear power names CEG, NRG, VST, TLN. US oil drilling rig count rose 2 at 418 (down 70 vs year ago) in latest week per Baker Hughes while the Nat gas drilling rig count unchanged at 118 in week.
• In Transports: FDX reported Q1 adj. EPS of $3.83, up +6% y/y, and beating ests $3.59 ests. while above the mid-point of its prior $3.40-4.00 guide and revenue growth of +3.1% y/y was its best level for any quarter in three years; also reintroduced a full-year outlook, as management now expects F2026 adj. EPS in the range of $17.20-$19.00 (versus $18.19 last year) with F2026 revenue growth of +4-6%. UPS was downgraded to market perform at BMO Capital saying a recovery in demand remains elusive, particularly in the important B2B segment and macro challenges have been further heightened by shifting U.S. trade policies.
• In Industrials: Barclays initiated the North America environmental services sector with a positive industry view and Overweight ratings on GFL ($62 tgt), MEG ($35 tgt), XYL ($165 tgt), WM ($272 tgt), VLTO $120 tgt) and EW ratings on CLH, RSG and WTS and an Underweight on CWST $88 PT as sees steady growth profiles with high FCF generation enabling capital redeployment flexibility (M&A/buybacks), underpinning LT upside bias to estimates. Sales of heavy trucks are falling like the U.S. is headed for a recession, CNBC.

• In Information Service stocks: RBC Capital noted the pullback in Information Services stocks exposed to the Asset Management and Banking verticals following FDS’s results has created an attractive buying opportunity. In particular, RBC believes SPGI and MCO are well-positioned for a beat-and-raise scenario, driven by strong quarter-to-date issuance and tailwinds from the capital market recovery, the refinancing wall, and tight spreads. For MSCI, robust ABF growth fueled by fund flows should deliver a solid beat, though RBC is closely monitoring potential headwinds to net new subscription sales. Lastly, NDAQ should benefit from strength in U.S. Equity Derivatives, U.S. Cash Equities, and Index revenues.

• ESPR said partner, Otsuka Pharmaceutical, received approval from Japan’s health ministry to market Nexletol, a cholesterol-lowering pill, for patients with high cholesterol and familial high cholesterol.
• JSPR announced ~12.3M shares priced at $2.43 for $30M gross proceeds; the offering shares and pre-funded warrants accompanied by warrants to buy up to an additional ~12.3M shares.
• REPL was downgraded from Neutral to Underweight at JP Morgan and removes price tgt noting the regulatory path forward for RP1 is unclear and potentially challenging and believes accelerated approval is less likely following the company’s Type A meeting with the FDA earlier this week.
• VRCA said partner Torii Pharmaceutical secured Japanese approval for YCANTH (TO-208) to treat molluscum contagiosum. The decision from Japan’s Ministry of Health, Labour and Welfare triggers a $10M milestone payment to Verrica.

• In AI/Data Center: Chinese AI developer DeepSeek said it spent $294,000 on training its R1 model, much lower than figures reported for U.S. rivals, in a paper that is likely to reignite debate over Beijing’s place in the race to develop artificial intelligence https://tinyurl.com/2wvmesf9 . OpenAI has signed a deal with Apple device assembler Luxshare to make a consumer device, the Information reported on Friday.
• IT Services & Consulting: Shares of Indian IT service companies CTSH, INFY, WIT shares declined after reports President Trump plans to add a $100,000 fee to H-1B visa applications in the administration’s latest crackdown on a system it says is used by tech companies to avoid hiring American workers, according to multiple White House officials. Right now, applicants for the H-1B visa must pay a small fee to enter into the lottery system, and the winners of that lottery pay a larger fee to submit their full applications for vetting.
• In Software: BILL was upgraded to Buy from Hold at Truist and raise PT to $63 from $50 saying it is the right time to get bullish as believes there is upside to the Street’s core revenue growth forecasts, and there is positive optionality resulting from the new activist shareholders. KVYO was upgraded to Overweight at Morgan Stanley with raised tgt to $50 saying expanding from email marketing to a CRM platform for B2C businesses puts Klaviyo in front of an expanded market opportunity, supporting durable growth.
• In Memory/Storage/NAND sector (which has seen record highs for shares of MU, STX, WDC, SNDK), Mizuho today reiterated its Outperform and raising ests/PTs above consensus across coverage as see SNDK ($112 from $57), WDC ($120 from $87) and STX ($245 from $160) seeing tailwinds from eSSD, UltraSMR and HAMR launches, respectively. Following supply chain checks, they continue to see upside in the storage market with tight supply and price improvements in NAND/HDD markets.
• The Memory sector however was hit today, with pullbacks in MU mostly after Samsung clears Nvidia hurdle for 12-layer HBM3E supply, setting stage for HBM4 battle; Initial supply volumes are limited, but the qualification test pass is expected to support Samsung in the heated AI chip race. Volumes of 12-layer HBM3E chips to be supplied to Nvidia are expected to be relatively small, as Samsung is the third supplier to secure approval, following SK Hynix Inc. and MU, sources said https://tinyurl.com/3nk34wpz