After Hours Report
The major averages finished mostly lower on Wednesday after an initially positive session unraveled following the FOMC decision and Fed Chair Kevin Warsh's press conference. The S&P 500 (-0.4%) and DJIA (-1.2%) ended in negative territory, while the Nasdaq Composite finished unchanged after trading as much as 0.9% higher earlier in the session. The Russell 2000 (-0.4%) and S&P Mid Cap 400 (-0.6%) also finished lower.
Stocks had been mostly higher through early afternoon, supported by a sharp retreat in crude oil and renewed strength across technology stocks. The market showed little initial reaction when the FOMC unanimously voted to raise the target range for the fed funds rate by 25 basis points to 3.75-4.00%, marking the first rate hike since July 2023.
Selling picked up during Mr. Warsh's subsequent press conference, however, as his comments on persistent inflation reinforced expectations that today's move may be the beginning of a broader tightening cycle. Mr. Warsh said the "plain fact is that inflation is too high, and has been for too long," adding that recent inflation readings have not convinced him that underlying trends have meaningfully improved. The hawkish interpretation was also supported by the latest dot plot, which showed 16 of 18 Fed officials expecting at least one additional rate hike this year.
Treasury yields moved sharply higher in response, with the 2-year note yield jumping from 4.60% shortly before the policy announcement to settle at 4.73%, while the 10-year note yield climbed from 4.95% to 5.01%. The increase in rates took considerable steam out of the broader market, although many of the day's sector trends had already been established before the FOMC announcement.
The information technology sector (+0.1%) was one of just three S&P 500 sectors to finish at or slightly above its flat line, though it surrendered nearly all of an earlier gain. The PHLX Semiconductor Index (+0.6%) similarly finished well below its session high after providing much of the market's early leadership. Advanced Micro Devices (AMD 512.50, +8.30, +1.65%) and Intel (INTC 101.05, +3.91, +4.03%) were notable gainers, with Intel supported by a Reuters report that SK hynix Inc. (SKHY 174.87, +0.04, +0.02%) is in exploratory talks with the company over potential U.S. chip fabrication capacity at Intel's delayed Ohio project.
Strength outside semiconductors was less convincing, with Microsoft (MSFT 490.30, -6.82, -1.37%) and IBM (IBM 237.60, -10.77, -4.34%) among the DJIA's laggards.
The health care sector (flat) and utilities sector (flat) also avoided losses, while the industrials sector (-0.1%) finished as another relative outperformer. Semiconductor-linked strength across AI infrastructure plays helped offset pronounced weakness in freight names after J.B. Hunt Transport (JBHT 236.73, -36.32, -13.30%) warned that higher fuel costs and a lag in passing those costs through to customers will create a meaningful third-quarter earnings headwind. Axon (AXON 468.42, +26.34, +5.96%) also recovered some ground following yesterday's sharp retreat.
The financials sector (-1.6%) was one of the day's most pronounced laggards and weakened further as Treasury yields climbed following the Fed decision. Banking stocks bore the brunt of the selling, leaving the Invesco KBW Bank ETF down 2.9%. Crypto-related names were another source of weakness after the Clarity Act failed to advance in the Senate yesterday, with Coinbase Global (COIN 164.51, -7.60, -4.42%) and Robinhood Markets (HOOD 104.42, -6.03, -5.46%) extending their recent declines.
The energy sector (-3.0%) finished at the bottom of the standings as crude oil reversed a portion of yesterday's surge. WTI crude settled $3.41 lower (-3.2%) at $102.41 per barrel after CNBC reported that the Saudi pipeline damaged in recent Houthi attacks is expected to restart operations within days.
Wednesday's session ultimately hinged on the market's interpretation of the Fed's policy outlook rather than the rate hike itself. The widely anticipated 25-basis-point increase initially generated little response, but Mr. Warsh's emphasis on persistent inflation and the prospect of additional tightening drove Treasury yields higher and erased most of the market's earlier gains during the afternoon.
U.S. Treasuries had a mixed showing on Wednesday, as the front retreated after the Fed announced a 25-basis point rate hike while the long end outperformed with the long bond near its starting level. The 2-year note yield settled up seven basis points to 4.73%, and the 10-year note yield settled up one basis point to 5.01%.
- Russell 2000: +15.2% YTD
- Nasdaq Composite: +11.8% YTD
- S&P 500: +10.3% YTD
- S&P Mid Cap 400: +10.2% YTD
- DJIA: +7.1% YTD
Reviewing today's data:
- 09/12 MBA Mortgage Applications Index -4.1% (Prior -2.7%)
- Total retail sales increased 1.2% month-over-month in August (Briefing.com consensus: 0.9%) following an upwardly revised 0.5% decline (from -0.6%) in July. Excluding autos, retail sales surged 1.4% (Briefing.com consensus: 0.5%) following an upwardly revised 0.2% decline (from -0.3%) in July.
- The key takeaway from the report is that it is indicative of ongoing strength in consumer spending on goods. Take gas station sales out of the equation, and retail sales were still up 1.1% month-over-month; core sales, which exclude autos, gasoline, building materials, and food services, jumped 1.4%.
- Aug Retail Sales, ex-auto 1.4% (Briefing.com consensus 0.5%; Prior -0.2%)
- Aug Import Prices 0.7% (Prior -0.3%)
- Aug Import Prices ex-oil 0.8% (Prior 0.3%)
- Aug Export Prices 0.6% (Prior -1.4%)
- Aug Export Prices ex-ag. 0.7% (Prior -1.6%)
- Jul Business Inventories 0.8% (Briefing.com consensus 0.2%; Prior 0.1%)
- Sep NAHB Housing Market Index 32 (Briefing.com consensus 34; Prior 35)
- 09/12 EIA Crude Oil Inventories -0.64M (Prior -0.39M)
Overseas:
- Europe: DAX +0.5%, FTSE +0.3%, CAC +0.6%
- Asia: Nikkei +0.7%, Hang Seng +0.2%, Shanghai +0.7%
Commodities:
- Crude Oil +3.41 @ 102.41
- Nat Gas -0.03 @ 2.89
- Gold +54.80 @ 4388.40
- Silver +1.09 @ 64.93
- Copper +0.07 @ 6.51
After-Hours Spotlight:
- President Trump posts on Truth Social that rates should be "1% or less" because the U.S. has "best credit in the world"
- Amer Sports (AS) raises Q3 revenue guidance slightly above expectations...AS +0.3%
- Fluence (FLNC) lowers FY26 guidance citing supply chain issues affecting its U.S. production...FLNC -17.1%
- Generac (GNRC) enters long-term supply deal with Amazon tied to up to $8 bln of generator purchases...GNRC +40.2%
- Halozyme (HALO) proposes $1.05 bln convertible senior notes offering due 2033...HALO -1.5%
- Lennar (LEN) misses by $0.05, misses on revs, deliveries decreased 3% to 20,840 homes; Issues Q4 guidance, including Deliveries of 22,000-23,000 homes, lowers FY26 deliveries guidance to 80,000-81,000 homes...LEN -3.3%
For a full rundown of today's market and after hours developments, see Live In Play
- Earnings/Guidance (Full Earnings Calendar):
- Aurora Cannabis (ACB) reaffirms FY27 Q2 growth outlook, says Safari Flower acquisition to add revenue and EBITDA
- Centene to reaffirm 2026 adjusted diluted EPS guidance of greater than $4.80 (vs $4.80 consensus) at conference (CNC)
- Invesco Mortgage Capital (IVR) provides August financial update; Total investment portfolio including TBAs of $8.3 bln as of August 31, 2026
- LuxExperience (LUXE) reports strong +7.6% net sales growth ex-FX and improved adj EBITDA profitability in Q4 FY26 now set for accelerated Top- and Bottom-Line growth in FY27
- Oscar Health (OSCR) raises 2026 earnings outlook, improves medical loss ratio guidance ahead of Investor Day
- Trip.com Group (TCOM) beats by RMB1.33, reports revs in-line
- Vivmark Residential publishes updated investor presentation and (VMRK) provides operating update
- General News
- EU looking to make Canada an associate member Reuters
- CEOs from Meta and NVIDIA reject slowdown calls (META, NVDA) FT
- AEVEX selected for SkyRange contract worth up to $92.2 mln over three years (AVEX)
- American Express expands Aspire lounge partnership in Canada (AXP)
- BioNTech: OncoC4 (BNTX) receives FDA Fast Track Designation for cesalatamig, an investigational PD-1/VEGF bispecific antibody
- Clear Secure President Barkin will transition to an advisory role on October 15, 2026 (YOU)
- Criteo expands Tyroo reseller partnership into Thailand, Malaysia and the Philippines (CRTO)
- D.R. Horton authorizes additional $5.0 bln share repurchase program – 8-K filing (DHI)
- FTAI Aviation authorizes $500 mln share repurchase program
- HIVE Digital Technologies' BUZZ HPC partners with ProCogia to deliver end-to-end sovereign AI to enterprise and SMB clients across Canada, the U.S., and Europe
- IBM unit Anderon finalizes $1 bln CHIPS award agreement with Commerce Department
- LuxExperience authorizes up to $50 mln ADR repurchase program – 6-K filing (LUXE)
- Medtronic says FDA clears LigaSure RAS Maryland instrument for Hugo robotic surgery system (MDT)
- Microsoft (MSFT) raises quarterly dividend 8% to $0.98 per share
- New Found Gold Corp. to declare commercial production at its 100% owned Hammerdown Gold Mine located in Central Newfoundland, Canada (NFGC)
- Nokia Defense partners with C3IA to expand role in UK military communications modernization (NOK)
- One Stop Systems (NVDA) gets ~$400,000 missile defense modeling award
- OpenAI considering new funding round (MSFT) The Information
- OpenText partners with Cohere on agentic AI offering for governments, regulated industries (OTEX)
- Planet (PL) wins German federal satellite services contract with up to €25 mln over 5 years
- Reckitt Benckiser planning more U.S. investment (RBGLY) WSJ
- Siri lags in AI race (AAPL) WSJ
- SK Hynix may contract Intel to fabricate chips (SKHY, INTC) Reuters
- Sphere (SPHR) and Lyft (LYFT) sign multi-year venue partnership
- TechnipFMC (FTI) wins PETRONAS offshore Malaysia subsea contract
- Telesat and SatPort infrastructure sign global build-to-suit agreement to expand Telesat Lightspeed ground network (TSAT)
- U.S. wants Mexico to tighten rules on Chinese AI hardware exports, according to WSJ (EWW)
- Uber, Costco (COST) expand Uber Eats delivery partnership to 47 states
- Versamet Royalties Corp will be added to the MVIS Global Junior Gold Miners Index, the underlying benchmark index for the VanEck Junior Gold Miners ETF (GDXJ)
- Upgrades:
- Alvotech (ALVO) upgraded to Overweight from Underweight at Barclays, tgt $8
- AB InBev (BUD) upgraded to Buy from Hold at Deutsche Bank
- BMW (BMWYY) upgraded to Buy from Hold at Berenberg
- Paychex (PAYX) upgraded to Peer Perform from Underperform at Wolfe Research
- Rexford Industrial Realty (REXR) upgraded to Market Perform from Underperform at Raymond James
- Rocket Pharmaceuticals (RCKT) upgraded to Buy from Hold at Needham, tgt $9
- Similarweb (SMWB) upgraded to Buy from Hold at Needham, tgt $11
- Union Pacific (UNP) upgraded to Buy from Neutral at UBS, tgt $339
- Downgrades:
- Braskem (BAK) downgraded to Sell from Neutral at UBS, tgt $1.50
- Cellectis (CLLS) downgraded to Underweight from Overweight at Barclays, tgt $1.30
- Hartford Financial Services (HIG) downgraded to Neutral from Outperform at Mizuho, tgt $154
- Meritage Homes (MTH) downgraded to Hold from Buy at Truist, tgt $72
- Nu Holdings (NU) downgraded to Market Perform from Outperform at Itau BBA, tgt $18
- Stellantis (STLA) downgraded to Hold from Buy at Berenberg
- Others:
- Airbnb (ABNB) assumed with an Equal Weight at Morgan Stanley, tgt $170
- Acushnet Holdings (GOLF) initiated with an Equal Weight at Stephens, tgt $88
- American Bitcoin (ABTC) initiated with a Buy at BTIG, tgt $15
- Arcus Biosciences (RCUS) initiated with a Buy at TD Cowen
- Bandwidth (BAND) initiated with a Neutral at BofA, tgt $60
- Booking Holdings (BKNG) assumed with an Overweight at Morgan Stanley, tgt $230
- Brinker (EAT) initiated with a Buy at Seaport Research, tgt $230
- CAVA Group (CAVA) initiated with a Buy at Seaport Research, tgt $58
- Chipotle Mexican Grill (CMG) initiated with a Neutral at Seaport Research
- Darden Restaurants (DRI) initiated with a Buy at Seaport Research, tgt $240
- Domino's Pizza (DPZ) initiated with a Neutral at Seaport Research
- Dutch Bros (BROS) initiated with a Buy at Seaport Research, tgt $50
- Expedia (EXPE) assumed with Underweight from Equal Weight at Morgan Stanley, tgt $235
- Faeth Therapeutics (FTH) initiated with a Buy at Guggenheim, tgt $70
- Five9 (FIVN) initiated with an Outperform at FBN Securities, tgt $40
- First Tracks Biotherapeutics (TRAX) initiated with a Buy at Guggenheim, tgt $100
- Janus Living (JAN) initiated with a Neutral at Compass Point, tgt $37
- McDonald's (MCD) initiated with a Neutral at Seaport Research
- Corvex, Inc. (MOVE) initiated with a Buy at Chardan, tgt $18.75
- Pinnacle Financial Partners (PNFP) initiated with an Outperform at Hovde Group, tgt $125
- Restaurant Brands International (QSR) initiated with a Buy at Seaport Research, tgt $88
- Shake Shack (SHAK) initiated with a Neutral at Seaport Research
- Starbucks (SBUX) initiated with a Neutral at Seaport Research
- Solid Biosciences (SLDB) initiated with an Outperform at RBC Capital, tgt $18
- Sylvamo (SLVM) initiated with an Overweight at Wells Fargo, tgt $47
- Tarsus Pharmaceuticals (TARS) reinstated with an Overweight at Barclays, tgt $110
- Texas Roadhouse (TXRH) initiated with a Buy at Seaport Research, tgt $195
- Wendy's (WEN) initiated with a Neutral at Seaport Research
- Yum! Brands (YUM) initiated with a Buy at Seaport Research, tgt $162
- Zentalis Pharmaceuticals (ZNTL) initiated with an Outperform at William Blair
- Econ Data (Thursday):
- 8:30 ET: August Housing Starts (Briefing.com consensus 1.325 mln; prior 1.239 mln), Building Permits (Briefing.com consensus 1.410 mln; prior 1.443 mln), weekly Initial Claims (Briefing.com consensus 209,000; prior 206,000), Continuing Claims (prior 1.774 mln), and September Philadelphia Fed survey (Briefing.com consensus 35.0; prior 47.4)
- 10:00 ET: August Pending Home Sales (Briefing.com consensus 0.5%; prior -2.3%)
- 10:30 ET: Weekly natural gas inventories (prior +40 bcf)
- Earnings:
- Monday (September 14)
- Pre-Market: None
- After-Hours: PLAY
- Tuesday (September 15)
- Pre-Market: None
- After-Hours: TCOM
- Wednesday (September 16)
- Pre-Market: None
- After-Hours: LEN
- Thursday (September 17)
- Pre-Market: None
- After-Hours: None
- Friday (September 18)
- Pre-market: None
- Afternoon: None
- Monday (September 14)
