After Hours Report

The major averages finished broadly lower on Wednesday as a sharp increase in Treasury yields and another rise in crude oil weighed on the market, while semiconductor and mega-cap growth stocks gave back some of their strong gains from earlier in the week. The S&P 500 (-0.8%), Nasdaq Composite (-1.1%), and DJIA (-0.7%) ended with sizable losses, while weakness was more pronounced in the Russell 2000 (-1.8%). The S&P Mid Cap 400 (-0.6%) held up comparatively well.

Treasury yields were a major source of pressure throughout the session, with selling accelerating after preliminary September PMI data pointed to stronger business activity. The S&P Global U.S. Services PMI increased to 58.7 from 56.5 in August, while the Manufacturing PMI climbed to 57.0 from 53.9. The stronger readings reinforced expectations that additional monetary policy tightening could be needed and helped send yields sharply higher across the curve. Fed Governor Michael Barr (voting FOMC member) added to that pressure by saying his baseline is that further policy adjustments will likely be needed to ensure inflation returns to target in a timely fashion.

Rate-hike expectations moved accordingly, with the probability of a 25-basis-point increase to 4.00-4.25% at the October FOMC meeting rising to 66.4% from 55.4% yesterday, according to the CME FedWatch Tool. Pressure on Treasuries was compounded later in the session by relatively weak dollar demand and foreign participation in the $70 billion 5-year note auction, while the continued rise in crude oil provided another inflation-related headwind. The 2-year note yield climbed 14 basis points to 4.89% after reaching 4.94% intraday, while the 10-year note yield jumped 14 basis points to 5.11% after touching 5.13%.

The rise in rates weighed heavily on some of the market's recent leaders. The PHLX Semiconductor Index fell 1.2% following two exceptional sessions to begin the week, contributing to a 0.7% decline in the information technology sector. Mega-cap growth stocks also pulled back, leaving the Vanguard Mega Cap Growth ETF down 0.9%. Meta Platforms (META 744.10, +7.50, +1.02%) was a notable exception to that weakness, remaining higher amid continued enthusiasm surrounding its Muse AI agent. The stock's gain was not enough to prevent the communication services sector (-1.9%) from finishing among the day's weakest groups, however. Rate-sensitive areas faced some of the most pronounced selling pressure.

The utilities (-1.9%) and real estate (-1.5%) sectors finished sharply lower as Treasury yields surged, while the iShares U.S. Home Construction ETF dropped 2.5%. The consumer discretionary sector (-1.6%) was another notable laggard as higher interest rates and energy costs compounded several stock-specific concerns. Expedia Group (EXPE 259.04, -21.66, -7.72%) and Airbnb (ABNB 149.58, -12.23, -7.56%) suffered sizable losses amid worries that META's Muse AI agent could disrupt established online travel platforms.

McDonald's (MCD 238.35, -12.00, -4.79%) also finished among the day's weaker names after falling to a new 52-week low following the unveiling of its McDonald's > NEXT strategy. Investors reacted negatively to the plan's sizable spending commitments and lengthy timeline as the company contends with slowing U.S. comparable sales and weaker traffic.

Crude oil added another layer of pressure to the broader market, with WTI settling $1.94 higher (+2.1%) at $92.46 per barrel as a U.S.-Iran truce remained elusive. The move provided a clear benefit to energy stocks, leaving the energy sector (+0.9%) as the day's standout performer.

Selling was widespread beneath the major averages, with decliners outpacing advancers by more than 3-to-1 on both the NYSE and Nasdaq. Fewer than half of S&P 500 components are now trading above their 200-day moving averages, underscoring the deterioration in participation even after the strong technology-led start to the week.

Wednesday's retreat ultimately reflected renewed pressure from several of the market's most persistent macro headwinds. Stronger economic data and hawkish Fed commentary pushed Treasury yields sharply higher, rising crude oil added to inflation concerns, and recent semiconductor and mega-cap leaders pulled back. Those pressures extended well beyond technology, with pronounced weakness in small-cap and rate-sensitive stocks contributing to the broad nature of the decline.

• Nasdaq Composite: +15.9% YTD
• Russell 2000: +14.4% YTD
• S&P 500: +12.6% YTD
• S&P Mid Cap 400: +10.5% YTD
• DJIA: +7.2% YTD

Reviewing today's data:

• 09/19 MBA Mortgage Applications Index -1.5%; prior -4.1%
• September S&P Global U.S. Manufacturing PMI - Prelim 57.0; prior 53.9
• September S&P Global U.S. Services PMI - Prelim 58.7; prior 56.5

Overseas:

• Europe: DAX -0.6%, FTSE flat, CAC -0.4%
• Asia: Nikkei market closed, Hang Seng -1.0%, Shanghai -0.4%

Commodities:

• Crude Oil +1.94 @ 92.46
• Nat Gas +0.18 @ 3.15
• Gold -58.60 @ 4318.00
• Silver -1.65 @ 64.94
• Copper -0.09 @ 6.75

After-Hours Spotlight:

• China takes possession of F-35 parts diverted to Hong Kong, according to Bloomberg
• Everpure (P) reaffirms FY27 outlook and provides preliminary FY28 view at its Financial Analyst Meeting...P +6.9%
• H.B. Fuller (FUL) beats by $0.05, misses on revs; provides FY26 guidance...FUL -0.2%
• NeoVolta (NEOV) files for $200 mln mixed securities shelf offering...NEOV -22.6%
• NVIDIA (NVDA) CEO Jensen Huang says AI firms should not receive antitrust or liability exemptions, according to Reuters...NVDA -0.1%
• Stitch Fix (SFIX) beats by $0.04, misses on revs; provides Q1 (Mar) and FY27 guidance...SFIX -18%
• Viking Therapeutics (VKTX) proposes $200 mln common stock offering and $200 mln convertible notes deal due 2032...VKTX -8.2%

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • Cracker Barrel (CBRL) beats by $0.73, beats on revs; provides FY27 revenue guidance in line
  • General Mills (GIS) beats by $0.03, reports revs in-line; reaffirms FY27 EPS guidance
  • KB Home (KBH) beats by $0.16, reports revs in-line
  • Labcorp (LH) Holdings Inc. reaffirms 2026-2029 outlook following preliminary CMS lab payment rates
  • Manchester United (MANU) PLC Reports Fourth Quarter and Full Year Fiscal 2026 Results
  • NN Inc (NNBR) raises FY26 guidance above consensus
  • Worthington Enterprises (WOR) beats by $0.07, beats on revs
• General News
  • President Trump discloses updated stock positions
  • The U.S. and Iran held talks. Iran presented conditions for reopening the Strait of Hormuz, including lifting the naval blockade, releasing frozen Iranian assets, and ending the war on all fronts. Axios
  • Several Republicans running for congressional and gubernatorial offices in 2026 are calling for an end to the Iran war. CNN
  • President Trump and Chinese President Xi both agree that AI development shouldn't be slowed. Bloomberg
  • Treasury Secretary Scott Bessent could get a second job as President Trump's AI Czar. Semafor
  • President Trump's Board of Peace will introduce a $2.45 billion Gaza recovery plan. Axios
  • General Motors (GM) Mary Barra to attend dinner with President Trump and Chinese President Xi. Reuters
  • Midwestern Republicans want President Trump to restrict diesel exports, but Republicans from energy states are urging the president not to do so (see 9/22 13:56 for President Trump's call for a ban on diesel exports --- VLO, MPC, PSX, DK, ADM, GPRE, PBF, DINO). Politico
  • Abbott (ABT) partners with Berry Street to pair Lingo CGM with dietitian support
  • AC Immune (ACIU)'s Parkinson's vaccine meets all primary endpoints in Phase II VacSYn Part 1
  • Alphabet (GOOG): Google Cloud expands capital markets reach through strategic Murex partnership
  • Angi (ANGI) names former TEGNA CEO Michael Steib as CEO
  • ANI Pharma (ANIP) gets FDA approval for generic Afinitor Disperz oral suspension tablets
  • AstraZeneca (AZN) receives EU approval for Trixeo in asthma patients aged 12 and older
  • Best Buy (BBY) expands Amazon partnership to add Fire TV ad inventory to Best Buy Ads
  • Beyond Meat provided trademark infringement litigation update with Sonate Corporation, d/b/a Vegadelphia Foods and Dunkin’ Brands (DNKN)
  • Biomea Fusion (BMEA) discloses that trial results for its ongoing Phase I GLP-131 trial for BMF-650 are now expected in October 2026
  • Brighthouse Financial (BHF): Sixth Street-backed Talcott renews takeover interest, according to Bloomberg
  • Cardiol Therapeutics (CRDL) hits Phase III MAVERIC enrollment target early, expands trial to up to 150 patients
  • CGI (GIB) partners with D-Wave Quantum on enterprise quantum offerings
  • China reviewing its dependence on Broadcom (AVGO) switches. FT
  • Cineplex (AMC) appoints Bill Walker as CEO effective today; initiated a review of strategic alternatives
  • Elmet (ELMT) signs long-term tungsten offtake deal with Tungsten West's Hemerdon mine
  • FTAI (FTAI) expands GMF engine maintenance partnership in Asia-Pacific
  • GE HealthCare (GEHC) increases quarterly cash dividend to $0.04/share from $0.035/share
  • Glacier Bancorp (GBCI) increases quarterly dividend to $0.35/share from $0.33/share
  • Glencore Intl plc (GLNCY) partners with U.S. EXIM Bank to build strategic minerals reserve fund
  • Ionis (IONS) and Roche Phase 3 IgAN study meets interim primary endpoint for sefaxersen
  • Jana (SIX) Partners wants Six Flags to consider sale. WSJ
  • JP Morgan (JPM) considering using private credit to underwrite some credit card applications (BX, APO, ARES, CG, OWL, KKR, OBDC). WSJ
  • Meta (META) expected to introduce smart glasses with no camera today. Reuters
  • Meta (META)'s Muse could disrupt wealth managers, financial companies, and brokerages (SCHW, LPLA, RJF, AMP, JPM, C, BAC, WFC, GS, MS, XLF). WSJ
  • Meta (META)'s Muse reaches 500,000 users after first week. The Information
  • Microsoft (MSFT) will give DARPA access to Maryland quantum system. Reuters
  • MVB Financial (MVBF): Kobalt Labs partners with MVB Financial to automate manual compliance workflows for fintech partner collaboration, due diligence, ongoing monitoring and marketing compliance
  • News (NWS) Corp.'s Dow Jones launches WSJ geopolitical risk council to help leaders navigate global volatility
  • Novo Nordisk (NVO) CEO Mike Doustdar is open to upgrading the company's New York listing. FT
  • NW Natural (NWN) unit SiEnergy settles Texas rate case, pending RRC approval
  • Quantum X Labs (QXL) discloses that co-CEO Amihay Hadad intends to step down, effective immediately; co-CEO Yakov Baranes appointed as sole CEO
  • Roche's sefaxersen (RHHBY) meets primary endpoint in Phase III IgA nephropathy trial
  • RTX (RTX) awarded a $105.6 mln modification to previously awarded Air Force contract for Advance Medium Range Air-to-Air Missiles parts purchases
  • Sharon AI (SHAZ) partners with VAST Data to add confidential AI capability to AI Factory platform
  • Sionna Therapeutics (SION) provides restructuring estimates
  • SLB (SLB) wins Oman facility expansion contract from OQEP
  • SoftBank offering record yields on junk bonds. Bloomberg (SFTBY)
  • Sphere Entertainment (SPHR) signs multi-year technology partnership with Disguise
  • Spire Global (SPIR) wins $33.2 mln NOAA satellite weather data task order
  • Todd Boehly (LUKOY) has U.S. government support to bid for Lukoil assets. FT
  • TriSalus (TLSI) gets FDA 510(k) clearance for TriNav Advance embolization device
  • UBS AG (UBS) could be required to hold $17 bln more in capital following Swiss parliament vote, according to Bloomberg
  • V2X (VVX) awarded a $231.7 mln modification to previously awarded Air Force contract action
  • Viasat (VSAT) wins $42 mln initial Marine Corps SATCOM task order under $307 mln ceiling contract
  • Wave Life Sciences (WVE) starts Phase 2a trial of WVE-007 with tirzepatide in obesity

• Upgrades:
  • BP (BP) upgraded to Overweight from Neutral at JPMorgan
  • Editas Medicine (EDIT) upgraded to Buy from Neutral at Guggenheim, tgt $5
  • Graphic Packaging (GPK) upgraded to Overweight from Neutral at JPMorgan, tgt $11.50
  • Lakefront (LKFT) upgraded to Outperform from Sector Perform at RBC Capital, tgt $45
  • Microsoft (MSFT) upgraded to Buy from Hold at Stifel, tgt $575
  • RXO (RXO) upgraded to Neutral from Negative at Susquehanna, tgt $19
• Downgrades:
  • Accelerant (ARX) downgraded to Underperform from Market Perform at Raymond James
  • Autoliv (ALV) downgraded to Peer Perform from Outperform at Wolfe Research
  • CBIZ (CBZ) downgraded to Market Perform from Outperform at William Blair
  • Compass Therapeutics (CMPX) downgraded to Neutral from Outperform at Wedbush, tgt $1
  • Dauch (DCH) downgraded to Hold from Buy at Jefferies, tgt $7.10
  • PG&E (PCG) downgraded to Neutral from Buy at UBS, tgt $14
  • TotalEnergies (TTE) downgraded to Neutral from Overweight at JPMorgan
• Others:
  • Aevex (AVEX) resumed with a Buy at Jefferies, tgt $26
  • Amneal Pharmaceuticals (AMRX) initiated with an Outperform at Oppenheimer, tgt $27
  • Amphenol (APH) initiated with an Outperform at Bernstein, tgt $99
  • ANI Pharmaceuticals (ANIP) initiated with a Perform at Oppenheimer, tgt $85
  • Ardent Health (ARDT) initiated with a Market Perform at BMO Capital, tgt $11
  • Belden (BDC) initiated with a Buy at Needham, tgt $140
  • Beta Bionics (BBNX) initiated with an Overweight at Wells Fargo, tgt $28
  • Collegium Pharmaceutical (COLL) initiated with an Outperform at Oppenheimer, tgt $50
  • Community Health (CYH) initiated with a Market Perform at BMO Capital, tgt $3
  • CorMedix (CRMD) initiated with an Outperform at Oppenheimer, tgt $15
  • CoreWeave (CRWV) initiated with a Buy at UBS, tgt $120
  • Enhanced Group (ENHA) initiated with an Overweight at Cantor Fitzgerald, tgt $4
  • Guardian Pharmacy (GRDN) initiated with an Overweight at KeyBanc, tgt $52
  • HCA Healthcare (HCA) initiated with an Outperform at BMO Capital, tgt $495
  • HubSpot (HUBS) initiated with a Sector Perform at FBN Securities, tgt $230
  • Innoviva (INVA) assumed with an Outperform at Oppenheimer, tgt $35
  • Marvell (MRVL) initiated with a Buy at Seaport Research, tgt $270
  • onsemi (ON) initiated with a Buy at Seaport Research, tgt $100
  • ORIC Pharmaceuticals (ORIC) initiated with a Buy at BTIG, tgt $26
  • Pacira (PCRX) initiated with an Outperform at Oppenheimer, tgt $32
  • Porch Group (PRCH) initiated with a Buy at Texas Capital, tgt $20
  • Pulse Biosciences (PLSE) initiated with a Buy at BTIG, tgt $70
  • Semtech (SMTC) initiated with a Buy at Seaport Research, tgt $200
  • SiTime (SITM) initiated with a Neutral at Seaport Research
  • TE Connectivity (TEL) initiated with an Outperform at Bernstein, tgt $243
  • Tenet Healthcare (THC) initiated with a Market Perform at BMO Capital, tgt $265
  • Teva (TEVA) initiated with an Outperform at Oppenheimer, tgt $50
  • Toro Company (TTC) initiated with an Outperform at Oppenheimer, tgt $120
  • Vanda Pharmaceuticals (VNDA) initiated with an Outperform at Oppenheimer, tgt $10
  • Viatris (VTRS) initiated with an Outperform at Oppenheimer, tgt $25

• Econ Data (Thursday):
  • 08:30 ET: Initial Jobless Claims (Briefing.com consensus: 202K; prior 196K) and Continuing Jobless Claims (prior 1730K)
  • 08:30 ET: Q2 Current Account Balance (Briefing.com consensus: -$221.0B; prior -$228.6B)
  • 10:00 ET: August New Home Sales (Briefing.com consensus: 610K; prior 607K)
  • 10:30 ET: EIA Natural Gas Inventories (prior +44 bcf)

• Earnings:
  • Monday (September 21)
    • Pre-Market: None
    • After-Hours: None
  • Tuesday (September 22)
    • Pre-Market: AZO, MLKN, THO
    • After-Hours: KBH, WOR
  • Wednesday (September 23)
    • Pre-Market: CBRL, CTAS, GIS, PAYX
    • After-Hours: FUL, SFIX
  • Thursday (September 24)
    • Pre-Market: DRI, SNX
    • After-Hours: BB, COST, FDXF
  • Friday (September 25)
    • Pre-market: None
    • Afternoon: None