Earnings Optimism Lifts Stocks

The S&P 500 Index ($SPX) (SPY) is up by +0.42% today, the Dow Jones Industrial Average ($DOWI) (DIA) is up by +0.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.40%.  December E-mini S&P futures (ESZ26) are up +0.41%, and December E-mini Nasdaq futures (NQZ26) are up +0.36%.

Stock indexes are moving higher today, supported by optimism about earnings.  According to data compiled by Bloomberg Intelligence, Q3 S&P 500 profits are expected to climb by +25% from a year earlier, up from a July estimate of 22%. Q3 earnings season begins next week when US money center banks report. 

Also, concerns about slowing demand for AI-infrastructure stocks eased today after people familiar with the matter said OpenAI is expecting to reach or exceed $70 billion in annualized revenue by the end of the year, refuting a report from the Financial Times on Thursday that said OpenAI is on track to generate annualized revenue of roughly $50 billion based on its current performance.

Stock gains are limited today after the University of Michigan US Oct consumer sentiment index fell more than expected to a 5-month low.  Also, the University of Michigan Oct inflation expectations increased, pushing bond yields higher.  The 10-year T-note yield is up +5 bp to 5.27%. 

The University of Michigan US Oct consumer sentiment index fell -1.8 to a 5-month low of 46.3, weaker than expectations of 47.6.

The University of Michigan US Oct 1-year inflation expectations rose to a 5-month high of 4.7% from 4.6% in Sep, and the 5-10 year inflation expectations rose to a 5-month high of 3.5% from 3.4% in Sep.

Nov WTI crude oil prices (CLX26) are slightly higher today as signs point to lower US crude output and threats to Gulf Coast refining capacity from Hurricane Isaias.  Roughly 1.28 million bpd of crude output, or 63% of US Gulf crude production, has been shut in due to the hurricane, which is expected to make landfall along the Gulf Coast later today or tomorrow, threatening 500,000 bpd of refining capacity.  Also, due to Iranian attacks on shipping in the Strait of Hormuz, shipping costs out of the Middle East are soaring, with freight rates from the Middle East to China jumping to $1.4 million a day, the most on record.  Gains in crude are limited

after President Trump said the US would not attack Iran ahead of next month’s midterm elections, citing “productive discussions” with Iran. 

Markets are discounting a 19% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is up +0.82%.  China's Shanghai Composite recovered from a 2.5-month low and closed up +0.05%.  Japan's Nikkei-225 Stock Average closed down -0.02%.

Interest Rates

December 10-year T-notes (ZNZ6) are down by -9 ticks today.  The 10-year T-note yield is up +5.1 bp to 5.278%.  T-notes are under pressure today from stronger stocks, which curbs safe-haven demand for government debt.  Also, an increase in the University of Michigan US Oct inflation expectations to a 5-month high is bearish for T-notes. 

European government bond yields are moving lower today.  The 10-year German bund yield is down -1.0 bp to 3.485%.  The 10-year UK gilt yield is down -3.0 bp to 5.451%.

Italy's Aug industrial production fell -1.3% m/m, weaker than expectations of no change and the biggest decline in a year.

Markets are discounting a 11% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.

US Stock Movers

Optical-equipment makers are rallying today after Lumentum Holdings said its components are “completely sold out” through 2029 on high demand from tech companies clamoring for faster AI data centers.  Lumentum Holdings (LITE) is up more than +6% to lead gainers in the Nasdaq 100, and Applied Optoelectronics (AAOI) is up more than +4%. Also, Coherent (COHR) is up more than +1%.

Tower companies are gaining today after SpaceX said it had agreed to acquire a nationwide low-band spectrum license portfolio in a deal analysts say is a positive catalyst for the sector. Crown Castle (CCI) is up more than +12% to lead gainers in the S&P 500.  Also, American Tower (AMT) is up more than +7%, and SBA Communications (SBAC) is up more than +6%.

Humana (HUM) is up more than +11% after data from the Centers for Medicare and Medicaid Services showed improved ratings for the company’s Medicare Advantage contract, allowing it to earn bonus payments.

Telecom stocks are retreating today after SpaceX said it had agreed to acquire a nationwide low-band spectrum license portfolio, which will increase competition from satellite operators. T-Mobile US (TMUS) is down more than -9% to lead losers in the S&P 500 and Nasdaq 100.  Also, AT&T (T) and Verizon Communications (VZ) are down more than -7%.  In addition, Charter Communications (CHTR) is down -4%, and Comcast (CMCSA) is down more than -1%. 

Delta Air Lines (DAL) is down more than -2% to lead airline stocks lower after cutting its full-year adjusted EPS forecast to $5.10 to $5.60 from a previous estimate of $6.50 to $7.50, the midpoint below the consensus of $5.44.  Also, Alaska Air Group (ALK) is down more than -2%, and  American Airlines Group (AAL), United Airlines Holdings (UAL), and Southwest Airlines (LUV) are down more than -1%.

Fastly (FSLY) is up more than +6% after Oppenheimer upgraded the stock to outperform from perform, with a price target of $35.

Moderna (MRNA) is up more than +5% after the New York Times reported that there is a planned public-private partnership between Moderna and the National Institutes of Health (NIH) to fast-track the development and testing of cancer vaccines. 

Cboe Global Markets (CBOE) is up more than +4% after Morgan Stanley double-upgraded the stock to overweight from underweight, with a price target of $358.

Apple (AAPL) is down more than -2% to lead losers in the Dow Jones Industrials after cutting component orders for the iPhone 18 Pro and iPhone 18 Pro Max following weaker-than-expected demand.  Skyworks Solutions (SWKS), a supplier of Apple, also dropped more than -6% on the news.

Earnings Reports (10/9/2026)

Delta Air Lines Inc (DAL), Hingham Institution For Savings (HIFS), Nurix Therapeutics Inc (NRIX).

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