Morning in New York: The S&P 500 May End the Week in Positive Territory

A daily review and forecast of events in the U.S. stock market by Mikhail Denislamov, Deputy Director of Capital Markets Research at Freedom Broker.

As expected, the Bank of Japan raised its policy rate today by 25 basis points to 1.25%—the highest level since 1995. The decision was approved by a vote of seven to two. Following the meeting, the yen weakened sharply against the dollar, though there was no sharp reaction in the bond market. The Nikkei 225 closed the session up 1.4%, indicating an improvement in global risk appetite even as central banks around the world raise interest rates.

Today’s macroeconomic calendar is relatively light. The consensus forecast calls for industrial production to rise 0.3% month-over-month in August, following a 0.2% increase the previous month, and for capacity utilization to rise to 76.4% from 76.3%. Following strong data on jobless claims and the Philadelphia Fed index, a stronger manufacturing report would be seen as confirmation of the Fed’s new policy. Speeches by Michelle Bowman and Jeffrey Schmid will draw additional attention—these will be among the first public comments from Fed officials following the September decision.

Anthropic reported that Claude is already independently “leading” about 26% of the company’s internal research and development—up from approximately 1% in March—and is collaborating with humans on more than 90% of AI research tasks. At the same time, about 30,000 agents are constantly performing research and engineering tasks within the company. The growing role of AI in creating the next generation of models reinforces the scenario of accelerated developer productivity and shorter development cycles, although it simultaneously raises the bar for oversight and security of autonomous systems. Overall, sentiment surrounding AI stocks remains positive, despite calls for industry regulation.

Oil prices continue to fall for the third consecutive trading session: WTI is down 1% to $100 per barrel. This trend is driven by earlier reports of a partial restoration of capacity on Saudi Arabia’s East-West Pipeline and an increase in oil shipments to Asia via Oman, which are easing concerns about the extent of supply disruptions.

No major earnings reports from large U.S. companies are scheduled for today. Next week, attention will shift to AutoZone (AZO) and KB Home (KBH) on Tuesday, Cintas (CTAS), Paychex (PAYX), and General Mills (GIS) on Wednesday, as well as Darden Restaurants (DRI) and Costco (COST) on Thursday. These earnings reports will provide additional insights into the state of consumer demand, the housing market, and corporate spending. Next week, attention will also be focused on the summit between Donald Trump and Xi Jinping, where trade, tariffs, and the supply of critical goods remain key issues for the markets.

For U.S. stocks, an additional technical factor today will be the quarterly expiration of options and futures, which could lead to higher trading volumes and intensify intraday volatility, especially toward the close.

S&P 500 futures are trading in positive territory. We assess the risk balance for the upcoming session as moderately positive, with high volatility. If the index closes up more than 0.3% (above 7,657), the week in which the Fed raised rates will end with a symbolic gain. Falling oil prices and 10-year Treasury yields are supporting risk appetite and allowing the market to focus on the AI theme; however, a major quarterly expiration could limit further movement in the indices and increase volatility.

— Xenon Pharmaceuticals (XENE) shares are down about 25% in premarket trading following a voluntary suspension of new patient enrollment in trials of drugs for major depressive and bipolar disorders due to neuropsychiatric side effects. The company plans to adjust the dosing regimen, and results from the X-NOVA2 trial are now expected in the first quarter of 2027. Meanwhile, the pause has not affected its epilepsy treatment programs. At the same time, Xenon has submitted a New Drug Application (NDA) to the FDA for azetukalner to treat focal seizures. The key factors affecting the stock in the near term remain the safety assessment of the drug and the timeline for resuming psychiatric trials.

— Nucor (NUE) is down about 3.8%: its Q3 EPS forecast is $5.55–5.65, compared with the consensus estimate of $5.99. Nevertheless, the figure is significantly higher than the $2.63 reported a year earlier: growth is expected in the steelmaking segment due to higher prices and volumes, but the raw materials business and corporate expenses will put pressure on earnings.

— Steel Dynamics (STLD) is down about 4.2% after reporting an EPS forecast of $5.34–5.38, compared with the consensus estimate of $5.60. The guidance implies growth from $3.69 in the prior quarter, driven by widening metal margins and record shipments; however, the forecast fell short of market expectations. The steel construction backlog is nearly 50% higher than last year’s level and extends into Q1 2027.

— Cooper Companies (COO) is up about 1.3% following a WSJ report that Jana Partners is putting pressure on the company. The activist is demanding the replacement of CEO Albert White and the chairman of the board of directors, as well as a review of strategic alternatives, including the possible sale of key assets. Jana may also launch a proxy fight if its demands are not met.

Trading on September 17 on U.S. stock markets ended with solid gains: for the S&P 500 and the Nasdaq, the session marked their best performance since August 4, breaking a streak of three consecutive declines. The S&P 500 gained 1.14%, the Nasdaq 100 rose 1.73%, the Dow Jones increased 0.61%, and the Russell 2000 rose 0.55%. The main driver was a rally in the AI sector, led by semiconductor and memory chip manufacturers; buyers were also supported by a 6–8 basis point decline in Treasury yields. Major technology companies also showed strong performance. The IT sector (XLK: +2.25%) led the gains by a wide margin, followed by consumer cyclicals (XLY: +1.1%). The laggards were telecommunications (XLC: −0.58%) amid pressure in the media and entertainment segment, and financials (XLF: −0.09%), where payment services and certain insurers underperformed the market.

This morning’s macroeconomic data release pointed to a resilient labor market and ongoing price pressures. The Philadelphia Fed’s Manufacturing Activity Index stood at 37.8 points in September, compared with the consensus estimate of 30.5, although it declined from 47.4 in August, while the input prices component rose after falling the previous month. Initial jobless claims fell to 196,000 against expectations of 208,000, while the number of continuing claims (1.73 million) hit its lowest level since the beginning of 2024. Construction statistics were weaker: new housing starts in August totaled 1.275 million against a consensus estimate of 1.31 million; building permits came in at 1.394 million versus an expected 1.41 million; and pending home sales rose by only 0.3% month-over-month. It is noteworthy that Treasuries were in demand across the entire yield curve, despite the strong data.

WTI crude oil fell 0.5%, closing significantly above its intraday lows. Signals from the Middle East remained mixed.

This article was AI-translated and verified by a human editor