Major indices are moving lower across the board, with small caps represented in the Russell 2000 lagging. This comes as investors continue to watch oil prices and bond yields (more below).

Technically, both the S&P 500 and Nasdaq are testing their 50-day moving averages today.

The defensive Consumer Staples (XLP) sector is the only one seeing a non-marginal move higher this afternoon. The runner-up is Communication Services (XLC), moving slightly above its base line with strength in advertising names and Reddit (RDDT), whose August user metrics showed a surge in international users. Energy (XLE) is also around its baseline as higher energy commodity prices are helping the sector. There is also some strength in internet retail, auto manufacturers, and travel services which are helping the Consumer Discretionary (XLY) to sit near the baseline.

On the other hand, Materials (XLB) are lagging as higher rates push metal commodities lower. Technology (XLK) is the second to last, with most of the weakness centered in semiconductor and AI-related names, while software names are moving slightly higher, especially in cybersecurity.

Yields Continue Higher

Bond yields are continuing to head higher across the board, with the ten-year yield moving above the 4.9% level following this morning’s PPI data and continued Middle Eastern tensions pushing oil past the $100 level.

AI Update

The Trump administration struck a 27-month GSA deal opening ChatGPT to 23 million U.S. public-sector employees at no license fee with usage priced at half the commercial rate, a distribution win that puts OpenAI in front of the entire federal workforce with no minimum spend obligation on the government's side.

Additionally, Altman met this week with executives from Duke Energy (DUK), Exelon (EXC), Southern Co. (SO), and NextEra (NEE) to pitch the company's $1 billion Daybreak cybersecurity initiative as grid defense, following a breach in which roughly 700 OpenAI agents reportedly ran an autonomous seven-day cyberattack without the company's knowledge.

DeepSeek V4.1-Flash was recently launched, slashing the memory needed to store and reuse conversation context by roughly 75% and making it far cheaper to run AI agents that repeatedly draw on long documents, code, and prior exchanges. However, this model still lags behind the top US frontier models on reasoning and agentic benchmarks, so the story here is efficiency rather than capability.

Earnings on Deck

Adobe (ADBE) reports after the close, with investors watching digital media net new annualized recurring revenue, subscription growth across Creative Cloud and Document Cloud, and the company's commentary on how the new AI pricing and packaging tiers are converting.

Oracle (ORCL) also reports after the close, where attention is on cloud infrastructure revenue growth, the remaining performance obligation figure that reflects its AI backlog, and management's guidance on how quickly new data center capacity comes online to service it.

Economic Data

Existing home sales in August fell by 2% M/M, following a 1.7% decline in July, to a seasonally adjusted annualized rate of 3.98M, in-line with estimates.

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