Major indices have traded lower over the session as bond yields and oil tick higher on further skirmishes in Yemen and the Strait of Hormuz, with investors also awaiting tomorrow afternoon's FOMC rate decision.

Most magnificent seven names are moving lower and while there is a lot of red on the heatmap, there are some pockets of green in semiconductors, software, defense, Materials (XLB), medical instruments, and diagnostic names.

As a result of the strength in oil, Energy (XLE) is the only sector in the green. The Materials sector is holding near its baseline on strength in steel names, as well as the chemical and fertilizer names benefiting from reduced Middle Eastern supply. Meanwhile the more interest rate and oil sensitive sectors of Consumer Discretionary (XLY) and Utilities (XLU) are lagging.

Waiting on Warsh

Bond yields are continuing to move higher, with the ten year treasury yield testing 5% as rate hike expectations increase and oil moves higher on Middle Eastern tensions.

Kevin Hassett gave comments on the upcoming FOMC meeting saying, “President Trump and I will respect whatever decision Fed Chair Kevin Warsh makes tomorrow.”

This morning, Secretary Bessent also spoke, indicating the target for the deficit is 3% of GDP as nominal economic growth would then outpace borrowing and allow for paying down the debt.

AI Development Continues

Salesforce (CRM) is making news today after unveiling Koa with Nvidia (NVDA), its first customer relationship management reasoning model for Agentforce, built on Nvidia's Nemotron 3 Super and trained entirely on synthetic enterprise data.

Additionally, Anthropic also launched further integrations with Salesforce for their Claude AI models.

Nvidia is also making news after confirming GTC Washington, D.C., set for November 30 to December 3, 2026, with a focus on AI's role in American economic growth and scientific discovery.

Meta (META) is furthering the custom silicon trend, disclosing that it has already received its first 12 Arke chips from TSMC (TSM) with testing within 2% to 3% of simulations, committing to more than a gigawatt of custom chip capacity, and canceling its planned Olympus training chip to concentrate the roadmap on lower-cost inference.

Additionally, neocloud activity continues to build, with Crusoe signing a multiyear AI cloud agreement with Perplexity that puts Nvidia GPUs, including GB300 systems, behind Perplexity's model training and inference, a step up in scale for Perplexity.

Economic Data

On the economic front, the New York Fed Manufacturing Index fell 13 points to 7.6 in September, missing estimates of 14.75. The report saw the current new orders index fall sharply but hold above zero, while shipments turned negative and prices paid accelerated, with the six-month outlook moving in the same direction.

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