Major indices are rebounding from yesterday’s dip, and the S&P 500 and Nasdaq are reclaiming their 50-day moving averages.

Notably, the market is getting a boost from a lower move in yields and oil today. The ten year yield is retreating back below 5%.

Nine sectors are moving higher today with Technology (XLK) in the lead. The sector’s gain is being driven by strength in semiconductor names, led by continued strength in Intel (INTC) on reports of a potential deal with SK Hynix (SKHY) for domestic production. Additionally, the semiconductor space is more broadly benefiting from rumors that Advanced Micro Devices (AMD) is planning to raise its chip prices by around 10%, adding to the supply crunch theme from Nebius’s (NBIS) price increase covered in this morning’s report. Meanwhile, Consumer Discretionary (XLY) is the runner up and sees notable strength in Amazon (AMZN), following their deal with Generac (GNRC), and Tesla (TSLA), following the news that it will operate public Megacharging sites at three new Forum Mobility electric-truck depots in California, part of an expansion adding 30 megawatts of heavy-duty charging capacity.

On the other hand, the risk-off sector of Consumer Staples (XLP) is lagging, followed by Energy (XLE).

Nvidia (NVDA) CEO Jensen Huang is also helping spur chips by indicating the company expects to sell two times as many chips next year.

In more chip related news, GlobalFoundries (GFS) and Marvell Technology (MRVL) expanded their multi-year agreement to increase silicon germanium (SiGe) chip capacity at GlobalFoundries' Burlington, Vermont facility to support Marvell's pluggable, near packaged, and co-packaged optics for high-speed AI data center connections.

Interestingly, the Securities and Exchange Commission (SEC) approved a temporary, conditional Innovation Exemption that allows limited trading of tokenized U.S. stocks on certain onchain venues, subject to symbol limits and volume caps, so regulators can study how these venues work before considering longer-term rules.

Economic Data

The Philadelphia Fed Manufacturing Index fell from 47.4 to 37.8 in September but beat the forecasted decline to 30.5. Meanwhile, the future activity index fell to 52.9 from 73.6, with around 57.9% of respondents expecting an increase in activity over the next 6 months. In terms of the underlying components, new orders fell by 0.9 points, shipments were unchanged, and employment dropped by 16.1 points, while prices paid rose by 7.7 points and prices received jumped by 13.6 points.

Building permits for August fell 2.7% M/M to a seasonally adjusted annual rate of 1.394M, below expectations of 1.41M and following the 4.3% gain in July. Permits for single family homes fell 1.8% M/M, while permits for buildings with 5 or more units fell 3.1% M/M.

Similarly, housing starts fell 2.6% M/M in August to a seasonally adjusted annualized rate of 1.275M, below the forecasted 1.31M, but decelerating from the 9% decline in July. Multi-family homes plunged 22.5% M/M, partially offset by a 7.6% M/M rise in single family starts.

Pending home sales for August rose 0.3% M/M and rebounded from the 2.6% decline in July, but fell short of the estimated 2% increase.

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