Stocks slip on the first day of the month, after a modestly higher open, and are attempting to rebound. The initial decline came after manufacturing activity highlighted price pressures growing in September (more below).

Energy (XLE) is the best performing sector as crude oil moves higher. Technology (XLK) is still seeing some light at the end of the tunnel despite Micron (MU) moving marginally lower. Materials (XLB) and Health Care (XLV) are at the bottom of the board.

Welcome to October

Based on seasonality, the S&P 500 dips slightly through September before turning higher into the last three months of the year with historical returns of 1%, 2.1%, and 2.1%, respectively.

Good News, Bad News

The ISM US Manufacturing Index pointed to continued robust economic activity and greater cost pressure. The index posted its ninth straight month of expansion at 54.5, missing consensus of 55.0.

Production is looking healthy while new orders rose; the big concern continues to be prices, which rose to their highest level since May.

Gemini 4 Argon

Alphabet (GOOG/L) gave up its initial opening gain as the enthusiasm surrounding the unveiling of Gemini 4 Argon faded. The new AI model from Google lands as Anthropic and OpenAI continue to launch new models even as they talk about the need for pacing.

According to Google, Gemini 4 Argon is ahead of or on par with OpenAI’s and Anthropic’s premier models and also excels in cybersecurity. 

AI Pricing Power

Amazon (AMZN) AWS announced it is raising its prices for reserved GPUs by ~15% across NVDA B300, B200, and H100 capacity starting next week. This is another sign of ongoing supply and demand pressures from strong AI needs.

Jobs Report Preview

All eyes on tomorrow’s jobs report and its implications on indexes, the dollar, and yields. Economists don’t expect the report to be a game changer for October rate-hike pricing.