Newsquawk US Market Wrap - Stocks ends the week on the front foot as risk events await

• SNAPSHOT: Equities up, Treasuries flatten, Crude up, Dollar up, Gold up.
• REAR VIEW: UoM Consumer Sentiment nears all time lows; US allows immediate imports of Russian diesel; IRGC warns vessels violating restrictions will be pursued and punished beyond the Strait of Hormuz; Houthi forces have reportedly planted large quantities of mines in the Bab al-Mandab area; China is set to resume October refined fuel exports after a brief halt; AAPL has reportedly told suppliers to cut production of components for its iPhone 18/Pro Max as rising prices dampens consumer demand; Poor Canada jobs report.
• COMING UP: 12th October 2026: Note: US cash bond market will be shut on account of Columbus Day; CME Treasury Futures and NYSE and Nasdaq remain open. Holiday: US Columbus Day (Newsquawk desk remains open as usual); Canadian Thanksgiving. Data: Indian Inflation (Sep). Speakers: BoE’s Breeden, Mann; Fed’s Hammack. Earnings: LVMH.
• WEEK IN FOCUS: US CPI, US Retail Sales, Start of Q3 Earnings, China CPI, UK jobs, RBA Minutes and Aussie jobs. Click here for the full report.
• WEEKLY US EARNINGS ESTIMATES: Earnings season begins with big banks the highlights. Click here for the full report.

Stocks closed higher on Friday, with tech names putting Thursday's FT piece on Open AI in the rearview. Real Estate, Consumer Discretionary, and Healthcare outperformed, meanwhile, Communications underperformed following SpaceX competition concerns for Verizon (VZ -8.6%) and T-Mobile (TMUS -13.3%).

Crude prices settled in the green, however shortly after saw pressure on US President Trump announcing successful talks with Russian President Putin which led to US Treasury allowing Russia to sell diesel to the US, albeit quantities for the time being appear insignificant in comparison to US/global diesel consumption. Re. geopolitics, Iran's IRGC warned vessels violating restrictions will be pursued and punished beyond the Strait of Hormuz while the Houhtis have reportedly placed mines in the Bab al-Mandab area.

In FX, DXY was a touch firmer, thanks to the rise in short-term yields; AUD outperformed whilst the CAD was hit following a disappointing jobs report that saw negative employment growth, leading to reduced October rate hike bets for the BoC. On the US data footing, prelim UoM for October largely underwhelmed, although expectations topped forecasts.

Despite the flattening of the Treasury curve on the short-end and belly (long flat), precious gained on the risk-on mood, leaving spot gold +USD 51/oz on the week

MICHIGAN: University of Michigan prelim figures for October were mixed but largely disappointing. Sentiment fell to 46.3 from 48.1, and beneath the forecasted 47.5, while conditions tumbled to 44.7 from 50.9, also shy of the expected 50.5. Expectations unexpectedly rose to 47.3 from 46.3, with Wall St. consensus expecting a decline to 45.9. 1yr inflation expectations ticked up to 4.7% (prev. 4.6%), albeit not as hot as the expected 4.8%, while the 5yr lifted to 3.5% from 3.4%, as expected. Overall, sentiment dropped for the third consecutive month, with Oxford Economics writing that elevated gas prices and higher borrowing costs are making consumers more worried about current economic conditions.

T-NOTE FUTURES SETTLED 4 TICKS LOWER AT 104-19

Treasury yields bear flatten as oil prices climb on Middle East tensions, with attention turning to CPI and Fed Chair Warsh next week. At settlement, 2-year +2.9bps at 4.791%, 3-year +3.1bps at 4.923%, 5-year +2.9bps at 5.021%, 7-year +1.9bps at 5.132%, 10-year +0.7bps at 5.242%, 20-year -0.3bps at 5.652%, 30-year -0.6bps at 5.601%.

THE DAY: The Treasury curve flattened on Friday, with the front end sold. There was little economic data or Fed commentary to digest, although oil prices gradually moved higher throughout the session, ultimately settling in positive territory. Firmer crude prices appeared to weigh on the front end amid renewed inflation concerns, contributing to the bear flattening.

The gains in oil followed escalatory commentary and actions from the IRGC, which has been expanding strikes beyond the Strait of Hormuz. The IRGC warned that vessels violating restrictions would be pursued and punished beyond the Strait, while sources reported that the Houthis had planted mines in the Bab al-Mandab area, adding to concerns over energy supply disruptions in the Middle East.

On the data front, the preliminary September UoM consumer sentiment survey disappointed, with the headline index falling to 46.3 from 48.1, below the expected 47.8. Both current conditions and forward-looking expectations declined, although the latter exceeded forecasts. Meanwhile, both one- and five-year inflation expectations increased, adding to concerns over the inflation outlook.

Attention now turns to next week's US inflation reports, which will help shape expectations for the Fed's next policy move. The probability of an October rate hike has fallen considerably following softer-than-expected August core PCE, weak September NFP data and recent commentary from Fed officials, including Williams, Jefferson, Bowman and Waller, suggesting there is little urgency to deliver consecutive rate hikes following September's move. Fed Chair Warsh is also scheduled to speak at the IMF in Bangkok the day after the US CPI report, with participants looking for his assessment of the recent data and implications for the policy outlook. However, given Warsh's previously expressed reluctance towards explicit forward guidance, he may avoid signalling a definitive policy path.

Supply

Bills

• US to sell USD 82bln 26-week bills, to sell USD 95bln 13-week bills, and to sell USD 95bln 6-week bills on October 13th; all to settle on October 15th

STIRS / OPERATIONS

• Fed Hike Pricing via CME FedWatch: Oct 4.9bps (prev. 4.3bps), Dec 25.1bps (prev. 24.1bps)
• EFFR at 3.88% (prev. 3.88%), volumes at USD 117bln (prev. USD 108bln) on October 8th
• SOFR at 3.87% (prev. 3.88%), volumes at USD 2.963tln (prev. USD 2.968tln) on October 8th
• NY Fed RRP op demand at 0.30 (prev. 0.34bln) across 1 counterparties (prev. 2) on October 9th

WTI (X6) SETTLED USD 0.36 HIGHER AT 91.85/BBL; BRENT (Z6) SETTLED USD 0.44 HIGHER AT 104.72/BBL

The crude complex ended the final trading session of the week firmer, as participants await any further weekend updates. As a reminder, and one of the key takeaways from this week, was that Trump said on Thursday they are having productive discussions with Iran, and will not be attacking Iran at any time before the midterms. Nonetheless, and back to Friday, benchmarks saw gains amid two separate reports: 1) IRGC warned vessels violating restrictions will be pursued and punished beyond the Strait of Hormuz; 2) Military sources stated Houthi forces have planted large quantities of mines in the Bab al-Mandab area. On the day, WTI and Brent hit lows of USD 90.01/bbl and USD 102.33/bbl, respectively, in the European morning and continued to be weighed on by the aforementioned Trump remarks, but later pared on a deluge of Middle East updates. In addition, IRGC claimed to have struck the LPG carrier NV Sunshine after it attempted to transit an unauthorised route south of the Strait of Hormuz, and UKMTO reported another vessel struck by a projectile near the UAE. On the supply footing, Gulf of Mexico producers had shut around 63% of oil production ahead of Hurricane Isaias, removing nearly 1.3mln BPD. For the record, the weekly Baker Hughes rig count saw oil up 6 at 462, natgas down 1 at 132, leaving the total up 5 at 603.

CLOSES: SPX +0.58% at 7,810, NDX +0.51% at 30,883, DJI +0.83% at 51,655, RUT +0.46% at 2,807.

SECTORS: Real Estate +1.88%, Consumer Discretionary +1.69%, Health +1.58%, Financials +0.90%, Utilities +0.81%, Materials +0.64%, Industrials +0.49%, Technology +0.36%, Consumer Staples +0.11%, Energy -0.17%, Communication Services -0.40%.

EUROPEAN CLOSES: Euro Stoxx 50 +0.81% at 6,176, Dax 40 +1.19% at 25,102, FTSE 100 +1.06% at 10,552, CAC 40 +0.95% at 7,803, FTSE MIB +0.91% at 49,746, IBEX 35 +0.55% at 19,033, PSI -0.86% at 9,268, SMI +1.10% at 13,787, AEX +0.87% at 1,131

STOCK SPECIFICS

• Apple (AAPL): Cut October component orders for its iPhone 18 Pro and Pro Max by 15-20% amid weaker-than-expected demand.
• SpaceX (SPCX): Agreed to acquire Grain Management's 800 MHz spectrum portfolio for USD 8bln in cash; Verizon (VZ) and T-Mobile (TMUS) were weighed.
• Delta Air Lines (DAL): Profit missed, cut FY EPS guidance and provided weak next-quarter outlook.
• Humana (HUM) / Alignment Healthcare (ALHC): Following CMS headlines; Alignment Healthcare said one of its 2027. Medicare Advantage plans received a 3.5-star rating, while Humana announced improved Star Ratings for 2027.
• Lumentum Holdings (LITE): CEO said Lumentum's optical components are sold out through 2029.
• Hunterbrooks said Meta's (META) Muse growth slows as downloads fall; Hunterbrook holds a META short position.
• White House reportedly to let Trump beef import plan expire in November, reports Politico.
• Google (GOOGL) is preparing to publicly roll out its new Gemini 4 model, internally known as Argon, reports Business Insider citing sources; Most recently, employees have been trying a new version of Gemini 4 internally named Carbon

The Dollar Index was slightly firmer, albeit mixed against G10 FX peers, amid a lack of tier 1 US data this week, and no Fed speak on Friday. Next week, the risk events ramp up with US inflation data, retail sales, the beginning of earnings season, and Chair Warsh even giving remarks with the IMF next Thursday. Back to today, prelim UoM for October largely underwhelmed, while Middle Eastern updates were aplenty, but the weeks key highlight remains Trump saying he will not attack Iran before the midterms.

AUD, CHF, NZD, and GBP all saw gains to differing degrees, while EUR, JPY, and CAD saw losses with the latter the clear laggard. The Loonie was weighed on by a dismal Canadian jobs report, as the economy unexpectedly lost 68.3k jobs in September, against the expected 7k and prior months -41.7k. The unemployment rate ticked higher to 6.5% from 6.4%, although it was anticipated. Following the dataset, BoC pricing has trimmed from 10bps of implied tightening in October to around 6.5bps.

For the Euro, focus remains on two fronts: a) politics and b) EU-China trade relations. On the former, no material updates on the French fiscal situation. On the trade front, EU Trade Commissioner Sefcovic said that it had reached a shared understanding to improve access to the Chinese markets. He noted that the agreement of understanding with China on hybrid vehicles could cut shipments by half.