US EQUITY OPEN: Stocks pare hawkish Fed reaction while yields and crude prices drop

US EQUITY OPEN: Stocks have opened in the green, with markets largely reversing the hawkish post-FOMC reaction as yields move lower across the curve. Some have attributed the move to bolstered Fed credibility after Chair Warsh delivered a rate hike and reaffirmed the Fed's commitment to price stability. Improved geopolitical optimism is also supporting sentiment. Saudi Arabia has reportedly asked Oman to seek a two-week truce with the Houthis, while China has been pressing Iran to help rein in the group. Pakistan has also urged Iran to convince the Houthis not to attack Saudi Arabian energy facilities, with the developments weighing on crude prices.

Sectors are predominantly firmer, with Technology, Consumer Discretionary and Industrials rallying, while Financials, Consumer Staples and Energy lag.

In FX, the Antipodeans and Yen are outperforming, while GBP and the Dollar lag. Sterling was pressured after the BoE rate decision, which left rates unchanged as expected in a 6-3 vote, while also announcing that APF gilt sales will be paused until April 2027. The MPC also voted 9-0 to unwind QT at an average annual pace of GBP 46bln through 2034. The Dollar is weaker as it unwinds its post-FOMC strength alongside the decline in US yields across the curve. Gold prices are higher, albeit currently off their best levels.

Elsewhere, US data was mixed. Jobless Claims were strong, maintaining the recent trend of low claims. However, Housing Starts and Building Permits missed expectations, while the Philly Fed index declined M/M but still beat the consensus.

Attention ahead turns to Pending Home Sales shortly, while bond traders will be watching the Treasury's 7-10yr buyback (not one of the recently expanded long-end operations), with the BoJ also due overnight.

STOCK SPECIFICS:

• Nike (NKE): Appointed Alexandre Arnault, Deputy CEO of LVMH’s Moët Hennessy, to its board
• Arm Holdings (ARM): CEO said demand for the company's technology has never been stronger and is more confident in its prospects than at the July earnings call
• Generac Holdings (GNRC): Struck a deal with Amazon to supply backup power generators for its data centres
• GFL Environmental (GFL): KKR, Energy Capital Partners and Blackstone are bidding jointly for the company, while Brookfield Asset Management and IFM Investors have formed a rival consortium
• Lennar (LEN): Quarterly metrics disappointed and lowered FY delivery outlook amid deteriorating housing conditions and persistently high mortgage rates
• Qiagen (QGEN): Attracting interest from multiple private equity firms, with expectations that shareholders may demand at least USD 50/shr
• Lucid Group (LCID): Partners with Bolt to deploy at least 25k Level 4 autonomous vehicles across Europe
• CoreWeave (CRWV): Announces proposed USD 3.0bln convertible senior notes offering
• Nvidia (NVDA) CEO Huang says AI safety is paramount; Nvidia (NVDA) to sell twice as many chips next year as this year.
• Nebius (NBIS) confirms it will hike prices for on-demand CPU and GPU Services; Will raise GPU rates for Nvidia (NVDA) H100, H200, B200 and B300