Market Review: September 18, 2026

Closing Recap

Friday, September 18, 2026

U.S. stocks finished mixed on Friday following a busy week of market catalysts that included central bank action, economic data, and volatility in financials and the tech space on AI fears. Semiconductor chips and AI infrastructure stocks declined Monday on calls for slowing down frontier AI models by top CEO’s of AI labs (Anthropic/OpenAI). The market retreated Wednesday after the Federal Reserve raised rates by 25 bps (as expected) and signaled at least one more hike soon. As of early Friday morning, market pricing shows 90% odds of a hike by the Dec. 9 policy update, with a 55% chance it will happen Oct. 28. Stocks rebounded Thursday in a day two Fed reaction as both the S&P 500 and Nasdaq regained their 50-day moving average lines after one day below that. Then Friday, US stocks petered out behind another bounce in global Treasury yields. The Nasdaq edged higher for the week while the S&P 500 is slightly lower. The Dow Jones and small-cap Russell fell solidly for the week, losing sight of their 50-day lines. Bitcoin and crypto stocks fell mid-week as the Senate failed to advance the Clarity Act, but rebounded as regulators took their own action. Apple began selling the iPhone 18 handsets, but not the foldable iPhone Duo yet. While stock markets are holding not far off all-time highs digesting higher yields, oil, diesel prices, several sectors have been in a downtrend of late as Transports, small caps, Industrials, Consumer Discretionary are all now down 5 straight weeks (XLY down 6 straight, while XLP, XLI, XLRE down 5 straight weeks and XLB 4 straight weeks). For the week, the S&P 500 fell -0.1%, the Dow fell -1.7% and the Nasdaq climbed +0.7%.

The trading week has been dominated by central bank actions. 1) On Wednesday, the Federal Reserve raised interest rates by 25 bps and flagged more hikes in the coming months. Kevin Warsh came to the Fed with a roadmap to lower borrowing costs. Less than four months later he has pulled the trigger on the Fed’s first interest rate hike in over three years. 2) Yesterday, the Bank of England held interest rates at 3.75%, exactly as expected. But its decisions relating to its balance sheet and quantitative tightening were a lot more interesting. 3) Finally, overnight, the Bank of Japan raised its policy rate 25 bps to 1.25%, matching all economists surveyed as the move was the fastest pace of tightening in over 30 years. But the hawkish message failed to rally the yen. Instead, the currency weakened as investors seized on dissent from two policymakers who argued the BOJ should remain patient in raising borrowing costs.

Interesting data points: 1) US equity funds recorded outflows for a fourth consecutive week in the week to September 18, as rising crude oil prices heightened inflation concerns and expectations of a Federal Reserve rate hike added to investor caution ahead of its policy decision. US equity funds recorded net redemptions of $31.44 billion during the week, largely matching the $32 billion withdrawn a week earlier, LSEG Lipper data showed. 2) However, @Bluekurtic noted on X, “Active managers went from levered to their teeth to just gritting them. NAAIM Exposure Index fell from 100+ to below 75. This is bullish for the S&P 500. Sidelined cash from managers fed up with the chop could fuel the next leg higher.”

• The Japanese yen weakened this morning despite the BOJ raising rates by 25bps as the hawkish message failed to rally the Yen. Instead, the currency weakened more than 1.2% as investors focused on dissent from two policymakers who argued the BOJ should remain patient in raising borrowing costs. Still, later in the day, the yen strengthened amid what traders said was likely intervention falling back below the 157 level, off highs around 158.
• Treasury yields rise as the Benchmark 10-yr yield rose 6 bps today to settle at 4.995%, rising 2.1bps for the week and is up 27.4bps this month alone; the 2-yr yield rises over 5bps today to 4.741%, up nearly 10-bps on the week and up 57bps in a little over a month settling at a new 52-week high; the 30-yr yield was up 3 bps today, but down -2.7bps on week to settle at 5.327%. The Fed raised rates Wednesday and Chairman Kevin Warsh’s remarks left markets under the impression that more increases could come. Since then, the yield curve has been flattening. The spread between the two-year and the 10-year yields reached its narrowest level since March 2025 on Thursday, while the 10-yr held around the 5% level most of today.

• Food & Beverage sector: TSN was upgraded to Overweight from Neutral at JPMorgan saying emerging headwinds in chicken from rising feed costs are well understood and could be partially offset by industry production cuts. Meanwhile, beef earnings could finally be on the upswing.
• Restaurant sector: CAVA announced that its board of directors has approved a share repurchase program authorizing the buyback of up to $100M of its outstanding common stock.

• Leisure sector: STUB was upgraded to Buy at Citigroup saying recent FY26 Adj. EBITDA guidance implies greater Adj. EBITDA in 2H26 versus 1H26; and says based on robust app downloads in Q326, believes StubHub will report Q326 Adj. EBITDA above expectations.

• Solar and Utility sector: utility sector (XLU) was weaker as Treasury yields rebounded after one day slide on Thursday (higher yields weigh on dividend paying sectors likes Utes); ARRY was downgraded to Neutral from Buy at UBS and cut tgt to $5 from $10 as the transition of Preferred dividends from payment-in-kind (PIK) to cash pay changes the outlook for FCF deployment.

• COO shares active after activist JANA Partners sent a letter to its Board, pushing for a CEO change, appointment of a new board chair and evaluation of asset sales. This comes after shares fell -15% earlier this month after the company reported a disappointing F3Q + guidance update and disclosed its decision to retain its CSI business post strategic review.
• XENE shares slide as announces azetukalner NDA submission to FDA for focal seizures and provides update on psychiatry clinical program; initiates temporary pause of enrollment in ongoing psychiatry studies; said enrollment in X-nova2 study in MDD completed; topline data expected Q1 2027.
• Evercore initiated coverage on four SMID biotech stocks as see strong potential ahead, with promising catalysts on the horizon leading into 2027. DBVT, PRLD, TRAX and QNCX all initiated at Buy ratings. For DBVT, primary focus on Viaskin’s potential comeback; for TRAX, expectations surrounding the gluten challenge data are positive; for QNCX, valuation is anchored by DPI rapamycin, particularly in PH-ILD, with crucial data expected in early 2028; and for PRLD, a standout in the under-$1B biotech sector, developments in the KAT6 space position this company advantageously.

• Industrial sector: in the waste sector, WCN was upgraded to Buy from Neutral at UBS and raised tgt to $200 as believes the recent underperformance has created an attractive entry point, as the market remains focused on Chiquita, a discounted valuation, and a Superior growth profile vs key peers.
• Shipping sector: The Baltic Exchange’s dry Bulk Freight index rises on stronger Capesize vessel rates, but posts weekly decline. The main Baltic index fell rose 34 points, or 1%, to 3,370 points. However, the index was down nearly 4% for the week so far. The Capesize index rose 112 points, or 2%, to 5,768 points. It was on track for a weekly fall of 5%. The panamax index fell 31 points, or 1.4%, to 2,251 points, and was headed for a weekly drop of 6.5%.

• Metals & Mining: steel producers were pressured early after both NUE, STLD issued quarterly guidance below views. guidance: NUE said it expects Q3 earnings of $5.55-$5.65 per share, below the $5.99 consensus but above $5.04 in Q2, with higher Steel selling prices and stable volumes expected to benefit its Steel mills and Steel products segments, partly offset by higher costs and weaker raw Materials results. STLD guided Q3 EPS $5.34-$5.38, below the $5.60 consensus but above $3.69 in Q2, as significantly higher Steel profitability from metal margin expansion and record shipments is expected to be partly offset by weaker metals recycling results due to lower spreads and shipments.
• Aluminum sector: Wells Fargo with price changes in the sector as they upgraded KALU to Equal Weight from Underweight after they trimmed aluminum forecasts but remains relatively constructive on the sector citing valuation with the shares down over 20% quarter-to-date. The firm cut its tgt on AA to $60 from $71 and CENX to $79 from $83 and CSTM to $38 from $39.

• Neocloud sector: SHAZ Initiated Outperform $95.00 PT, IREN Outperform $99.00 PT, CHRN Outperform $32.00 PT and BRUN Outperform $36.00 PT at Northland; said IREN’s path to SW differentiated AIaaS is the clearest with the very attractive Mirantis acquisition, CHRN taking a Bold and capital efficient approach to internally build the hybrid Cloud of AIaaS, BRUN execution exceeding Spac combination expectations; see potential to build a software enabled differentiated layer. Market pricing SHAZ as worse off than the advertised bare metal player, while optionality remains to develop a differentiated SW layer, in Northland’s view.
• Software sector: cyber security stocks slide after a good run the last few weeks; note today, a hacking story earlier (Independent Security researchers used Anthropic’s Claude to hack into OpenAI, via an employee’s ChatGPT account, according to The Wall Street Journal.)- shares of CRWD, ZS, PANW, FTNT among those under pressure.
• Hardware & Components: Evercore noted in research today that the latest consumer survey indicates a robust iPhone upgrade Cycle for AAPL, significantly driven by Pro Max demand and enhanced pricing strategies. Key insights suggest that the current iPhone refresh Cycle could exceed expectations, with substantial potential for average selling price (ASP) increases, propelled by premium configurations and memory options. iPhone Demand Strength: A noteworthy 61% of respondents plan to purchase an iPhone, marking an increase from 59% last year and reflecting robust demand. Particularly, the 18 Pro Max model stands out, with 32% of customers indicating intention to buy, up from 29% last year.
• AdTech sector: DSP shares jumped after saying it and a stockholder decided to withdraw 8.5 mln share offering due to current market conditions, per an SEC filing; more volatility in other AdTech names MGNI, PUBM, TTD a day after an unsealed court order in the Google AdTech monopoly case comes out with remedies more heavily in favor of Independent SSPs.
• IT Services & Consulting: ACN was downgraded to Neutral at Guggenheim noting shares have rebounded +52% since June troughs (vs. SPX +2% over the same period) with no corresponding improvement in demand surfaced in GUGG’s channel discussions.

• INTA announced a partnership with OpenAI to make Celeste, its expert AI coworker, available as a plug-in for ChatGPT Enterprise. The integration brings law firms’ proprietary client context, methods, matters, and institutional knowledge into ChatGPT Enterprise.
• MTSI upgraded to Outperform from Market Perform at BMO Capital with an unchanged price target of $335 citing valuation for the upgrade with the stock down 36% from the May peak.
• TXN raises quarterly dividend 7% to $1.52 from $1.42 per share.