Mid-Morning Look: October 02, 2026

Mid-Morning Look

Friday, October 02, 2026

A strong start on the final trading day of the week as weaker jobs growth in September lowers expectations of rate hikes in the near-term by the Fed while oil prices slide after reports EU countries discussed a French proposal to release diesel stock. Stocks are looking to end the week on a good note as the Nasdaq 100 (QQQ) hit an all-time intraday high (NVDA also all-time highs) as the tech trade continues to bolster the broader stock market gains (XLK +39% YTD) with the AI trade remaining strong. Prediction markets are now pricing an 85% chance the Fed holds rates in October after payrolls rose just 29,000 vs. 84,000 expected. Unemployment climbed to 4.2%, triggering a sharp dovish repricing of the Fed outlook. Policymakers have signaled they will likely deliver another rate hike by year’s end if the Iran war and other shocks that have pushed up inflation persist, as long as the labor market holds up…but given today’s data, that outlook has changed slightly. In stock news, Nike (NKE) shares tumble on earnings and guidance, Tesla (TSLA) rallies on strong monthly delivery numbers, crypto stocks (MSTR, COIN) early bounce as Bitcoin tops $87K, interest rate sensitive stocks (mortgage, housing) get a bounce as the rate hike fears subside/lower mortgage rates, and semis rally outside of weak HDD stocks (more below). The 10-year yield dips back under 5.2% after hitting 24 year highs yesterday around 5.34%.

Weaker monthly jobs data as September Nonfarm payrolls rose +29,000, well below consensus +90,000 and down from August +133,000 (prior +162,000), and July -10,000 (prior +21,000), while the September private sector jobs +46,000m, below consensus +85,000). The U.S. September unemployment rate rises to 4.2%, above prior and consensus of 4.1%. U.S. September labor force participation rate 61.8%. The Average hourly earnings rose +3.0% y/y, lowest since May 2021 and below prior/consensus of +3.1%

Oil prices lower also helping after Reuters reported overnight that European Union countries discussed a French proposal on Friday to release diesel stocks in response to US pressure to help cool surging fuel prices. The proposal calls for European countries to release 50 million barrels of diesel and International Energy Agency members to release 50 million barrels of crude oil, the sources said. The discussions underscore growing pressure on Europe as U.S. President Donald Trump considers a potential ban on US diesel exports to help lower domestic fuel prices ahead of November 3 midterm elections.

• Brokers & Exchanges: CBOE was upgraded to Neutral as Goldman Sachs as believes risks from new retail-oriented wrappers, durability of zero dated index options and extension of the SPX contract within S&P Global have all diminished, and the near-term volume backdrop remains supportive. CME reported its average daily volume reached new records for September, with 31.8M contracts, up 22% year-over-year, and Q3 with 29.4M contracts, up 16% year-over-year. Both September and Q3 volumes exceeded prior records set in 2024.
• Memory stocks mixed as HDD names WDC and STX fall after reports Toshiba will double AI data center HDD capacity within fiscal 2027, investing roughly JPY 60 billion (US$380 million) in its Philippine plant. Its share by storage capacity is just over 10%, with a medium-term target of 30%. The move highlights that data centers are actively choosing cheaper HDDs over SSDs to meet massive AI storage needs.

• BETR +11%; was upgraded to Overweight at Cantor noting the Garg Group announced that it had secured written consents representing over 51% of BETRs voting shares, positioning Mr. Garg to return to an operating role.
• MSTR +3%; amid strength in the crypto sector as Bitcoin jumps over 2.8% above $87,000; also Citigroup raised its ests and tgt on MSTR to $240 from $136 to incorporate their revised 12-month Bitcoin forecast – base case revised 39% higher to ~$113.4k.
• PL +6%; as GOOGL has partnered with Planet Labs to successfully launch its Project Suncatcher prototype satellite into orbit aboard a SPCX rocket. The moonshot initiative will test how well Google’s Tensor Processing Units handle the extreme radiation and thermal conditions of space.
• SYNA +13%; ON said it will acquire SYNA for cash rather than stock in a downsized deal, according to an amended agreement between the two companies. ON said it will pay $123 a share for Synaptics, giving the deal a value of around $5.7B
• TSLA +3%; delivered 486,532 vehicles in the July-September period, compared with analysts’ average estimate of 456,896 vehicles as sales in Europe recovered from last year’s slump, while Q3 total production 464,391 units, vs. consensus estimate 486,761 units.

• FICO -6%; along with weakness in EFX, TRU after Bloomberg reported the US Federal Housing Finance Agency (FHFA) is planning to ease mortgage credit-data requirements for Fannie Mae and Freddie. FHFA is moving toward a framework that would require lenders to use credit data from two bureaus instead of three for mortgages sold to Fannie Mae and Freddie Mac.
• IART -13%; cut its FY26 adjusted EPS view to $2.30-$2.40 from $2.40-$2.50 prior and lowered its FY26 revenue view to $1.634B-$1.654B from $1.654B-$1.695B saying Q3 results were impacted by the July flooding event at our Cincinnati facility.
• NKE -6%; as reported a Q1 EPS beat, but on weaker sales and better SG&A while management gave FY27 sales guidance (-HSD), which was below mkt expectations with EBIT declining more than sales and EPS guided below the $1.50 bar.
• WDC -9%; and STX fall after reports Toshiba will double AI data center HDD capacity within fiscal 2027, investing roughly JPY 60 billion (US$380 million) in its Philippine plant. Its share by storage capacity is just over 10%, with a medium-term target of 30%.