The S&P 500 Index ($SPX) (SPY) closed up by +0.51% on Friday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.93%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.42%. December E-mini S&P futures (ESZ26) rose +0.47%, and December E-mini Nasdaq futures (NQZ26) rose +0.39%.
Stock indexes settled higher on Friday amid a slide in crude oil prices. WTI crude oil tumbled more than -2% on Friday on hopes for diplomacy to end the US-Iran war that would reopen the Strait of Hormuz. Also, strength in chipmakers and AI stocks on Friday supported stocks amid optimism over AI and demand for AI infrastructure.
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Friday’s US economic news was better than expected and supportive for stocks after Aug nondefense ex-aircraft capital goods new orders, a proxy for capital spending, rose +1.6% m/m, stronger than expectations of +0.6% m/m. July was also revised upward to +0.6% m/m from the previously reported unchanged m/m. In addition, the University of Michigan US Sep consumer sentiment index was unexpectedly revised upward by +0.3 to 48.1, stronger than expectations of a downward revision to 47.5.
Gains in stock indexes were limited on Friday after the 10-year T-note yield climbed to a new 19-year high of 5.23% on fears the Fed will continue to raise interest rates. New York Fed President John Williams said Friday that the Fed needs to return inflation to target, and it can’t ignore supply shocks if they have a persistent effect on prices.
Nov WTI crude oil prices (CLX26) fell more than -2% on Friday after Iran proposed a 7-day plan to end the war and reopen the Strait of Hormuz. Under the conditions Iran has set for the agreement, all hostilities would end during the seven days, including in Lebanon; the US would release Iran’s frozen assets (estimated at $12 billion), waive sanctions on Iranian oil, and lift the naval blockade on Iran. Then, on the last day, the Strait of Hormuz would be reopened. Iran’s foreign minister, Abbas Araghchi, said that after the seven days, comprehensive negotiations over Iran’s nuclear program would immediately begin.
Markets are discounting a 64% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled higher on Friday. The Euro Stoxx 50 closed up +0.48%. China’s Shanghai Composite did not trade Friday, with markets in China closed for the Mid-Autumn Festival holiday. Japan’s Nikkei-225 Stock Average rose to a 2.5-week high and closed up +1.30%.
Interest Rates
December 10-year T-notes (ZNZ6) settled unchanged on Friday. The 10-year T-note yield fell -1.2 bp to 5.165%. Dec T-notes recovered from early losses on Friday and moved higher after WTI crude oil fell more than -2%, which eased inflation expectations and sparked some short covering.
T-notes initially moved lower on Friday, and the 10-year T-note yield rose to a new 19-year high of 5.225%. T-notes came under pressure on hawkish comments from New York Fed President John Williams, who stressed that the Fed needs to return inflation to target. T-notes were also undercut by better-than-expected US economic news, including Aug nondefense ex-aircraft capital goods new orders and the University of Michigan Sep US consumer sentiment index.
European government bond yields were mixed on Friday. The 10-year German bund yield rose to a 17-year high of 3.632% and finished up +0.2 bp to 3.601%. The 10-year UK gilt yield fell from a 1.5-week high of 5.408% and finished down -1.5 bp to 5.366%.
The German Oct GfK consumer confidence index fell -3.8 to a 5-month low of -30.6, weaker than expectations of -27.2.
Markets are discounting a 42% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI stocks rallied on Friday, supporting the overall market. The iShares Semiconductor ETF (SOXX) closed up more than +1%. Microchip Technology (MCHP) closed up more than +5% to lead gainers in the Nasdaq 100, and ON Semiconductor (ON) closed up more than +5%. Also, NXP Semiconductors NV (NXPI) and Qualcomm (QCOM) closed up more than +3%, and Analog Devices (ADI), Applied Materials (AMAT), Lam Research (LRCX), and Texas Instruments (TXN) closed up more than +2%. In addition, ARM Holdings Plc (ARM), SanDisk (SNDK), ASML Holding NV (ASML), Western Digital (WDC), Marvell Technology (MRVL), and Seagate Technology Holdings Plc (STX) closed up more than +1%.
Cybersecurity stocks were under pressure on Friday, led by a -10% decline in Zscaler (ZS) after announcing Ross Tackett as the new chief revenue officer, effective October 1. Also, Gen Digital (GEN) closed down more than -6% to lead losers in the S&P 500, and SentinelOne (S) closed down more than -6%. In addition, Okta (OKTA) closed down more than -5%, and Palo Alto Networks (PANW) closed down more than -3% to lead losers in the Nasdaq 100. Finally, Fortinet (FTNT), CrowdStrike Holdings (CRWD), and Cloudflare (NET) closed down more than -2%.
Atlas Energy Solutions (AESI) closed up more than +13% after announcing a purchase agreement with Wyoming Machinery Company for $340.5 million of Balance of Plant equipment for a power generation project.
People Inc. (PPLI) closed up more than +11% after the Wall Street Journal reported that MGM Resorts International is discussing making a bid for the company.
Humana (HUM) closed up more than +4% after Barclays upgraded the stock to overweight from equal weight with a price target of $515.
Akamai Technologies (AKAM) closed up more than +3% after agreeing to a seven-year $11.6 billion deal to provide computing power to Anthropic.
Twilio (TWLO) closed down more than -7% after HSBC downgraded the stock to reduce from hold with a price target of $211.
Otis Worldwide (OTIS) closed down more than -1% after Wells Fargo & Co initiated coverage on the stock with a recommendation of underweight.
Comcast Corp (CMCSA) closed down -1% after KeyBanc Capital Markets downgraded the stock to underweight from sector weight with a price target of $18.
Earnings Reports (9/28/2026)
IDT Corp (IDT), Jefferies Financial Group Inc (JEF), Liberty Live Holdings Inc (LLYVA), ReposiTrak Inc (TRAK), SR Bancorp Inc (SRBK), Vail Resorts Inc (MTN).
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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