The Closing Bell
Wall Street closes out the third quarter with the S&P leaning lower and the Nasdaq holding firm, as cooler-than-feared inflation data collides with a fresh wave of AI dealmaking and a defense-contract shake-up.
The Fed gets its print, and the market argues over what it means.
The last trading day of the quarter delivers the Fed's preferred inflation gauge: core PCE at 3.0% year-over-year and 0.2% month-over-month, with headline PCE running 3.4% annually. ADP shows private payrolls adding just 90,000 jobs, a soft number that feeds the slowdown narrative. Fed Governor Lisa Cook tells markets inflation has "been too high for too long" while insisting the committee stays committed to 2% without sacrificing the labor market, a tightrope line that sums up the day. Strategists argue the softer core reading makes any additional rate hike hard to justify, and Treasuries sell off anyway, with the long bond (TLT) down 0.5% as traders digest the data. Adding a political wrinkle, President Trump says he has asked Attorney General Todd Blanche to study a Fed report, keeping the central bank's independence in the headlines. The S&P-tracking SPDR (SPY) slips 0.3% on the day while the Nasdaq-tracking Invesco QQQ (QQQ) ekes out a 0.2% gain, and small caps via the Russell (IWM) lag, down 0.4%, underscoring the split between mega-cap resilience and broader market caution.
AI dealmaking is today's biggest story.
Synopsys (SNPS) jumps 4.8% after unveiling a multi-year pact with OpenAI to build GPT-Synopsys and a separate $1 billion-plus chip design agreement with Amazon (AMZN), which rises 1.0% as AWS presses its Nvidia challenge. Snowflake gains on an expanded five-year tie-up with LSEG, while Salesforce and Adobe both surge on the session. MongoDB (MDB) adds 3.4% even as UBS and DA Davidson trim price targets, a sign investors are looking past near-term estimates toward the broader AI infrastructure buildout.
Defense reshuffles on a $20 billion fighter award.
Boeing (BA) lands a sixth-generation fighter contract, but its shares still dip 0.9% on the day, while Northrop Grumman (NOC) tumbles 4.2% as the program loss overshadows separate news of a new Pentagon drone group.
Crude firms on supply jitters.
Oil (USO) rises 1.6% after EIA data shows a diesel-and-gasoline inventory drawdown nearly four times consensus, with refiners rallying on hopes Washington avoids an outright diesel export ban, while reports of an Iranian strike near Abu Dhabi add a geopolitical bid.
Single-stock movers:
Fair Isaac (FICO) slides on a Bank of America downgrade citing TransUnion pricing pressure. Mattel drops on CEO departure news. Cal-Maine Foods (CALM) and Conagra (CAG) both report, with Conagra beating views but flagging rising transportation costs. Hut 8 (HUT) falls 7.2% on a director's Form 144 share-sale filing. Apollo (APO) slips 2.4% even as its $18 billion private credit fund keeps bucking redemptions. A judge clears the path for Paramount Skydance to close its Warner Bros. Discovery deal.
After the bell and tomorrow:
Micron and Progress Software report after the close tonight, key tests for the chip and software trades heading into October. Bitcoin trades muted into quarter-end despite whale accumulation.
Bottom line: cooler inflation data gives the Fed cover to stand pat, but the real action today is in AI dealmaking and defense reshuffling, not in the index tape itself.