The Midday Tape
Stocks are drifting lower at midday as a blowout batch of PMI data collides with the worst consumer sentiment reading in recent memory, leaving traders unsure whether to trust the hard data or the mood.
The macro signal is split down the middle.
S&P Global's flash PMIs came in hot, manufacturing at 56, services at 57.9, composite at 57.6, all pointing to an economy still expanding briskly. But the University of Michigan's consumer sentiment index printed at 48, with consumer expectations even weaker at 48.8, and households now see inflation running at 4.7% over the next year and 3.5% over five. That combination, strong output alongside souring consumer psychology and sticky inflation expectations, is keeping the tape defensive. Treasuries (TLT) are soft, the dollar (UUP) is firmer, and gold (GLD) is down about 0.6%, a sign money isn't rushing into classic safe havens either.
Breadth is ugly even though the index tape looks calm.
Eight of eleven S&P sectors are in the red at midday, with energy the lone standout as crude strength (USO up nearly 4%) lifts the group. The S&P 500 (SPY) is barely budging, down a fraction, while the Nasdaq (QQQ) holds a small gain, underscoring how narrow the leadership is. Telecom is the session's quiet casualty: the IYZ telecom ETF is on its longest losing streak against the S&P on record, with SpaceX's expanding footprint cited as the structural overhang pressuring legacy carriers and tower plays.
Earnings are doing real damage to two blue chips.
American Express (AXP) is down close to 4% after mixed third-quarter results and FY26 sales guidance that came in below Street estimates. CFO commentary on CNBC tying job cuts to AI preparation added to the unease around the growth outlook. Procter & Gamble (PG) is off about 2.7% even as Evercore ISI and RBC Capital both raised price targets and kept bullish ratings, a classic case of the stock selling the news despite analysts staying constructive.
The AI infrastructure trade keeps finding new financing angles.
Reports that Blackstone's (BX) $2.3 billion stake in CoreWeave (CRWV) is feeding a broader wave of AI-linked lending are keeping the mega-cap AI complex in focus, with Meta (META), Microsoft (MSFT), Broadcom (AVGO), Nvidia and Apollo named as beneficiaries of the capital flowing into data center buildout. Honeywell (HON) is getting price target bumps from JPMorgan and Evercore but trading little changed, a sign the move has largely been priced in.
Still ahead this afternoon:
more regional bank and industrial earnings continue to filter through after this morning's First Citizens (FCNCA), Rogers (RCI), and SLB prints, and traders will be watching whether the Michigan sentiment shock bleeds further into rate-sensitive sectors or stays contained to telecom and consumer names already under pressure.
Bottom line: strong PMI data is losing the battle against weak consumer sentiment and disappointing mega-cap earnings, leaving energy and AI infrastructure as the only pockets of strength in an otherwise narrow, risk-off tape.