September 25, 2026

Wall Street is set to end the week on firmer footing Friday, with S&P 500 futures indicating a 0.23% higher open and the Nasdaq futures leading at +0.36%. The dominant macro theme is a pullback in crude oil, which is down 2.07% to $92.65 amid renewed hopes for a U.S.-Iran de-escalation and a potential Strait of Hormuz arrangement — a dynamic reinforced by prediction markets, where Polymarket now prices a 62% probability of the U.S. announcing an end to the Iranian blockade by year-end. Cheaper energy is a net tailwind for risk assets even as it guts the energy patch, where XOM (-1.07%), CVX (-1.24%), and COP (-1.19%) all trade lower pre-market and the sector sits at the bottom of the leaderboard, down 1.16%.

The counterweight remains the relentless move higher in Treasury yields, with the long end pushing past 5.2% and Thursday's 7-year note auction clearing a striking 5.085% versus a 4.512% prior. That backdrop is doing real work in options positioning — SPY carries a 25-delta put skew of 5.9% and a put/call volume ratio of 1.15, evidence that traders are paying up for downside protection even as spot grinds higher. With dealers in positive gamma and a GEX call wall at 768 versus a put wall at 763, the nearest-expiry implied move of just ±0.8% suggests a pinned, range-bound tape absent a fresh catalyst.

Sector rotation favors cyclicals into the open. Industrials (+0.40%) benefit from a solid data slate — durable goods orders held at 0% versus a -0.4% forecast, non-defense capital goods ex-aircraft jumped 1.6%, and the Kansas Fed manufacturing index beat at 20 — lifting CAT (+0.99%) and GE (+0.94%). Financials (+0.37%) draw support from the steeper curve, with JPM (+0.57%), BAC (+0.73%), and MS (+0.68%) all bid. Real Estate leads at +0.62%, but that is almost entirely an EQIX story (+5.34%), as data-center REITs ride the AI-infrastructure theme. Defensives lag, with Staples down 0.20% on weakness in COST (-1.17%) and WMT (-0.44%).

The AI trade is sending mixed signals. Semiconductors are firm — AMD +1.66%, AVGO +1.18%, NVDA +0.42% — and the Akamai/Anthropic deal is generating buzz, yet Michael Burry's warning that MSFT, AMZN, and ORCL could face AI write-off shocks is a reminder of the elevated capex scrutiny hanging over the megacaps. META (-0.87%) underperforms on questions about monetizing its AI investments. On the policy front, the Fed rate-cut path remains firmly priced out — Polymarket assigns a 97% probability of no cuts in 2026 — leaving the market's near-term focus squarely on next Friday's data-heavy week, culminating in the September jobs report (consensus 100K) and the PCE inflation print on September 30. This afternoon brings the final read on Michigan consumer sentiment (est. 47.6) alongside speeches from Fed officials, though none is likely to shift the no-cut narrative.