Good morning. The S&P 500 slipped 0.3% Wednesday to 7,651.54 after August core PCE cooled to 3.0% year over year — below the 3.3% Reuters consensus — while the 10-year Treasury yield rose 3 bp to 5.29%, clearing the June 2007 high it had only matched on Tuesday (AP; BEA; US Treasury). Micron posted a record quarter after the close. Jobs land Friday.
📊 THE OVERNIGHT SNAPSHOT
Stocks, VIX and yields are Wednesday's close. Oil Wed settles are Reuters. Futures are early Thursday Yahoo prints. Crypto as of ~11:54 PM ET Wednesday. Nikkei Wed close; Thu morning print in the one-line read.
One-line read: Wednesday priced cooler PCE into a higher 10-year. Overnight priced a Tokyo follow-through — Nikkei +1.46% to 67,727 Thursday morning (AFX/RTT).
Market | Last | Change |
|---|---|---|
S&P 500 futures | ~7,743.50 | ▲ ~28 pts (+0.36%) |
Nasdaq-100 futures | ~30,880 | ▲ ~181 pts (+0.59%) |
Dow futures | ~51,354 | ▲ ~76 pts (+0.15%) |
S&P 500 (Wed close) | 7,651.54 | ▼ 0.3% (−19.30) |
Nasdaq Composite (Wed) | 26,861.06 | ▲ 0.2% (+63.52) |
Dow (Wed) | 50,906.05 | ▼ 0.9% (−443.87) |
Russell 2000 (Wed) | 2,796.86 | ▼ 0.4% (−11.06) |
VIX (Wed) | 16.34 | ▲ 0.30 pts |
US 10Y yield (Wed) | 5.29% | ▲ 3 bp |
US 2Y yield (Wed) | 4.88% | ▼ 1 bp |
WTI oil (Wed settle) | $90.42 | ▲ 1.2% (+$1.04) |
Brent oil (Wed settle) | $103.50 | ▲ 0.9% (+$0.91) |
Bitcoin | $83,672 | ▲ 0.5% (vs 24h open) |
Ether | $2,691 | ▲ 0.8% (vs 24h open) |
Nikkei 225 (Wed close) | 66,753.72 | ▲ 1.9% |
Stoxx 600 (Wed) | 634.89 | ▼ 0.5% |
🌙 WHAT HAPPENED WHILE YOU SLEPT
PCE cooled. The 10-year didn't.
August core PCE rose 3.0% year over year and 0.2% month over month, below the 3.3% and 0.3% Reuters consensus; headline PCE was 3.4% year over year versus 3.7% expected (BEA; Reuters). Stocks still closed mixed: the S&P 500 fell 0.3% to 7,651.54, the Dow 0.9% to 50,906.05, and the Nasdaq rose 0.2% to 26,861.06 (AP). The 10-year did not get the memo.
The numbers: The 10-year closed at 5.29% on the official daily par curve, up 3 bp from Tuesday's 5.26%, and above the June 12, 2007 FRED daily high of 5.26% it had only matched a day earlier (US Treasury; FRED DGS10). CME FedWatch put October hike odds at about 37%, down from roughly 51% Tuesday and nearly 71% a week earlier (Reuters). Q2 GDP's third estimate was revised to a 2.2% annualized rate (Reuters). WTI settled at $90.42 (+1.2%) and Brent's expiring November contract at $103.50 (+0.9%) (Reuters). For September, the Dow fell 4.29%, the S&P 0.45%, and the Nasdaq rose 1.86%; the S&P and Nasdaq still booked a second straight quarterly gain (Reuters).
Why it matters: Core PCE is the Fed's preferred inflation scorecard. A cooler print cut near-term hike odds — and the 10-year still climbed. Mortgage quotes, bond-fund prices and the growth stocks inside an S&P 500 fund all copy that yield. Your 401(k) owns both stories.
What to watch: Whether the 10-year holds above Wednesday's 5.29% Treasury close into Thursday's open, and whether October FedWatch odds stay near 37% ahead of Friday's jobs report.
🔑 3 THINGS TO KNOW BEFORE THE OPEN
Thursday edition: the overnight earnings, the factory data, and Friday's labor print.
1. Micron posted a record quarter.
Fiscal Q4 revenue hit $54.23 billion with non-GAAP EPS of $33.42; the company guided fiscal Q1 2027 revenue to $61.5 billion ± $1.5 billion (company release, 4:01 PM ET Wed). After-hours reaction was muted across secondary reports.
Why it matters: Your index fund owns the AI memory cycle. Guidance is the line that usually moves the sector more than the reported quarter.
2. Factories and claims fill Thursday.
Initial jobless claims and manufacturing PMI/ISM readings land Thursday morning (ET), per the week's calendar.
Why it matters: Soft labor and factory prints are what bond traders listen for when the 10-year is already above 5.2% — and mortgage quotes track that yield.
3. Tokyo extended the bounce.
The Nikkei closed Wednesday at 66,753.72 (+1.9%) and was up 1.46% to 67,727 Thursday morning on semiconductor and AI-related buying (FRED/Yahoo; AFX/RTT).
Why it matters: Asia is the first vote after a US quarter-end mixed close — and a global equity fund owns that vote.
📈 CHART OF THE DAY
The 10-year just cleared its 2007 high. For context, Tuesday's Treasury close was 5.26% — equal to FRED's June 12, 2007 daily high. Wednesday printed 5.29%, up 3 bp. Notice the last two weeks: the climb from the mid-4.9%s into the high-5.2%s is still the rate story setting the stock story.
Source: FRED DGS10 through Sep 29, 2026; US Treasury daily par yield curve for Sep 30, 2026.
⚡ QUICK HITS
Stocks: Declining issues beat advancers by about 1.66-to-1 on the NYSE; the S&P posted 11 new 52-week highs and 24 new lows (Reuters).
Tech: Microsoft, Apple and Nvidia each rose and helped lift the S&P tech sector about 0.6%; nine of 11 S&P sectors finished lower (Reuters).
Labor: ADP private payrolls rose 90,000 in September after a downwardly revised 36,000 in August (Reuters).
Movers: Hewlett Packard Enterprise climbed 3.9% after raising a long-term networking growth forecast; Moderna fell 5.3% after a Citigroup downgrade to "sell" (Reuters).
Wildcard: Liquidia cratered about 57% on a patent ruling — a reminder that one-name landmines still happen on quiet index days (Stocktwits Daily Rip).
🧠 EXPLAIN LIKE I'M BUSY
Why can PCE cool and the 10-year still rise?
PCE is the Fed's preferred inflation gauge. When it prints cooler than expected, markets often cut the odds of the next rate hike — Wednesday's FedWatch October odds fell to about 37%. The 10-year is a longer story. It also prices growth, deficits and how much inflation investors think will stick for a decade. Stronger Q2 GDP (revised to 2.2%) and still-expensive oil can keep long yields climbing even as the next hike looks less certain. Think of FedWatch as next month's weather forecast, and the 10-year as the climate. Your mortgage quote and bond fund hear the climate.
🗓️ TODAY'S CATALYSTS (ALL TIMES ET): THURSDAY + THE REST OF THE WEEK
Day | Event | Why it matters |
|---|---|---|
Thu | Regular open (NYSE + bond market both open) | No holiday. Yields and factories setting the tone. |
Thu morning | Jobless claims; manufacturing PMI / ISM | Labor and factories after a cooler PCE. |
Thu after close | Nike earnings (call afternoon PT) | A consumer read into Q4. |
Fri 8:30 AM | September jobs report (BLS) | Last labor print before the Oct 27–28 Fed meeting. |
Oct 29 8:30 AM | September PCE (BEA) | Next Fed inflation scorecard. |
That's the desk. See you Friday at 6 AM ET.
— The Overnight Desk Team
Note: The Overnight Desk Team may hold positions in assets discussed. Nothing here is investment advice. · Sponsor: No one paid for any mention in this issue.
