What Happened Yesterday
Monday, September 21
Close | Move | Mood | |
|---|---|---|---|
S&P 500 (SPY) | 773.50 | +1.55% | Tailgating the record |
Nasdaq 100 (QQQ) | 741.47 | +2.77% | Downloaded the app |
Dow (DIA) | 519.78 | +0.76% | Read about the app in the paper |
Russell 2000 (IWM) | 285.58 | +0.52% | Still waiting on the invite |
VIX | 14.87 | +0.41% | Suspiciously awake |
10-Year Treasury | 4.956% | -4.1 bp | Under five, holding its breath |
Gold (GLD) | 398.38 | -0.70% | Nobody needed a bunker today |
Oil (USO) | 148.16 | -3.68% | Heard a rumor of peace |
Bitcoin | $86,603 | +6.73% | Shorts got squeezed like a lemon |
The Nasdaq Composite closed at 27,122, a record, beating its June 2 high. The S&P 500 index finished at 7,764.70, still about 0.4% under its August 13 record. Bitcoin is the UTC-day bar.
Meta Finally Shipped Something People Wanted
For two years, Meta spent like a sailor on shore leave on AI and had little to show for it. Then it released Muse, a free AI agent. An agent is an AI that does chores for you instead of just chatting, like booking travel, sending email, or buying stuff. Muse hit No. 1 on Apple's App Store.
Wall Street noticed. Wells Fargo raised its price target from $640 to $796. A price target is an analyst's one-year guess, so that is a public change of heart. Meta closed up 11.34% at $741.25. That added roughly $190 billion in market value in one session. That is Yahoo Finance's math, and a lot of couch-cushion money for one Monday.
Then came the plot twist. Amazon blocked Muse from its retail site, starting Sunday night, per Bloomberg. Amazon says outside bots are not allowed to shop its store, and it objected that Muse can see a user's account pages and order history. It has already fought off shopping bots from Google, OpenAI and Perplexity.
Meta built a butler that can run your errands. Amazon's answer was "not in my store, pal." Every AI company wants an agent that shops for you. Every store wants to be the one you shop with. That fight is just getting started, and Meta shows off the next chapter at its Connect conference on Wednesday.
The Chip Stocks Got a Second Helping
Muse did not lift Nvidia the most. It lifted the CPU crowd. A CPU is the general-purpose brain in a computer, as opposed to the graphics chips that train AI models. The bet is that millions of agents running errands need lots of plain old processing power.
The scoreboard reads like a lottery ticket. Arm +17.16%. Intel +12.14%. AMD +9.95%. Qualcomm +9.29%. The big chip ETF (SMH) rose 4.02%. Nvidia added a polite 2.30%, like the rich uncle clapping at someone else's wedding.
AMD's move carried it past a $1 trillion market value for the first time, per Yahoo Finance and Barron's. When Lisa Su joined in 2012, this company was close to going bust. Now it is in a club you need a ten-digit guest list to join.
One week ago the chip crowd dumped stocks because an AI boss said everyone should slow down. On Monday they bought everything because an app got popular. This crowd's mood swings would get a teenager grounded. The trend under it is the same both times: AI needs more chips than anyone can make.
Oil Fell on a "Probably"
The oil fund USO dropped 3.68%. The Brent crude fund fell 2.81%, and the energy stock ETF (XLE) lost 2.88%. That made energy the day's worst sector.
The trigger was one word. President Trump told Fox News he would "probably" be open to meeting Iran's President Masoud Pezeshkian, who is in New York for the UN General Assembly. No meeting is scheduled. Iran has not accepted one. But after months of war around the Strait of Hormuz, a "probably" was enough to take some fear out of the oil price.
Stocks also got a boost from China. Treasury Secretary Scott Bessent met Chinese Vice Premier He Lifeng in New York on Sunday and called the talks "successful." They discussed a new U.S.-China channel for AI concerns. Xi Jinping visits the White House on Thursday. The 10-year yield slipped 4.1 basis points, or hundredths of a percentage point, to 4.956%.
The market priced peace off a maybe and a trade deal off a handshake. Cheaper oil means less inflation, and less inflation means a Fed that might ease off. That chain is real. But every link in it on Monday was a hope, not a signed paper.
Micron's Workers Are Warming Up the Picket Signs
Micron's talks with its union in Taoyuan, Taiwan failed on Monday, the second mediation round with no deal. The union wants 15% of operating profit as a bonus and now plans a strike vote. Micron says it cannot commit before its September 30 earnings. No strike has been called. The stock rose 2.77% anyway.
Here's the Thing: a strike vote is not a strike. But memory is already in short supply, and a walkout is the one shortage you cannot fix by writing a bigger check.
What to Watch Today
The calendar, all times CT
Before the open: AutoZone (EPS estimate $54.78) and Thor Industries report.
9:00 Richmond Fed manufacturing index, estimate 5 vs. 4 last month.
9:05 New York Fed President John Williams speaks at the NY Fed's Treasury Market Conference. He votes at every meeting, and he has been one of the softer voices on the committee lately.
9:20 Fed Vice Chair Philip Jefferson speaks at the same conference. He votes too. We have not pulled a policy stance from him, so we will not guess one.
Noon: the $69 billion 2-year note auction. The 2-year is the purest bet on where the Fed goes next.
Richmond Fed President Tom Barkin also speaks today. He has no vote this year.
After the close: KB Home reports (EPS estimate $0.88). Builders are selling homes with Freddie Mac's 30-year mortgage average at 6.95% as of last week. Good luck with that.
The Fed math: after the September 16 hike, CME FedWatch and the prediction markets put an October hike at about 54% to 56% as of the weekend. Still a coin flip, now with a slightly heavier heads.
Later this week: Meta Connect on Wednesday. Trump and Xi at the White House on Thursday.
The one thing that could ruin everyone's day
Tehran says no. Monday's oil drop was built on Trump's "probably." If Iran rules out a meeting, or the week in New York ends with speeches and no sit-down, oil could take back Monday's drop in an afternoon. The AI rally has its own engine. The inflation relief does not.
An app, a handshake, and a "probably" added a record to the Nasdaq. Nobody signed anything. Enjoy the ride, and keep your receipt.
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