Major indices moved to session highs while oil slid after reports the US and Iran have entered a “technical stage.”

In other news, Trump used Truth Social to announce that Xi Jinping liked his proposal to call artificial intelligence “super intelligence.”

Sectors

The AI plays are back, pushing Industrials (XLI) and Technology (XLK) to the top of the leaderboard.  Semiconductor-linked names are outperforming, giving some relative strength to those sectors. The Energy (XLE) sector is the laggard as oil is down for the day. Elsewhere, Communication Services (XLC) is lower as Meta Platforms' (META) impressive Muse-launch rally takes a breather.

Microsoft (MSFT) announced its revamped Copilot. This update positions Copilot as a proper tool for the Office and productivity apps Microsoft is known for. There are three new core areas: Home, Code, and Autopilot, with the last being an agent that runs tasks for you, while Code is a prompt for writing apps for you.

Tesla (TSLA) ramped up its Optimus production from a few dozen units per week in Q2 to several hundred, but reports indicate units lack generalization for varied tasks. On the AI side, Tesla has collected 500k+ hours of training data and aims to double that by year-end.

Economic Data

Core capital goods orders increased by 1.59%, nearly three times more than expected at 0.6%. This comes after an upward revision to a 0.59% gain in July.

Consumer Sentiment fell to a four month low in September to 48.1 from 51.7 in August. This was driven in part by the increase in one-year inflation expectations to 4.6% from 4.0% in August. The five-to-ten-year inflation expectations also rose to 3.4%. Notably, the outlook for business conditions declined to its lowest level since 2022.

The Atlanta Fed's GDPNow estimate for Q3 real GDP eased to 5.02% from the last update of September 16^th at +5.10%.