Shesa's weekend Stock Market Updates - 9|13|26

Welcome to my weekend Updates

Last week U.S. equities closed lower despite some rebounds on Friday. Early-week pressure came from rising oil prices amid Middle East tensions and higher Treasury yields. Both the PPI and CPI matched expectations at +0.4% month-over-month, though core CPI came in slightly hotter than forecast. This lifted the probability of a 0.25% Fed rate hike at the September 16 meeting to approximately 85-90%. Oil prices moved beyond $100, further raising inflation concerns. The 10-year Treasury yield closed at 4.96% and the 30-year yield reached 5.35%. Friday’s recovery was supported by a retreat in oil prices and reduced near-term policy uncertainty. Technology and hardware stocks led the gains, with Dell rising about 12% to a record high following strong results from Oracle. 

• S&P 500 declined -0.80% to close at 7,656.98

• Nasdaq declined -0.66% to close at 26,333.04

• Dow Jones declined -1.57% to close at 52,573.29

• Russell 2000 declined -2.41% to close at 2,903.94

Economic Report last week

The producer price index (PPI), a measure of final-demand costs for goods and services, increased a seasonally adjusted 0.4% for the month and 5.4% annually in-line with the expectations.

The consumer price index rose a seasonally adjusted 0.4% for the month, putting the 12-month increase at 3.4%, but core CPI rose 0.3% slightly higher than expected.

Economic Report this week

Wednesday, 9/16: The FOMC is expected to announce its interest rate decision. There is more than 80% chances of rate hikes as expected by Wall Street.

Wednesday, 9/16: August Retail Sales expected to go up 0.8%. There were 6 months of downward retail sales. Let's see if it can buck the trend.

Other news

• Last week Apple (AAPL) unveiled the iPhone Duo (its first foldable) at a starting price of $1,999 for the 256GB model. I discussed it during our investment meet. The iPhone 18 Pro Max costs at $1,299. Is it worth buying a folded by paying $700 extra cost? Well, one can buy for pride but honestly, I do not see it's worth paying so much extra premium for a folded phone without much functionality improvements. In fact, in India the new iPhone cost 50% more, regular folded phone starts at 3 lakhs rupees! And a 2TB folded iPhone costs 4.5 Lakhs which is more than a Maruti Suzuki car which cost $3.5 Lakhs!

• Tesla Semi Truck high-volume production already started in April 2026. The invitation only event will be held on Sept 24, 2026
• Tesla next generation Roadster unveil: Oct 1, 2026.  It would have Extremely fast acceleration, long range and stylish. Production is more than one year away. 

Will Federal Reserve raise interest rate?

I did a WhatsApp poll whether FOMC will interest rate this Wednesday, 9/16?  First of all, THANKS to all of you who participated in the poll. Most of the participants, 57% said FOMC is not going to raise interest rate, 40% said it may raise 0.25%. I may be wrong but I am in the 40% camp.  Why so? Here are my thoughts

1. Recent inflation data
August PPI came in exactly as expected (+0.4% MoM). However, core CPI rose 0.3% month-over-month more than the 0.2% expected. Year over year it came at 3.4% in-line with expectations. But inflation remains sticky, particularly on a monthly core basis. Oil and Brent prices keep rising which is very inflationary. 

2. The September FOMC meeting offers the most natural opportunity for a rate hike if the Fed chooses to act. The late-October meeting falls close to the midterm elections, which could make policymakers more cautious, while waiting until December risks allowing elevated inflation to persist for too long.

3. Market expectations
Prediction markets currently price roughly 80%+ probability of a 0.25% rate hike. With such strong market pricing already in place, the Fed may choose to deliver rather than surprise.

4. Credibility for Chair Kevin Warsh: A rate hike would signal that Warsh is serious about controlling inflation and is acting independently, rather than being viewed as overly influenced by the administration.

The only savior could be if Fed wants to wait for more evidence of a sticky inflation. If so, it may not bode well for the market. If they wait Wall Street may lose confidence on Fed.

Earnings Last week

Oracle beat expectations on both the top and bottom lines:

• Revenue: $19.3 billion (up 30% YoY) vs. expected $19.14 billion

• EPS: $1.92 (up 30% YoY) vs. expected $1.74

Key Highlights

• Cloud Infrastructure revenue surged 121% to $7.4 billion

• Total Cloud revenue rose 62% to $11.6 billion

• Remaining Performance Obligations (backlog) went up to $664 billion.

Stocks to watch

TSLA, NVDA, DELL, SPCX, MU, MP, AAPL, MRNA, UVXY

Note: This is not a recommendation - just a watch list

Going forward

As I mentioned earlier, there are two key reports this week. The FOMC is expected to announce its interest rate decision, and I believe there’s a good chance it will raise rates by 0.25% for the reasons I outlined previously. I could be wrong, but that seems the more likely scenario. This week could become volatile due to potential Fed action and comment about future direction.

Separately, after six consecutive months of declining retail sales, it will be interesting to see whether the August numbers can finally reverse the trend.

That said, as I noted in my September blog, September has historically been the weakest month for the stock market, and the headwinds tend to intensify further in midterm election years. Given this backdrop, I plan to keep some cash on the sidelines and remain highly selective with any new investments.

Have a good evening!