Welcome to Staten News, where the indexes are at records, the 10-year is near a 24-year high, and somehow both of those things are true at once.
The S&P 500 closed Tuesday at 7,818.95. First finish above 7,800 ever. The Nasdaq set a second straight record at 27,599.79, and the Dow added 253 points to 51,521.
Put that next to Friday's jobs report and it makes no sense. Payrolls came in at 29,000. The 10-year Treasury yield closed Monday at 5.31%, its highest finish in 24 years, and Brent crude is still hanging around $100 a barrel.
The market bought anyway.
🔌 The AI Trade Picked Up the Check
Tuesday's rally had two engines, and neither one was the economy.
Marvell Technology (MRVL) jumped about 8% after raising its fiscal 2028 revenue target to roughly $20 billion, up from $18 billion. Wall Street had been modeling about $18.2 billion. Custom chips for data centers did the heavy lifting.
Then Constellation Energy (CEG) ripped more than 12% after Alphabet signed a long-term nuclear power deal to feed Google's data centers. Utilities led every sector with a 3% gain. Utilities. The sector your grandfather owned for the dividend outran tech for a day.
Nvidia barely moved, and it didn't need to. It's sitting just under a $6 trillion market cap, closer than any company has ever been. Goldman Sachs analysts expect AI infrastructure stocks to drive more than half of S&P 500 earnings growth in the third quarter, with Nvidia and Micron alone accounting for roughly a third of it.
That's not a broad rally. That's a handful of companies carrying 500.
📉 The Breadth Problem Nobody Wants to Talk About
Only about 25% of S&P 500 stocks trade above their 50-day moving average right now. The index is at a record while three out of four members sit below their short-term trend.
Translation: the scoreboard says the team is winning. Most of the roster is on the bench with ice on their knees.
Narrow markets can run for a long time. The Magnificent Seven carried the index for most of 2023 and 2024. But when leadership is this thin, one bad Nvidia headline does more damage than a hundred good small-cap prints can fix.
🍺 We Called the Constellation Brands Drop. Not for the Reason You'd Think.
On Monday we picked Constellation Brands (STZ) as this week's predicted loser. The company reported after the bell Tuesday, and at first glance the numbers looked fine.
Comparable EPS: $3.74, vs. roughly $3.55 to $3.61 expected
Net sales: $2.63 billion, up 6% year over year, vs. $2.54 billion expected
Beer net sales: $2.47 billion, up 5%
Beer depletions: down 0.6%
Full-year comparable EPS guidance: reaffirmed at $11.20 to $11.90
Beat on earnings. Beat on revenue. The stock fell 4.9% in premarket trading Wednesday to about $110, under its 52-week low of $110.60.
Because the beat isn't the story. Depletions are. That's the number that tracks how much beer actually leaves distributor warehouses for stores and bars, and the Street wanted flat to slightly positive. Modelo Especial depletions fell about 2%. Corona Extra fell about 5%. The company pointed to weaker-than-expected World Cup buying in June and July, which is a rough sentence to read when the World Cup was played in North America.
The guidance didn't help either. A midpoint of $11.55 sits under the roughly $11.72 analysts wanted. Management didn't cut. It just didn't raise, and with the stock already scraping its lows, that was enough.
Constellation also bought SpikedAde, a vodka-based canned cocktail brand, for $75 million upfront plus up to $278 million in contingent payments over five years. When your flagship beer is losing volume, you go shopping in the ready-to-drink aisle. Makes sense. Doesn't fix this quarter.
🏛️ 2 P.M. Is the Whole Day
The Federal Reserve releases minutes from its September 15-16 meeting at 2 p.m. ET today. That's the meeting where the Fed hiked.
What matters is how many officials wanted to keep going. The 10-year eased to 5.27% Tuesday, and that small dip helped fuel the rally. If the minutes show a committee leaning toward another hike at the October 27-28 meeting, that yield heads right back toward 5.3% and the tech names lose their tailwind fast.
If the minutes read split or cautious, the record run probably has room. Possible? Sure. Guaranteed? Not with oil at $100.
📅 What's Left This Week
Wednesday, Oct. 7, 2 p.m. ET: FOMC minutes
Friday, Oct. 9: Delta Air Lines (DAL) earnings, our predicted gainer for the week
Tuesday, Oct. 14: September CPI
This is the week the market finds out whether a record high can survive a bond market that keeps saying no. Two AI headlines got the S&P to 7,800. The Fed gets the next word.
Sources: NBC News market close, Constellation Brands Q2 FY2027 earnings recap, Yahoo Finance markets live, Federal Reserve FOMC calendar
This is not financial advice. Always do your own research.
— The Bandicoots 📈🍺