Market Snapshot

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📉 Banana Bits

• Starship reached orbit for the first time, deploying 26 Starlink satellites as SpaceX fell 2.2%

• Bank stocks slid as Fed-hike bets and AI agents threatened banks’ cheap-deposit advantage

• U.S. and China each named $30 billion of goods for possible tariff cuts

• Spot gold fell about 3% to its lowest since early August, while silver sank roughly 5%

• Roblox fell 9.9% after Jefferies downgraded it, warning its bookings rebound will take longer and cost more

Market News

Stocks Slip as the 10-Year Parties Like It’s 2007

Stocks fell Monday to start the final week of September on the wrong foot. The S&P 500 dropped 0.77% to 7,683.69, while the Nasdaq lost 0.92% to 26,820.38. The Dow fell 347 points to 51,481.51, and the small-cap Russell 2000 slipped 0.69%. That more than erased Friday's gains for the S&P and Nasdaq and left the S&P slightly lower for September with two trading days remaining.

President Trump confirmed he’d rejected Tehran’s offer to reopen the Strait of Hormuz within seven days, telling reporters, “They made a proposal but I rejected it.” Oil jumped more than $4 a barrel, with Brent hitting $108.83. But then it started giving most of that back after reports that Qatari mediators plan separate talks with both sides and that Saudi Arabia is ramping its East-West pipeline back up after repairs. Brent settled up 96 cents at $105.28. WTI finished up just 19 cents at $92.60.

Monday's bond selloff was arguably the bigger story. The 10-year Treasury yield climbed about 6 basis points and briefly topped 5.27%, once again pushing to its highest level since 2007 and extending its September increase to nearly half a percentage point. Rising oil and inflation concerns have been part of the pressure, alongside heavy government borrowing and a surge in corporate debt issuance tied partly to AI infrastructure spending. By Monday, markets were pricing roughly a 70% chance of another Fed hike at the Oct. 27–28 meeting.

Turning back to equities, Meta took a 4.8% dive and led communication services to the bottom of the sector list. Nvidia went the other way, up 1.7% after announcing a record buyback. Defensive sectors like consumer staples and health care held up the best, but 8 of the 11 sectors still closed lower. Just three S&P 500 stocks hit new 52-week highs on Monday, while 28 hit new lows.

Looking forward, It’s a packed week for data! August PCE, the Fed's preferred inflation gauge, comes out Wednesday, and Micron reports after the bell that same day. Thursday has ISM manufacturing and Nike earnings. Friday is the September jobs report, where early estimates call for about 85,000 new jobs.

Peel Take: Forget the AI headlines for a second and watch the 10-year. It started the year around 4.2% and closed Monday near 5.24%, meaning investors can now lock in a yield north of 5% on 10-year Treasuries. That’s a much higher hurdle for stocks, especially when the rally is already this narrow. Deutsche Bank says mega-cap growth and tech are up 14% since the end of July while the rest of the S&P 500 is down 3%, and only about 28% of S&P 500 stocks finished Friday above their 50-day moving average. With PCE due Wednesday and payrolls Friday, those two reports could decide whether yields keep climbing or finally get some relief. Until then, short-term Treasuries yielding around 4% make waiting look pretty comfortable.

What's Ripe

Okta Inc. (OKTA) 3.58% 

• Okta climbed 3.58% to $202.18 on Monday after another round of bullish analyst calls focused on the company's growing role in securing AI agents. Citizens JMP raised its price target to $225 from $180, keeping its Market Outperform rating and arguing that AI could drive a sustained reacceleration in growth.

• The broader analyst enthusiasm has been building since Okta's recent customer conference. Roth Capital said its Okta for AI Agents offering is producing roughly a 50%–60% uplift in deal values, while Scotiabank raised its target to $245 on Monday. Okta now has a market value of roughly $35 billion.

• Peel Take: AI agents may be great at getting work done, but somebody still has to decide what they’re allowed to access. That puts identity security right in the middle of the agent boom, and Wall Street is starting to price that into Okta. The interesting part now is whether bigger AI-related deals actually translate into faster revenue growth, not just bigger price targets.

Nvidia (NVDA) 1.68% 

• Nvidia closed at $228.86, up 1.68%, and was up as much as 3.6% intraday. The move came on a day when AMD fell 3.6% and Micron slid 2.6%.

• The board approved a $150 billion increase to its share-buyback authorization, bringing the remaining authorization to $235 billion, or roughly 4% of Nvidia’s $5.5 trillion market value. Nvidia also launched its Open Agent Safety Platform, designed to help keep autonomous AI agents inside defined security boundaries.

• Peel Take: A $150 billion buyback authorization is massive, even for a $5.5 trillion company. But the more interesting part might be the safety push. If AI agents keep getting more autonomous, somebody’s going to get paid to build better fences, and Nvidia clearly wants that business too.

What's Rotten

MongoDB (MDB) 18.46%

• MongoDB closed at $334.68, down 18.46%, after falling as much as roughly 27% intraday. The selloff wiped about $6 billion from its market value.

• CEO CJ Desai stepped down effective immediately, less than a year into the job, to become Meta’s chief enterprise platform officer. Former CEO Dev Ittycheria is back as interim CEO, while MongoDB reaffirmed its Q3 and fiscal 2027 guidance ahead of Tuesday’s Investor Day.

• Peel Take: Getting dumped the night before prom is rough, and that’s just about what happened to MongoDB. The CEO left Monday and the big Investor Day is Tuesday. For what it’s worth, guidance didn’t change, and Ittycheria already ran the place for 11 years, so there’s at least some continuity at the top. Still, when a CEO leaves less than a year in, investors start wondering what else they don’t know.

Boeing (BA) 6.91%

• Boeing fell 6.91% to $184.39, making it one of the Dow’s biggest drags and leaving shares only about 4% above their 52-week low.

• FAA Administrator Bryan Bedford said the agency will delay certification of the 737 MAX 10 until it evaluates a newly disclosed software issue that can block automated flight guidance during a specific missed-approach scenario. Boeing and supplier GE Aerospace are working on a fix, while the FAA said the issue could increase pilot workload but does not cause pilots to lose control. Reuters

• Peel Take: The MAX 10 has already faced a long certification process, and this software issue adds another delay. The FAA’s caution makes sense, but for Boeing the financial impact is straightforward: every pushback can delay deliveries and the cash that comes with them. With shares only about 4% above their 52-week low, investors have little patience for more setbacks.

🧠 Technical Trip

Interview Q&A from Evercore

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🦈 Deal Dispatch

M&A, IPOs, And Other Notable Transactions

• AMD is buying World Labs for $8.2 billion in stock, with Fei-Fei Li joining as EVP and chief scientist

• Brixmor and Everview are buying Slate Grocery REIT for $2.34 billion, splitting its 115-property portfolio

• Northern Star rejected Gold Fields’ A$38.7 billion takeover bid, calling the proposal “highly opportunistic”

• Evonik rejected BASF’s roughly €10.3 billion takeover bid, saying the offer undervalued the company

• Merck paid $400 million upfront to license SciBrunch’s cancer drug, with milestones taking the deal to $2.13 billion

Student Success Corner

Banana Brain Teaser

Previous

A company has $25M of accounts payable at the beginning of the year and $33M at the end. What is the impact on cash flow from operations?

Answer: +$8M

Today

A portfolio has a 60% chance of gaining 15% and a 40% chance of losing 10%. In the following year, if it gained in Year 1, it has a 70% chance of gaining 15% again; if it lost in Year 1, it has only a 30% chance of gaining 15%. What is the probability the portfolio gains in both years?

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Happy Investing,
Elie, Mitchell, Fernanda, Nick, & Patrick

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