Good afternoon. QQQs +19bps in a choppy session: +55bps at the open, flat by late morning with the 30Y pushing through 5.6%, and modestly green into the close. Semis +1.2% led the way higher, though well off the +2.4% highs from just before 11am, with semicap (AMAT +5.2%; KLAC +3.9%; ASML +3.6%; LRCX +3%) bid on the TSM Texas report and optical (LITE +5.7%; GLW +4.7%; COHR +3.5%) bouncing off Monday’s ECOC hangover. Software -20bps lagged for a second day as app software (MNDY -3.8%; HUBS -2.5%; ADSK -1.9%; TEAM -1.4%) made its lows mid-keynote at an OpenAI Dev Day where the main focus was selling agents into the enterprise, while consumer internet names hit on Monday bounced (DUOL +6.2%; CVNA +5.2%; DASH +4.9%).
Macro didn’t help. The Conference Board’s September confidence print was ugly (81.9 vs. ~89 expected, the lowest since April 2014, with respondents citing fuel costs and jobs), and the curve bear-steepened: 2Y -3bps to 4.89% on the data while the long end kept selling off, with the 10Y +2bps to 5.26% (+30bps in a week) and the 30Y +3bps to 5.59% for the first time since 2002. NY Fed’s Williams said at 2pm that “one further upward adjustment of the federal funds target range may be appropriate late this year,” with no urgency after the September hike; the market still has ~70% odds of a 25bp hike on 10/28, ~40-50bps of hikes for the rest of the year and ~100bps cumulative through next September. Crude -3.6% to ~$89 as Saudi Red Sea exports recovered, Gulf flows got back above 90% of pre-war levels and DOE offered a 40M-barrel SPR exchange. BTC flat at ~$83.5K.
OpenAI was in focus all day, even before Dev Day. First Tibo was on X saying they are lowering usage on the $200 Pro Plan:
Then, Axios reported around 10:15am that OpenAI’s annualized revenue run rate is up more than 70% since the start of 3Q to almost $70B, with B2B revenue more than doubling over the same period and more consumer revenue added in 3Q than in all of 2025. Compare that with the last number given to the media ($40B on 8/13) and Yipit’s ~$43B (9/17). RI and PHC dug into the math for us in TMTB Slack: