Executive summary
- U.S. indices finished the week mixed-to-slightly-negative after a mid-week run to fresh highs; S&P 500 fell ~0.3%, Nasdaq ~0.7% for the week despite a Friday bounce. (AP News)
- Big-tech headline risk and AI infrastructure deals dominated flows: NVIDIA/OpenAI infrastructure partnership and a pledged NVIDIA investment program; Alibaba announced a large AI capex plan – both drove sector rotation into AI-exposed names. (NVIDIA Newsroom)
- Semiconductors remained a bright spot on fundamentals: Micron reported blowout fiscal Q4 results and raised near-term guidance, underpinning semiconductor ETF strength (SOXX). (Micron Technology)
- Large single-name events (EA buyout chatter) produced outsized market moves and compressed breadth; headline-driven trading dominated typical earnings reaction patterns this week. (Reuters)
- Macro: Core PCE held at 2.9% (Aug), supporting the case for gradual Fed easing but keeping cuts conditional; the 10-year Treasury sat ~4.18% at Friday’s close, shaping discount rates for long-duration tech. (Bureau of Economic Analysis)
Market overview
One-week moves (week of Sep 22–26, 2025): S&P 500 −0.3%, Nasdaq Composite −0.7%, Dow −0.1% (Friday rebound reduced losses). Trading was dominated by headline catalysts (AI capex, M&A rumours) rather than broad earnings beats. Volume and breadth narrowed into Friday’s rally. (AP News)
ETF moves (selected): XLK (Technology Select Sector ETF) effectively flat on the week (≈ −0.03% from Sep 19 → Sep 26 closes), SOXX (semiconductor ETF) +≈1.1% (week), reflecting semiconductor outperformance led by Micron strength. VIX closed the week in the mid-teens (~16), implying subdued implied volatility after PCE prints. (Investing.com)
Earnings highlights (fallback: largest movers / headline movers)
This week’s calendar was relatively light for large-cap U.S. tech earnings; the single major tech report that moved markets was Micron (MU). Given fewer than five major tech earnings, the section highlights the largest tech-sector movers that set the tone.
Micron Technology (MU) – fiscal Q4 FY2025 (reported Sep 23)
- Revenue: $11.32B, +46% YoY; non-GAAP EPS: ~ $3.03 (beat). Guidance: strong Q1 FY26 revenue guide roughly $12.2B and elevated margin expectations. Management emphasized AI/data-center demand and HBM ramp. Financials and guidance were materially above Street expectations and cited as proof of AI hardware momentum. (Micron Technology)
NVIDIA / OpenAI partnership (headline mover) – not an earnings release but a structural market mover: NVIDIA announced a strategic multi-gigawatt deployment deal and a program to support OpenAI’s data-center buildout, with NVIDIA indicating up to a $100 billion progressive investment tied to deployments-this catalyzed the AI-infrastructure trade and lifted many hardware/software suppliers. Reuters and NVIDIA press releases described deal structure and scale. (Reuters)
Alibaba (BABA) – CEO announced a multiyear AI commitment (reported at the Cloud conference) that will scale AI capex beyond the company’s previous plan (reported ~$50–53B), boosting cloud/AI infrastructure names and affecting U.S. ADR flows. (Bloomberg)
Electronic Arts (EA) – advanced-deal takeover chatter (Silver Lake / PIF / Affinity Partners) spiked EA shares ~15% on Friday; that single-name move influenced tech/gaming peer sentiment and M&A chatter across the sector. (Reuters)
- Micron CEO Sanjay Mehrotra: “Record data-center momentum; HBM contribution near $2B this quarter.” (Micron Technology)
- NVIDIA (Jensen Huang) on OpenAI tie-up: “This is the biggest AI infrastructure project in history.” (NVIDIA Blog)
Sector performance breakdown
- Semiconductors (SOXX): outperformed this week (+~1.1%) on Micron strength and renewed AI-infrastructure demand. SOXX technicals show neutral-to-mild-buy signals (RSI ~53, MACD positive). (Investing.com)
- Technology sector (XLK): flat to slightly negative; rotation within XLK favored AI/infra names over some large cap software. XLK technicals: RSI in the low-50s, MACD modestly positive but mixed moving average signals. (Investing.com)
- Cybersecurity / Fintech ETFs (HACK, FINX): cybersecurity (HACK) slightly negative for the week (~ −1.1%); fintech ETF FINX down mid single digits reflecting profit taking in fintech exposure. Quantified ETF moves above. (StockAnalysis)
Stock spotlight (notable movers)
NVIDIA (NVDA) – catalyst: OpenAI partnership / up to $100B deployment program. Fundamentals: dominant GPU position; valuation remains high vs historic averages. Technicals: 14-day RSI ~53 (neutral), MACD near neutral (mixed momentum). Market priced in ongoing AI infrastructure capex; antitrust and concentration risk noted by analysts. (Reuters)
Micron (MU) – catalyst: Q4 beat and strong guidance. Fundamentals: revenue +46% YoY, gross-margin expansion; management flagged HBM strength. Technicals: mixed – near-term profit taking despite fundamentals (some data showed RSI in 40–65 range across providers), indicating volatility after a strong pre-report run. (Futurum)
Alibaba (BABA ADR) – catalyst: large AI spending commitment. Fundamentals: cloud/AI investment re-raters expect near-term capex and longer-term revenue opportunity from international cloud expansion. Technicals: RSI ~51 (neutral) after a run to four-year highs. (Bloomberg)
Electronic Arts (EA) – catalyst: LBO/buyout speculation. Fundamentals: cash-generative gaming franchise; valuation gap vs suitors’ models. Technicals: RSI and momentum indicators spiked into overbought territory after the takeover story. (Reuters)
Macro drivers
- Inflation (PCE): Core PCE (August) held at 2.9% YoY – unchanged from July – keeping the Fed’s optionality alive but limiting scope for aggressive near-term cuts; consumer spending rose 0.6% in August. Market reaction: relieved but cautious; equity yields and longer-duration tech remain sensitive. (Bureau of Economic Analysis)
- Rates & yields: 10-year Treasury ~4.18%–4.20% on Friday; yield moves constrained late in the week after the PCE print. Higher long yields remain a headwind for long-duration software names; semiconductor capex beneficiaries can be more sensitive to cyclical demand than interest rates alone. (Trading Economics)
- Policy / trade: new tariff headlines and potential U.S. policy changes were priced in by markets this week; such trade actions increase pricing uncertainty for hardware supply chains and retail-exposed names. (The Wall Street Journal)
Thematic shifts observed
- AI infrastructure scale-up: NVIDIA/OpenAI and Alibaba’s multi-billion AI capex plans push a two-track narrative: near-term demand for HBM, GPUs and data-center services; longer-term competition and potential regulatory scrutiny. (NVIDIA Newsroom)
- M&A / privatization wave in gaming/tech: EA LBO chatter underscores larger private-capital interest in predictable software/gaming cash flows; could kick off further sector consolidation. (Reuters)
- Cyclicals vs secular split: clear bifurcation between AI infrastructure beneficiaries (semis, data-center suppliers) and duration-sensitive growth software names.
Risk monitor
- Regulatory / antitrust scrutiny: very large vertical deals (NVIDIA/OpenAI tie-ups) are likely to attract regulator attention given market concentration risk. Reuters flagged potential antitrust questions. (Reuters)
- Sticky inflation: core PCE at 2.9% implies the Fed’s path depends on persistence-another upside surprise could compress multiples. (Bureau of Economic Analysis)
- Headline-driven single-name volatility: LBO rumors and massive capex announcements increased idiosyncratic swings this week; that raises execution risk for thematic portfolio approaches. (Reuters)
(Where relevant: cited filings) – Micron Q4 filings and the prepared remarks/presentation were primary sources for fundamental claims on Micron. (Micron Technology)
Technical landscape (chart summary)
- Nasdaq Composite: RSI ~51 (neutral), MACD slightly negative on some intraday reads; price sits near short-term moving averages – mixed technical tape. Support near 21,800–22,000, resistance ~22,800–23,000 (recent highs). (Investing.com India)
- XLK: RSI low-50s, MACD modestly positive; short-term moving averages roughly flat – suggests range trading until a clear thematic breakout (AI vs non-AI) occurs. (Investing.com)
- SOXX: RSI ~53–54, MACD positive – semis showing healthier momentum versus general tech, corroborating Micron-led fundamental strength. Key support ~260, resistance ~272 (recent intraday high). (Investing.com)
Next week’s setup
- Macro calendar: Pending Home Sales (Sep 29), JOLTS (Sep 30), ISM Manufacturing (Oct 1) – these data points feed the Fed narrative ahead of the Oct meeting window. Economic calendars compiled by Scotiabank/Econoday/TradingEconomics list the week’s releases. (Scotiabank)
- Earnings: lighter large-cap tech schedule next week; calendar providers list Nike, Synopsys (SNPS) and other non-mega-cap reports – tech focus will remain on company-level catalysts rather than broad sector prints. (Interactive Investor)
Scenarios:
- Bullish continuation: AI-infrastructure headlines translate into multi-quarter capex and durable revenue growth for semis and cloud providers; rotation continues into cyclical AI beneficiaries (SOXX > XLK). (NVIDIA Newsroom)
- Pullback: sticky core inflation or stronger-than-expected yields re-price long-duration growth stocks; headline-driven profit taking accelerates. (Bureau of Economic Analysis)
- Rotation / dispersion: M&A and capex stories cause short windows of concentrated outperformance in select names, increasing idiosyncratic risk and compressing market breadth. (Reuters)