10-1-2026: AI's Rebrand to SI, Surging Yields + Oil Price Volatility

Eric Criscuolo, Market Strategist at the NYSE, reviews a quarter capped by President Trump's order rebranding AI as Super Intelligence, part of the Triple Play of SI, yields, and oil that left the S&P 500 up 2% in Q3 despite a 2% equal-weight decline. September was historically weak, with yields surging on Kevin Warsh's hawkish tone, though Q4 typically rallies in mid-term years. This week, Iran headlines lifted oil, Anthropic's leaked filing revealed huge compute spending, and OpenAI unveiled its new agent platform. Williams eased hawkish tones, pulling yields lower and the S&P down 1% on the week.

Hey, I'm Eric Riscolo, market strategist at the New York Stock Exchange. And this is market storylines.

Every week we're here to keep you up to date on the key trends and events driving global markets.

We're recording this on Thursday, October 1st because it's another week that AI has not killed all of humanity.

That's because President Trump ended AI with a stroke of a pen.

Yes, AI is no more. It's now SI, super intelligence.

There's an executive order on the White House website if you don't believe me.

It reads in part quote, the executive branch shall use the terms super intelligence and SI in place of artificial intelligence and AI and will not acknowledge the usage of artificial intelligence and AI in any applicable setting.

Besides AI's first rebrand, this week saw both September and the third quarter come to an end.

What has not come to an end is the triple play that has driven market action over that time frame.

The intelligence formally known as artificial or TIFKA, yields and oil.

The S&P 500 weathered a 30% rally in oil and a monster spike in yields, 70 to 80 basis points, and managed to finish 3Q up 2%.

Now unfortunately, it was only a relatively few stocks that did most of the work.

The equal weight version of the S&P fell 2% in 3Q including an ongoing string of seven straight weekly declines if things hold.

Now that's only happened twice previously.

The energy and healthcare sectors were two outliers to that trend, as they joined the big tech names in significantly outperforming the index overall.

September played out in a similar manner.

The S&P 500 finished down 0.5% while the equal weight fell 5%.

The headline index would have finished unchanged if not for a swoon into the close yesterday.

Small caps followed the equal weight also down about 5%.

Now much of the move higher in yields took place in September with the short end of the curve jumping about 60 basis points triggered by Fed share war's hawkish Jackson Hole speech.

It wasn't just a US event though. Global yields ripped higher.

And factors like the spread between French and German bonds are gaining more attention.

Now, Michael and I have noted multiple times here that September is the weakest month historically for equities.

So some of these numbers are not completely out of left field.

The flip of the calendar, however, sees that dynamic flip as well.

October and November have historically been the strongest months in midterm election years.

According to Citadel, since 1930, the S&P has gained almost 6% on average in Q4 during midterm years.

That's double the average gain for the whole year. We are moving into strong seasonality.

And now we'll pivot to what happened this week, centered on those three pillars, starting with oil and Iran.

There was a lot of back and forth headlines focused around the nuclear issue as the sticking point for any progress in peace talks.

The December Brent crude contract is up about 3% this week with the November contract settling yesterday.

Moving to SI, details from Anthropic's IPO filing leaked and included disclosure of 518 billion on compute spending over the coming years.

Open AI, which may need to change its name now, held its developer conference and introduced its own agent platform, following Meta's release of its Muse agent, which had catalyzed a huge rally in that stock.

Smart ring maker Aura became the latest company to postpone its IPO, citing market conditions, which is interesting considering the S&P 500 hovers just below all-time highs with volatility low.

On yields, the hawkish Fed speak took a turn when New York Fed President Williams said there was no urgency to hike rates at the next meeting in October.

Yields started to really react today, however, with the two-year down over 10 basis points.

The S&P 500 is down about 1% so far this week with most other US index indexes seeing similar performance.

Tech, energy, and utilities are the only sectors flat to higher currently.

Financials, healthcare and materials are lagging.

Banks are continuing the sell off that occurred all through September.

That's something to keep an eye on.

In other assets, precious metals are mostly lower with gold down about 3%, still weighed down by high yields and the US dollar, which was up about 1% this week after a 2% gain in September.

Bitcoin and Ether are slightly higher this week, trading around $85,000 and $2,700 respectively.

Following the sharp rally in mid- September for both.

Moving to the future. After ending the Red Sox season last night, the Yankees will begin their playoff series against the Rays on Saturday.

And the Islanders will look to bounce back from their opening night loss to the Toronto Maple Leafs.

Tomorrow, the monthly payrolls report will be released.

Now looking to next week, the calendar will be relatively light.

ISM Services is probably the biggest update along with trade data, weekly claims and the latest University of Michigan sentiment survey.

We'll also hear more Fed speak, including the FOMC minutes from last meeting, as well as 10 and 30-year treasury auctions, which should get a lot of attention given what we're seeing in the bond market.

Earnings will include Delta, Constellation brands, Levi's, Applied Digital and Pepsi.

Now that'll do it for this week. You can watch market storylines on tv.myse.com or on the MYSE YouTube channel.

Thanks for joining me. I'm Eric Riscolo. We'll see you next week. Go Yanks.