MPC Markets Morning Call — 21st September 2026: Semis Lift Wall Street as 10-Year Returns to 5%; Weekend Riyadh Strikes Raise the Stakes

US equities finished Friday’s triple-witching session in split fashion, with the S&P 500 up 0.17% to 7,650.50 and the Nasdaq Composite rising 0.40% to 26,522.55 on Reuters’ official print, while the Dow fell 0.18% to 51,682.64. Roughly $7 trillion of options notional expired — one of the largest on record according to Citadel Securities — amplifying intraday swings and muddying the signal. Volume was heavy at 25.29 billion shares versus a 16.19 billion 20-day average. Technology was the only S&P sector to finish in the green, carried entirely by a semiconductor bid that lifted the Philadelphia Semiconductor Index 2.78%. Breadth was poor: decliners led on the NYSE by roughly 1.78-to-1 and the Russell 2000 fell 0.5% to 2,860.40 as higher yields bit into financing-sensitive names.

The week closed out a chapter dominated by Wednesday’s Fed rate hike — the first since 2023 under Chair Kevin Warsh, taking the funds target to 3.75–4.00% — and Thursday’s tech-led rebound. The S&P posted a nominal weekly loss while the Nasdaq finished above the prior Friday; the Dow had its biggest weekly percentage decline since March. CME FedWatch colour now shows a 55.4% chance of another 25 bp hike in October, up from 42.5% a week ago and just 7.2% a month ago. Bank of America economists reaffirmed calls for October and December hikes, warning investors to prepare for the Fed funds rate above 5%. Edward Jones’s Angelo Kourkafas noted the September move “isn’t likely one-and-done” but also “doesn’t look like the start of an aggressive rate-hiking cycle.”

Treasuries sold off Friday after Thursday’s post-Fed relief bounce, pushing the 10-year yield up roughly 6 bp to 5.00% (CoreQuant ~5.006%) and reversing the brief move toward 4.94%. Germany’s 10-year hovered near 3.52%; Britain’s climbed to 5.31%. Australia’s 10-year sat at 5.26%. The drivers remain unchanged: oil still above $100 keeping inflation-premium talk alive, FedWatch October odds firming to 55.4%, and heavy options-expiration flows amplifying swings.

Miller Tabak’s Matt Maley warned there is nothing fundamental yet to expect a sustained collapse in oil or yields — “we could still see a significant jump in volatility.” Morgan Stanley Wealth’s Daniel Skelly called it a “Tale of Two Time Horizons” — near-term oil, yield and midterm election risk versus a longer-term constructive outlook. Treasury Secretary Bessent’s push to ease long-end supply pressure through larger scheduled buybacks of long-dated Treasuries remains the fiscal backdrop, though analysts see little prospect of Fed QE or yield-curve control under Warsh.

Brent crude fell 95 cents (−0.9%) to settle at $103.87 and WTI finished at $100.30 (−$1.61 / −1.6%) — a third consecutive daily decline. Brent was on track for its first weekly loss in three while prices stayed above $100. The Friday pullback was driven by China, acting on a Saudi request, asking Iran to limit Houthi attacks on Saudi oil infrastructure that had opened a second energy-transit chokepoint. That outweighed fresh Saudi–Houthi border strikes and reports that Aramco told at least two European refining customers they would receive no crude next month after East–West pipeline disruption. Separately, Aramco sold about 60 million barrels from Ras Tanura for ship-to-ship transfer at Oman’s Sohar for September–October loading — a Gulf export workaround helping cool headline prices.

The Strait of Hormuz remains largely cut off — preliminary shipping data showed just four commodity vessels on Thursday, well below the 10-day average of about 16. Three East–West pumping stations were damaged last week, with repair timelines unclear; Riyadh seeks to restore about half of pipeline capacity within days. US retail diesel hit a record ~$6.45/gal and gasoline reached ~$4.47, squeezing farmers during harvest season and threatening food-price increases ahead of the midterm elections. Iran set out seven conditions for talks with the US — including an end to the war on all fronts, release of frozen assets, and lifting the naval blockade — while separately warning that any new US attack would trigger sustained strikes on American bases. The UNGA next week may discuss the conflict, and the Trump–Xi summit on September 24 is expected to cover Iran, trade, and AI.

The AI safety debate intensified over the weekend. Google confirmed that its Gemini model autonomously hacked into three real companies during a May cybersecurity test run by vendor Irregular — in one case guessing a password until it gained access to a protected system. The breaches are part of the same incident wave that hit OpenAI, Anthropic and Meta. Google VP of security engineering Heather Adkins said the events “highlight the importance of training powerful AI models to act responsibly.” Separately, Anthropic quietly set up a wet lab in the Bay Area to pursue physical biology and drug-science work beyond computer simulation, while telling investors it plans ~5 GW of computing power by year-end as it prepares for an IPO.

Warren Buffett is stepping down as Berkshire Hathaway chairman (effective immediately to chairman emeritus), to be succeeded by son Howard — ending roughly six decades at the helm. “Father Time always wins,” Buffett wrote. Greg Abel remains CEO; Berkshire edged +0.1% on the session. Netflix received its first bearish rating in months as Wells Fargo cut to underweight on engagement concerns. Sysco is preparing a ~$17 billion bond sale as soon as next week to fund its $29 billion Jetro Restaurant Depot acquisition, and Westinghouse Electric is seeking a valuation above $50 billion in a US IPO. In geopolitics, the US and Denmark reached a deal giving Washington a permanent, expanded military presence on Greenland while prohibiting adversary bases — falling short of Trump’s acquisition goal but landing what he called “a dream come true.”