Midday market update: Energy leads as tech slips; Dow hits record

Introduction#

U.S. equities are mixed into the lunch hour on Tuesday, September 23, 2025, with a classic rotation in play. According to Monexa AI real-time tape, the S&P 500 and Nasdaq are modestly lower by midday as heavyweight technology drags, while energy shares surge on broad commodity strength and supportive headlines. The Dow Jones Industrial Average briefly set a fresh intraday record before pulling back, a sign of strong cyclicals and bank participation to start the session that faded as the morning progressed. Volatility is a touch higher, consistent with the index-level chop and sector dispersion. Macro data landed cooler, and Federal Reserve commentary continued to frame an easing cycle that’s sensitive to a softening labor backdrop.

Market Overview#

Intraday Indices Table & Commentary#

The tape shows a modest risk-off lean from the open to midday. The S&P 500 is down -0.45%, the Nasdaq Composite -0.68%, and the Dow -0.13%, while the NYSE Composite edges higher by +0.28%. According to Monexa AI, the Dow nonetheless set a new intraday high of 46,714.27 earlier in the session before easing, with banks and energy initially providing lift. The CBOE Volatility Index (VIX) is up to 16.67, above its 50-day average of 15.83 but below its 200-day average of 19.13, indicating a mild pick-up in hedging demand without a disorderly risk-off move.

Tech’s tone is the main index headwind. Monexa AI’s heatmap shows large-cap technology softness—most notably in NVDA, ORCL, and MSFT—partially offset by selective strength in semis like INTC. Conversely, energy is the clear leader and is helping to cushion broader declines.

Macro Analysis#

Economic Releases & Policy Updates#

The morning brought a mix of softer activity data and rate-policy nuance. S&P Global’s flash U.S. Composite PMI for September eased to 53.6 from 54.6 in August, signaling continued expansion but at a slower pace, per the early read reported by S&P Global and summarized on CNBC. Manufacturing was the weaker sleeve of the report, reinforcing the message from regional manufacturing surveys. The Richmond Fed’s Fifth District manufacturing index fell 10 points to -17 in September from -7 in August, indicating a deeper contraction in that region, according to the Richmond Fed.

On policy, Chair Jerome Powell reiterated that last week’s rate cut was driven in part by a cooling labor market and that policy remains “modestly restrictive,” leaving room to adjust if conditions warrant, per remarks covered by CNBC. In separate commentary, Powell said asset prices appear “fairly highly valued,” a reminder that valuation discipline remains a focus for policymakers, as reported by Bloomberg. Chicago Fed President Austan Goolsbee signaled caution about moving “too aggressive” on cuts absent continued progress on inflation and growth, in an interview with CNBC. The overall policy backdrop remains consistent with a gradual easing bias, contingent on incoming data.

The combination—a slower but still-expanding PMI and a Fed that’s easing while watching valuations—has been enough to curb morning risk appetite at the index level without breaking the ongoing leadership rotation beneath the surface.

Global/Geopolitical Developments#

Overnight and morning headlines also played into sector moves. Notably, shares of XOM are higher after reports that Exxon signed a non-binding preliminary agreement with Rosneft to explore a pathway to recoup roughly $4.6 billion tied to its 2022 exit from Russia, according to Reuters. The headline supported energy sentiment already buoyant on commodity strength, reinforcing today’s cyclical tilt.

Meanwhile, the rare backdrop of gold near record territory alongside equities near highs remains in the conversation. Multiple outlets, including Reuters and Bloomberg, have highlighted the unusual co-move, which points to a blend of liquidity, hedging demand, and growth resilience. That broader context helps explain why defensive pockets like healthcare distributors and regulated utilities are finding bids even as cyclicals and energy lead.

Sector Analysis#

Sector Performance Table#

According to Monexa AI sector data, Energy leads intraday (+2.10%), followed by modest gains in Healthcare and Real Estate. Technology (-0.42%) and Communication Services (-0.47%) weigh on the cap-weighted indices given their heavy representation, while Financial Services (-0.19%) is mixed. It is worth flagging a data nuance: Monexa AI’s stock-level heatmap shows Communication Services broadly positive, led by Paramount Skydance and advertising agencies, but the top-down sector print above is modestly negative. This discrepancy likely reflects timing and weighting effects; we prioritize the sector table for index-aligned benchmarking and use the heatmap to surface notable single-name dispersion.

Within sectors, dispersion is the dominant intraday feature:

Energy is the standout, with broad-based strength across services, E&Ps, and majors. Halliburton HAL is up a hefty +9.20%, Texas Pacific Land TPL +6.68%, Baker Hughes BKR +4.70%, and Diamondback Energy FANG +3.99%. The majors participate, with XOM +2.14%, aligning with the supportive Reuters headline flow.

Technology shows meaningful dispersion. ORCL is lower by -4.32% as investors reassess its AI narrative and digest leadership changes. NVDA is down -2.40% even after an Evercore ISI price-target lift to $225 tied to a preferred-supplier role for OpenAI’s 10 GW buildout and incremental revenue estimates into 2H26; that dichotomy underscores valuation sensitivity. Large weights such as MSFT are modestly weaker (-0.78%), while INTC rallies +4.11% on stock-specific momentum. Electronic design automation peer SNPS is -3.78%, pressuring software-for-engineering cohorts.

Communication Services leadership is visible on the heatmap despite the sector table print: Paramount Skydance PSKY jumps +11.02% on deal chatter and legal-team moves, while agency groups Omnicom OMC and Interpublic IPG gain +2.78% and +2.70%, respectively. Cable operator Charter CHTR is +2.47%, and Alphabet GOOGL is modestly positive, lending ballast to the sector tape.

Financials are mixed. Ratings and market-structure names—Moody’s MCO (-2.09%) and Nasdaq NDAQ (-1.99%)—lag, offsetting modest gains in banks and insurance. JPM is +0.32%, and retail trading platform HOOD advances +1.90% after Citigroup boosted its target to $135 and moved to Neutral.

Consumer Cyclical shows rotation away from a mega-cap e-commerce bellwether as AMZN slips -2.23%, while select retail and travel outperform: Ulta Beauty ULTA +2.01%, Williams‑Sonoma WSM ~+2.00%, Wynn Resorts WYNN +2.05%, and Royal Caribbean RCL +1.53%.

Healthcare is net positive with outsized winners in services and distributors. McKesson MCK surges +6.89%, Cencora COR +4.16%, and UnitedHealth UNH +3.07%, while research-driven names lag: Regeneron REGN -4.33% and Eli Lilly LLY -1.43%.

Industrials are roughly flat at the sector level but polarized under the hood. Generac GNRC drops -5.85%, while transportation and logistics rally: CSX CSX +3.02%, Southwest LUV +3.07%, FedEx FDX +2.22%, and Boeing BA +2.06%.

Consumer Defensive is mixed. Kenvue KVUE climbs +3.62% and Keurig Dr Pepper KDP +1.77%, while staples bellwethers ease: Procter & Gamble PG -1.31%, Walmart WMT -0.97%, and Costco COST -0.52%.

Utilities show selective defensive bid centered on regulated names: Sempra SRE +3.85%, Eversource ES +1.79%, and Exelon EXC +1.03%, offset by a sharp drop in Vistra VST (-4.64%).

Real Estate inches higher, led by healthcare and retail REITs. Welltower WELL is +1.87% and Simon Property Group SPG +1.61%. CoStar CSGP -1.30% is a drag among growth-premium names, while data-center REIT Equinix EQIX +0.50% and tower REIT American Tower AMT +0.71% continue to demonstrate digital-infrastructure resilience.

Basic Materials is flat to slightly negative, with industrial gases and coatings easing—Air Products APD -3.81% and PPG PPG -2.37%—while miners and EV materials catch a bid: Albemarle ALB +2.01%, Newmont NEM +1.80%, and Freeport‑McMoRan FCX +1.53%.

Company-Specific Insights#

Midday Earnings or Key Movers#

AutoZone AZO fell more than -3% in early trading after reporting fiscal Q4 EPS of $48.71, missing consensus, and a revenue print near $6.24 billion, with margins impacted by an $80 million non-cash LIFO charge. Same-store sales rose +5.1% in constant currency, per company disclosures aggregated by Monexa AI and financial news reports. Intraday, traders are weighing resilient comps against margin compression and higher operating expenses.

NVIDIA NVDA is lower intraday (-2.40%) even as Evercore ISI raised its price target to $225 and reiterated Outperform, citing the company’s selection as OpenAI’s preferred supplier in a 10 GW AI infrastructure build that could add roughly $5.5 billion to 2H26 revenue estimates, according to Monexa AI’s synthesis of brokerage commentary. Multiple outlets, including Bloomberg and Reuters, highlighted that OpenAI and NVIDIA outlined a partnership framework that emphasizes system-level deployments—GPUs, networking, racks, and software—over multiple years, with early phases expected to begin in 2026.

Oracle ORCL is down -4.32% midday as investors digest leadership changes to a co-CEO structure and reassess the company’s AI infrastructure positioning following recent headlines about large-scale projects, as noted across morning coverage from outlets such as Bloomberg.

Robinhood HOOD is up +1.90% after Citigroup boosted its price target to $135 and moved its rating to Neutral, citing a supportive backdrop from Fed rate cuts and robust user engagement, according to Monexa AI’s compilation of broker moves.

Onto Innovation ONTO gains after a Jefferies upgrade to Buy with a higher price target, reflecting confidence in a recovery of advanced-packaging share and a revenue bottom in early 2026, per Monexa AI’s pre-market notes.

DRDGOLD DRD advanced after H.C. Wainwright raised its price target to $30.50, citing sustained tailwinds from elevated gold prices and company-specific growth initiatives, according to Monexa AI. The bid for gold-linked equities echoes the broader narrative of gold holding near highs alongside equities, as reported by Reuters.

Exxon Mobil XOM trades higher after Reuters reported the company signed a preliminary agreement with Rosneft to explore a path to recovering a $4.6 billion charge tied to its Russia exit. The headline bolsters an already-strong energy tape.

Johnson & Johnson JNJ drew attention after an upgrade to Buy from Johnson Rice and commentary highlighting gains in Innovative Medicine and MedTech, per Monexa AI’s broker recap, although the stock-level move is less index-relevant today versus the energy-led swing.

Extended Analysis#

Intraday Shifts & Momentum#

From the opening bell through midday, the market’s tone shifted from a broad “new-highs” impulse to a more selective rotation. According to Monexa AI intraday data, the Dow’s push to a fresh intraday record at 46,714.27 coincided with strength in banks and energy, but the index later slipped into mild negative territory as tech softness weighed on the cap-weighted complex and as PMI data reminded investors that the growth pulse is moderating. The S&P 500 and Nasdaq both remain off morning highs as investors fade some of the more extended AI-adjacent moves.

The volatility complex corroborates the modest de-risking. The VIX at 16.67 is up +3.54% on the day and sits above its 50-day average (15.83) but below its 200-day (19.13), a setup that often accompanies rotational markets rather than broad liquidations. The Russell 2000 volatility gauge (RVX) is up +6.59% to 23.14, a sign that small-cap risk premia are a bit wider today, even as the NYSE Composite holds a gain. That cross-current—small-cap vol higher, New York Stock Exchange breadth not collapsing—speaks to a market rewarding idiosyncratic catalysts and penalizing single-name disappointments rather than issuing a verdict on the entire risk complex.

The AI supply chain remains the fulcrum for sentiment, but today underlines valuation sensitivity. NVDA remains the dominant node in the ecosystem; still, even constructive sell-side updates and the strategic OpenAI partnership framework were insufficient to lift the stock intraday. That tells us positioning is heavy and that incremental good news must clear a high bar. The weakness in SNPS and ORCL further underscores how quickly investors are toggling between AI beneficiaries based on evolving narratives and leadership changes. By contrast, INTC rallies on stock-specific momentum, a reminder that relative-value and catch-up trades are alive inside semis—a dynamic that helps the SOX avoid a worse drawdown on days when the most crowded AI names are offered.

Energy’s leadership is the day’s most investable trend. The breadth—services (e.g., HAL, BKR, E&Ps (e.g., FANG, and majors (XOM—suggests the rally is not a single-name headline, even if the Reuters report on Exxon added fuel. This sector strength fits the macro setup: a Fed that is easing against slowing-but-expanding activity, and a commodity complex that is responding to both supply dynamics and steady demand. If the policy path delivers lower real rates while avoiding a growth scare, cash-gushing energy balance sheets should continue to attract flows.

Healthcare’s services-and-managed-care strength is also notable in today’s mix. The outsized gains in distributors MCK and COR, and in managed care via UNH, point to investors favoring cash-flow visibility and defensiveness that still carry growth optionality. On the other side, biotech and some large-cap pharma weakness (REGN, LLY shows the market is discriminating within defensives rather than buying them wholesale.

Communication Services’ ad-agency strength—OMC and IPG—alongside a big move in PSKY, reads as a vote of confidence in cyclical ad spend and in event-driven optionality within media. The sector’s divergence from the top-down sector table highlights why investors should pair sector ETFs with stock-specific research on days like this.

Financials continue to reflect two stories. Banks (JPM and some insurers are bid on the prospect of a gentle easing path and stabilizing credit, while market-structure and ratings franchises (NDAQ, MCO ease as volumes and issuance-sensitive narratives consolidate after a strong YTD. Payments (MA also soften intraday, adding to the mixed tone within the group.

Finally, consumer-facing dispersion remains; specialty retail (ULTA, WSM and travel/leisure (WYNN, RCL outpace a mega-cap e-commerce laggard (AMZN. That tells us consumers are still spending, but leadership is rotating within discretionary baskets.

From an index-concentration standpoint, the day reinforces a simple but actionable point: when megacap tech stumbles—even modestly—the cap-weighted benchmarks struggle to hold gains. Managing that concentration risk, particularly around crowded AI exposures, remains the core portfolio construction challenge into the afternoon.

Conclusion#

Midday Recap & Afternoon Outlook#

By midday, the message is straightforward: cyclicals led by energy are doing the heavy lifting, while megacap tech fatigue caps the broader indices. Softer PMI readings, a still-accommodative but valuation-aware Fed, and a modest uptick in volatility shape the risk tone. Banks and energy powered the Dow to an intraday record before the index slipped; the S&P 500 and Nasdaq remain lower as investors fade premium AI cohorts. According to Monexa AI, breadth is not collapsing—NYSE Composite is green and small-cap volatility is elevated but contained—which argues for rotation rather than risk aversion.

Into the afternoon, attention will remain on Chair Powell’s ongoing remarks and any follow-on Fed speak for clues about the glide path of rate cuts, as well as any incremental reads on labor and inflation expectations via high-frequency data, per coverage from CNBC and the Wall Street Journal (Nick Timiraos). On the micro side, the AI infrastructure tape will continue to set the tone for growth equities, while energy’s breadth suggests dip-buyers may stay engaged there barring a commodity reversal. Finally, watch the volatility complex: VIX above its 50-day suggests more two-way trade and intraday reversals are possible; a decisive move back below 16 would favor a late-day drift higher, while a push toward the 200-day north of 19 would imply broader de-risking.

Key Takeaways#

• Energy leadership is broad and credible: services, E&Ps, and majors are all bid; HAL (+9.20%), BKR (+4.70%), FANG (+3.99%), and XOM (+2.14%) are emblematic, per Monexa AI.
• Tech dispersion matters for the indices: NVDA (-2.40%), ORCL (-4.32%), and MSFT (-0.78%) collectively weigh, while INTC (+4.11%) offers a counterpoint.
• Communication Services shows stock-led strength despite a mixed sector print: PSKY (+11.02%), OMC (+2.78%), IPG (+2.70%), and CHTR (+2.47%).
• Defensive quality within Healthcare and Utilities is being rewarded: MCK (+6.89%), COR (+4.16%), UNH (+3.07%), and SRE (+3.85%).
• Macro tone: PMI cools (S&P Global flash Composite at 53.6 vs. 54.6 prior), Richmond Fed manufacturing at -17, and Powell reiterates a cautiously easing stance with a nod to elevated valuations, per S&P Global, the Richmond Fed, CNBC, and Bloomberg.
• Volatility is higher but contained: VIX +3.54% at 16.67 (above 50-day, below 200-day), RVX +6.59% at 23.14—consistent with rotation rather than risk-off, per Monexa AI.
• Portfolio implication: manage index concentration risk tied to megacap tech; consider maintaining exposure to energy/cyclicals for momentum while using selective defensives to hedge day-to-day swings.