Daily PA Wrap

Thursday reversed Wednesday’s hawkish-hike selloff in a single session, and the reason had nothing to do with the Fed: the S&P 500 rose 1.14% to 7,637.76 (+11.36% ytd) and the Nasdaq 100 jumped 1.73% to 29,446.98 (+16.82% ytd) as crude fell for a second straight day — WTI down 1.33% to $101.07, Brent off 1.86% to $103.86 — on reports that Saudi Arabia is rerouting exports through Oman around its damaged East-West pipeline, easing the Hormuz-war premium that had kept oil above $100 all week. The VIX cratered 12.82% to 15.44 and high-yield spreads tightened 6bp to 2.70%, yet Gold still added 0.31% to $4,400.90 and Bitcoin rose just 0.46% to $76,502.89 (-13.78% ytd) — not quite the all-clear a clean risk-on day would usually produce. The Fed’s own priced path barely moved either, still pointing to roughly 4.29% by next February.

The move had help: weekly jobless claims fell to their lowest level since mid-July, Bloomberg reported, reinforcing a labor market steady enough that prediction-market bettors have all but priced out any 2026 rate cut — a hawkish premise Thursday’s rally never actually challenged. FedEx, the freight bellwether that reports after Thursday’s close, is the next read on whether J.B. Hunt’s Wednesday diesel-cost warning was a one-off or a sector problem.

Our take: Nothing about the Fed’s own stance moved today — the priced path and the priced-out rate cuts are exactly where Wednesday left them. What reversed was tail risk: oil’s Hormuz premium receded, so equities round-tripped a selloff that was never really about growth. That makes Friday’s industrial-production data and FedEx’s freight read the actual test of whether the economy backs up what stocks just repriced.

The Wrap’s fear & greed gauge ticked up to 28.7 (“fear”) from 26.5, and the 2s10s spread and 10-year breakeven both held flat at 0.27 and 2.33% — the curve isn’t buying a growth story either way. Friday brings the G.17 industrial production print, the first hard data since Wednesday’s hike.