Market Recap:

Both the S&P 500 and the Nasdaq Composite rebounded from their lows of Wednesday Sep 16th, after the FOMC raised the Fed Funds rate by 0.25% to 3.75% to 4%. The rate hike was widely expected, and not hiking would have sunk the market. The hike was bullish as I had posited in the previous newsletter, mostly reaffirming the Federal Reserve’s capabilities of fighting inflation and staying independent of the Trump administration.

The first three days of the week were bad with a 1.5% drop, as markets worried whether the Feds would completely reduce their credibility as political stooges. There was considerable agreement that inflation needed to be controlled and even the CPI from Sep 11th had indicated stubborn inflation, way above the Fed’s target of 2%. A BOFA fund manager’s survey strongly conveyed that the Feds would be remiss not to hike, and the markets heaved a collective sigh of relief when the Feds eventually did.

The BofA fund manager survey, which came out a couple of days before the FOMC meeting had three important findings that proved very influential regarding the rate hike.

1. 25% of of fund managers believed that monetary conditions were way too easy

2. 46% of fund managers saw no help from the Treasury’s bond buyback program. 29% feel that it would lead to a rise in yields instead of a drop. Just the opposite of what a buyback is supposed to accompolish.

3. 33% of respondents felt that a “disorderly” rise in bond yields was the biggest tail risk. This is higher than the 28% citing AI! The third highest tail risk at 24% was a second bout of inflation. Clearly the treasury and the Fed have their work cut out for them. No surprise that few people are buying bonds even with the 10 year above 5% and the 30-year above 5.38%.

Fund managers didn’t want to lose faith in the Federal Reserve’s capacity to keep the economy humming with sound interest rate policies; Cutting interest rates with stubborn inflation and high-budget deficits would have created a bubble. Funding buybacks without a resulting drop in yields made little sense, it eventually would have led to a disorderly rise in gilts with investors losing faith in treasuries. I believe that the Fed’s decision to step in with a 25-basis-point hike was a right decision and it has brought some stability to the bond market.

The correction for higher interest rates, inflation worries, and fears of an AI bubble maxed out at 4% to 7,508. I believe that, at least for now, “Buy The Dip” has come back strongly and in the absence of macro-economic bearish factors the markets should stay steady if not strong. Micron’s earnings on Sep 30th is now the biggest catalyst and in the run-up should provide support to semis and data center stocks - a rising tide lifting many boats.

I bought these stocks on Thursday, 09/17/2026

1. Vertiv Tech (VRT) at $247.55; the drop is an opportunity. A critical liquid cooling and power infrastructure backbone AI data centers worldwide, its backlog and hyperscaler demand remain at record highs. Next-generation GPU deployments will need higher thermal density and the oligopoly of Vertiv, Schneider Electric and Eaton ensure strong competitive advantages.
2. An initial 20% of Shark Ninja (SN) at $169.55; will accumulate more - this is market leading in appliances and doing really well in a category given up for the dead. Here is the full article on Shark Ninja.
3. 5% more of Broadcom (AVGO) $347.86 - the sell off is overdone. Broadcom is the largest custom AI accelerator provider, the second after Nvidia, with a commanding market share in ASICs. It has a massive presence in networking and data center switches. Both businesses are ramping rapidly. Broadcom’s free cash flow generation is above 40% of revenue.
4. 5% more of Shopify (SHOP) $128.28: Shopify has the second largest market share in global e-commerce after Amazon, supporting both direct-to-consumer brands and large enterprise merchants. Shopify’s biggest competitive advantages are its wide range of merchant solutions, including fulfillment, integrated payment processing, and logistics. A recent win with Meta for its “Muse” agent should also help growth, as shopping gets more agent driven.
5. An initial 20% of Palo Alto Networks (PANW) at $376.36; will accumulate more - the cybersecurity stock is always expensive, but I need to add more of this sector. Palo Alto Networks main competitive advantage is cybersecurity platformization, consolidating fragmented enterprise security point products into a cohesive single vendor, one-stop-shop, ensuring deep enterprise customer lock-in and switching costs. I believe that with agentic AI proliferation cybersecurity will remain in demand with escalating threat landscapes and higher compliance mandates.

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