Warsh Hikes, Fluence’s Backlog Can’t Leave Houston

Welcome to LazyListen. This is The Daily Rip for today. Stocks slipped Wednesday as the Federal Reserve raised interest rates for the first time since last year, pushing the target range to between three point seven five and four percent.

The move was unanimous among the Fed’s twelve voting members, signaling a continued commitment to fighting inflation that remains stubbornly above the central bank’s two percent goal for over five years now. Despite the rate hike, bond yields climbed higher, with the ten-year Treasury yield moving further above the Fed’s new benchmark. This reflects market expectations that rates will stay elevated for some time, especially as energy prices remain volatile and supply constraints persist.

The Dow took the biggest hit, dropping about one point two percent, while the S&P 500 and Russell 2000 each fell roughly four-tenths of a percent. The Nasdaq managed to hold steady, buoyed by gains in technology stocks, which led the two sectors that closed in the green. Energy stocks, however, tumbled nearly three percent as crude oil prices fell more than three and a half percent, highlighting the disconnect between rate policy and oil market dynamics.

The Fed chair emphasized that monetary policy can’t directly influence oil supply, meaning energy shocks could continue to fuel inflation pressures and complicate the Fed’s path forward. B. Hunt, the major trucking and intermodal freight company, warned that rising diesel, labor, and insurance costs would weigh on its third-quarter profits.

The company said expenses related to driver hiring and bonuses could add about twenty-five million dollars to costs, alongside nearly ten million dollars more in fuel expenses and higher claims. This pushed the stock down over thirteen percent, as investors digested a profit outlook well below analyst estimates. While freight volumes are improving and higher diesel prices might shift more shipments to rail, the cost pressures are arriving faster than any benefits, signaling challenges ahead for logistics firms.

In the energy storage sector, Fluence Energy’s stock plunged after the company slashed its fiscal 2026 revenue forecast to two point four billion dollars from a previous midpoint of three billion. Its projected adjusted earnings before interest, taxes, depreciation, and amortization loss widened dramatically from ten million to two hundred million dollars. The culprit isn’t demand but production delays at its contract manufacturer in Houston, which have pushed back the ramp-up of its battery storage systems and software.

Despite efforts to boost daily output and restructure supply chain planning, investors remain skeptical given repeated backlog issues. Fluence aims for neutral to positive operating cash flow by fiscal 2027 without raising outside capital, but the larger loss forecast makes that goal tougher to believe. On the biotech front, Ocugen started dosing patients in its global Phase 3 trial for OCU410, a gene therapy targeting geographic atrophy secondary to dry age-related macular degeneration.

This one-time subretinal treatment aims to address multiple disease pathways, potentially reducing the need for ongoing eye injections required by current therapies. The therapy recently received a special FDA designation that could speed its review and approval process, with a biologics license application expected by 2028. Early Phase 2 data showed promising reductions in lesion growth without serious side effects.

Looking at the broader macro picture, Fed Chair Kevin Warsh made it clear that inflation remains too high and persistent, justifying the rate increase and suggesting more hikes could come this year. The Fed’s median projection now expects the funds rate to reach about four point one percent by year-end, with most officials anticipating at least one more increase. This marks a shift from June’s outlook, reflecting worsening inflation data over the summer.

The Fed’s independence was underscored as Warsh noted that while monetary policy can’t fix energy supply issues, it can help prevent energy shocks from spilling into wages and broader prices. The market reaction was mixed, with regional banks and homebuilders caught in the squeeze between higher financing costs and a Fed that’s not done tightening. Borrowers face immediate impacts through costlier credit cards, auto loans, and mortgages, while energy price volatility continues to pressure inflation expectations.

The White House expressed disappointment with the Fed’s decision, highlighting the political tension around rate hikes amid economic uncertainty. In sector news, optical networking saw a boost as Lumentum jumped nearly ten percent following Ciena’s forecast of about thirty percent annual revenue growth through 2029, along with strong margin targets. Meanwhile, First Solar dropped over five percent after withdrawing a patent complaint at the International Trade Commission but continuing related lawsuits in federal court.

Goldman Sachs flagged a softer fixed-income trading quarter compared to equities and warned of rising noncompensation expenses, which weighed on its shares. Looking ahead to tomorrow, keep an eye on key economic data including weekly jobless claims, building permits, housing starts, and the GDPNow estimate—all released early in the morning. Earnings reports to watch include Kandi Technologies, VinFast Auto, and Yiren Digital before the market opens, and Ads-Tec Energy after the close.

These data points and earnings will provide fresh clues on the economy’s health and corporate resilience amid ongoing inflation and rate pressures. Thanks for listening. Catch you next time on LazyListen.