What happened?
Shares of global market infrastructure company Intercontinental Exchange (NYSE: ICE) jumped 6% in the afternoon session after the company reported third-quarter revenue and adjusted earnings per share above estimates, pulled forward the expected close of its MarketAxess acquisition. According to a company press release, Intercontinental Exchange reported third-quarter net revenue of $2.8 billion, up 15%. Adjusted diluted earnings per share was $2.02, up 18% from $1.71 and above the estimate of $1.97. Revenue was above the estimate of $2.74 billion. GAAP diluted earnings per share was $1.67, up 18%. After Hart-Scott-Rodino clearance on October 21, the company expects its acquisition of MarketAxess to close in the first quarter of 2027, ahead of the first-half 2027 timing it gave in July. The companies plan to seek approval to offer Hyperliquid-based retail perpetual futures in the United States. That business would operate separately from ICE’s institutional futures franchise.
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What is the market telling us
Intercontinental Exchange’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 3.7% on the news that Federal Reserve Governor Christopher Waller signaled support for holding interest rates steady amid emerging signs of disinflation. During a Reuters NEXT Newsmaker interview, Governor Waller stated that if the positive economic trends seen over the last few months continue in the data due over the next two weeks, he would be inclined to support holding the federal funds target rate at its current setting. Waller pointed out that the three-month annualized inflation rate as measured by the Personal Consumption Expenditures (PCE) price index has dropped from 4.76% in February to 3.05% currently, representing an encouraging downward trajectory. However, Waller warned that considerable uncertainty remains regarding how global conflicts, trade policy, and artificial intelligence will affect prices, according to Bloomberg. He cautioned that if upcoming August data shows this disinflationary progress has been fleeting, a rate hike may still be appropriate when the FOMC meets on September 15 and 16. Following Waller’s comments, market-implied odds for a September rate hike dropped to 48.4%, down 15 percentage points from the prior day, according to the CME Group’s FedWatch gauge cited by CNBC.
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