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The U.S. stock market wasn't overly stimulated Tuesday by China's policy stimulus measures, but it was stimulated enough to drive the S&P 500 and Dow Jones Industrial Average to record highs once again.
Sellers made a weak-handed attempt to send the market lower, but that attempt was effectively foiled when NVIDIA (NVDA) came roaring back from an opening decline that had the stock below its 50-day moving average. NVIDIA's charge was attributed to reports that CEO Jensen Huang's preplanned stock sales had been completed several months ahead of schedule, thereby removing that overhang for the stock.
No matter the catalyst, the point remains that the bears were unable to wrest control of the market from the bulls. Breadth favored advancers at the NYSE and Nasdaq, and the major indices all closed the session higher.
Today's close is clearly uncertain at this point. As for the open, it looks to be rather lackluster despite the People's Bank of China continuing its stimulus push with a 30-basis points reduction to its Medium-Term Lending Facility, Sweden's Riksbank cutting its policy rate by 25 basis points to 3.25% and hinting at a faster pace of easing in coming months, and the MBA's Mortgage Applications Index increasing 11% wk/wk behind a 20% surge in mortgage refinancing applications.
Currently, the S&P 500 futures are down two points and are trading in-line with fair value, the Nasdaq 100 futures are down 19 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 26 points and are trading in-line with fair value.
The lack of conviction can be attributed to a wait-and-see mindset. Like yesterday, participants are waiting to see if the market succumbs to selling interest after its big run or continues to squeeze higher as sidelined participants jump in on a fear-of-missing-out trade.
The market is also mindful that Micron (MU) will be reporting its quarterly results after the close, which will hold some sway over the heavily-traded semiconductor space.
Other items on today's horizon include the August New Home Sales Report (Briefing.com consensus 695K; prior 739K) at 10:00 a.m. ET and the $70 billion 5-yr note auction results at 1:00 p.m. ET.
A disappointing earnings report after yesterday's close from homebuilder KB Home (KBH) has drawn some added attention on a relatively slow day for corporate news along with Morgan Stanley's downgrades of Ford (F), General Motors (GM), and Rivian (RIVN), and the news that Berkshire Hathaway (BRK.B) sold more of its Bank of America (BAC) position.
