Stock Market Update

[BRIEFING.COM] Stocks ended a tough week on a lower note, as rising oil prices and Treasury yields continued to exert broad pressure on the market. The S&P 500 (-1.5%), Nasdaq Composite (-2.0%), and DJIA (-1.0%) finished the week lower across the board, plunging further beneath their 200-day moving averages. The S&P 500 just narrowly avoided closing below the 6,500 mark (6,506), which would have been the first close below that level since early September.

Today's pressure was more or less a continuation of the factors that have pressured the market over the past several weeks. Oil climbed back above the $98 per barrel mark, with crude oil futures settling today's session $2.41 higher (+2.5%) at $98.12 per barrel. Stocks bounced off of session lows late in yesterday's session after Israeli Prime Minister Benjamin Netanyahu told reporters that the war in Iran would be over sooner than expected, but today's developments saw that optimism fade. 

Stocks moved off of their opening highs this morning after The Wall Street Journal reported that the Pentagon is sending three warships and thousands of additional troops to the Middle East. CBS News reported later in the afternoon that the Pentagon has made plans to use ground forces inside of Iran. 

Concerns that the conflict will last longer than expected and continue to disrupt oil markets are weighing on inflation expectations and, in turn, the market’s rate cut expectations. The CME FedWatch Tool now assigns a roughly 25% probability to a rate hike at the December FOMC meeting. 

While stocks opened mixed today, nearly every corner of the market suffered losses, with some notable retreats in the mix. 

The utilities sector (-4.1%) faced the widest loss, with several electric utilities companies such as Vistra Corp. (VST 146.20, -21.17, -12.65%) and Constellation Energy (CEG 281.99, -34.48, -10.90%) facing double-digit losses. 

The real estate sector (-3.2%) also shed several percentage points today, which coincided with another sharp move higher in Treasury yields (the 10-year note yield settled up 11 basis points to 4.39%). 

Meanwhile, the information technology (-2.2%), consumer discretionary (-1.9%), and communication services (-1.5%) sectors faced pressure across their mega-cap components, with the Vanguard Mega Cap Growth ETF finishing 1.8% lower. 

Elsewhere in the technology sector, Super Micro Computer (SMCI 20.53, -10.26, -33.32%) plummeted today after CNBC reported that a few employees were charged with smuggling chips into China.

Even the energy sector logged a flat finish, giving back its earlier gains throughout the afternoon. 

Only the financials sector (+0.2%) escaped with a gain. Major banking names traded mostly higher, offsetting renewed weakness across asset managers. Insurance names such as Marsh McLennan (MRSH 176.48, +5.57, +3.26%) and Aon (AON 325.63, +8.64, +2.73%) outperformed. 

Outside of the S&P 500, the Russell 2000 (-2.3%) and S&P Mid Cap 400 (-2.2%) lagged as risk sentiment took another step back today. 

All told, this week's price action reflects a market increasingly weighed down by the combined pressures of rising oil prices, higher Treasury yields, and escalating geopolitical tensions. With the major averages breaking below key technical levels, sentiment has deteriorated as investors reassess the outlook for inflation and monetary policy.

U.S. Treasuries faced more pressure on Friday, making for a continuation of a three-week selling streak that has been spurred by inflationary concerns stemming from the sharp rise in the price of oil and uncertain maritime security in the Persian Gulf's shipping lanes. The 2-year note yield settled up six basis points to 3.89% (+16 basis points this week), and the 10-year note yield settled up 11 basis points to 4.39% (+10 basis points this week). 

There was no economic data of note today.

• S&P Mid Cap 400: -0.3% YTD
• Russell 2000: -1.8% YTD
• S&P 500: -5.0% YTD
• DJIA: -5.2% YTD
• Nasdaq Composite: -6.9% YTD

[BRIEFING.COM] The major averages continue to chart session lows with just half an hour left in the session. 

Crude oil futures settled today's session $2.41 higher (+2.5%) at $98.12 per barrel. CBS News reported that the Pentagon is making preparations for the use of ground forces inside of Iran. 

[BRIEFING.COM] The S&P 500 (-1.6%), Nasdaq Composite (-2.1%), and DJIA (-1.1%) are charting session lows as the market enters the final hour of this week's action. 

Losses have widened across most sectors, with the top-weighted information technology sector (-2.1%) now trading in negative week-to-date territory. 

Semiconductor names are under pressure this week, with the PHLX Semiconductor Index down 3.2% today. Memory storage stocks such as Sandisk (SNDK 709.03, -63.06, -8.17%) and Western Digital (WDC 294.97, -21.96, -6.93%) have given up roughly half of this week's gains today, while Micron (MU 421.96, -22.31, -5.02%) sees an extension of its post-earnings slide. 

[BRIEFING.COM] The S&P 500 (-1.36%) is in second place on Friday afternoon, down about 90 points.

Briefly, S&P 500 constituents Vistra Corp. (VST 150.96, -16.18, -9.68%), Sandisk (SNDK 706.46, -65.63, -8.50%), and Mosaic (MOS 24.13, -2.07, -7.90%) dot the bottom of the average. For its part, MOS falls after being downgraded by BofA Securities and Freedom Capital this morning.

Meanwhile, Dell (DELL 163.22, +6.46, +4.12%) holds firm atop the average as shares of Super Micro Computer (SMCI 21.27, -9.52, -30.92%) plunge on export-control charges, driving expectations that customers may shift server demand toward competitors like Dell and Hewlett Packard Enterprise (HPE 21.72, -0.40, -1.81%).

[BRIEFING.COM] The Nasdaq Composite (-1.52%) is in last place on Friday afternoon, down about 335 points.

Gold futures settled $30.80 lower (-0.7%) at $4,574.90/oz, down about -9.6% on the week, owing to a stronger U.S. dollar and rising Treasury yields, driven by elevated inflation concerns and a "higher-for-longer" Fed outlook, continued to pressure prices. Despite ongoing geopolitical tensions, investor outflows and a shift toward cash and dollar assets have outweighed safe-haven demand, leaving gold sharply lower on the week.

Meanwhile, the U.S. Dollar Index adds about +0.4% to $99.57.