Stock Market Update

[BRIEFING.COM] The stock market opened to broad-based gains in response to optimism around trade tensions with China, though sector strength deteriorated throughout the day, with the major averages ultimately finishing well off their session highs. 

The tech-heavy Nasdaq Composite (+0.7%) finished with the widest gains as tech and mega-cap stocks put up strong performances, while the S&P 500 (+0.4%) also captured a modest gain, and the DJIA finished flat. Meanwhile, the small-cap Russell 2000 (+1.0%) outperformed, while the S&P Mid Cap 400 (+0.1%) had a flattish performance.

All eleven S&P 500 sectors traded higher for much of the morning after Treasury Secretary Bessent suggested in a press conference that a longer trade truce could be achieved if China delays implementing its restrictions on rare earth exports.

The early gains pushed the major averages back near their record-high levels from last week, though eroding strength saw them dip beneath their flatlines in the early afternoon. 

Although the information technology sector (+0.7%) gave back around half of its early gains, its strength remained key to today's index-level advance, especially after its weakness yesterday limited growth in the major averages despite broader market strength.

The sector was supported by strength in chipmakers after chip-making equipment manufacturer ASML (ASML 1009.81, +26.63, +2.71%) reported strong bookings in its Q3 earnings report this morning. 

Advanced Micro Devices (AMD 238.60, +20.51, +9.40%) was one of the top-performing names in the S&P 500 today, and the PHLX Semiconductor Index closed with a 3.0% gain. 

The communication services sector (+1.0%) also finished higher, as, like chipmakers, several mega-cap names shook off yesterday's retreat. Alphabet (GOOG 251.71, +5.52, +2.24%) and Meta Platforms (META 717.55, +8.90, +1.26%) were among the stocks that pushed the Vanguard Mega Cap Growth ETF (+0.6%) higher, though fading strength in the market's largest names throughout the session saw the S&P 500 Equal Weighted Index (+0.2%) close just slightly lower than the market-weighted S&P 500 (+0.4%).

The real estate (+1.5%) and utilities (+1.3%) sectors continued their run of outperformance this week. 

While four S&P 500 sectors ultimately closed lower, only the materials (-0.5%) and industrials (-0.5%) sectors retreated more than 0.1%. 

The industrials sector faced pressure in its defense names after Treasury Secretary Scott Bessent suggested that the Trump administration may ask defense contractors to scale back stock buybacks in favor of increased research and development spending to support national security.

The iShares U.S. Aerospace and Defense ETF retreated 1.5%. 

On the earnings front, the market faced a busy slate of reports, and mixed reactions to several names in the financials sector (-0.1%) left the sector hovering near its flatline by the close. 

Morgan Stanley (MS 162.65, +7.31, +4.71%) and Bank of America (BAC 52.28, +2.19, +4.37%) captured solid gains in response to their earnings beats, while PNC (PNC 182.34, -7.39, -3.90%) faced pressure due to downside guidance and Progressive (PGR 226.50, -13.90, -5.78%) slipped on an earnings miss. 

Macro developments were relatively thin today, though the market remains vulnerable to volatility in response to trade tensions with China. 

The Fed's October Beige Book showed that overall economic activity was little changed from the previous period, which in turn had little effect on the major averages. 

Rate cut expectations remain high, and the government remains shut down, leaving investors focused mostly on corporate earnings and trade headlines for direction. Despite the retreat from earlier highs, the market's resilience in the face of recent pullbacks shows that risk appetite is still holding up, though the recent intraday swings suggest a more cautious tone underneath the surface.

U.S. Treasuries finished Wednesday with losses across the curve after reversing from their mostly higher start. The 2-year note yield settled up two basis points to 3.50%, and the 10-year note yield settled up two basis points to 4.05%. 

• Nasdaq Composite: +17.4% YTD
• S&P 500: + 13.4% YTD
• Russell 2000: +13.0% YTD
• DJIA: +8.7% YTD
• S&P Mid Cap 400: +4.3% YTD

Reviewing today's data:

• The Empire State Manufacturing survey rose to 10.7 in October (Briefing.com consensus -1.8) from -8.7 in September.
• The weekly MBA Mortgage Index fell 1.8% to follow last week's 4.7% decrease. The Purchase Index was down 2.7% while the Refinance Index fell 1.0%.
• The Federal Reserve's Beige Book for October showed little overall change in economic activity since the last report. Consumer spending softened a touch while demand for leisure and hospitality from foreign tourists continued weakening. Wealthier individuals continued spending on luxury travel and accommodations. Manufacturing activity varied with some contacts reporting challenges from tariffs and falling demand. Employment was little changed while prices continued climbing.

[BRIEFING.COM] The S&P 500 (+0.5%), Nasdaq Composite (+0.8%), and DJIA (+0.1%) remain seated with modest gains as the market enters the final half hour of the session. 

The broader market is poised for a mostly higher finish, with only the industrials (-0.4%), materials (-0.2%), and financials (-0.1%) holding modest losses. 

Defense stocks continue to weigh down the industrials sector after Treasury Secretary Scott Bessent suggested that the Trump administration may ask defense contractors to scale back stock buybacks in favor of increased research and development spending to support national security.

The iShares U.S. Aerospace and Defense ETF is down 1.2%.

[BRIEFING.COM] The S&P 500 (+0.5%), Nasdaq Composite (+0.7%), and DJIA (+0.1%) are trading in a steady range, hovering near the midpoint between their early highs and session lows.

A Senate bill to fund the government failed to get the 60 votes needed to pass, meaning the shutdown will persist. 

President Trump signed an executive order that will allow the military to be paid during the shutdown. 

[BRIEFING.COM] The broader market mostly held its modestly higher lines after the Fed released its October Beige Book at the bottom of the hour. The report showed that overall economic activity was little changed from the previous period, with three Districts seeing slight-to-moderate growth, five reporting no change, and four noting some softening. Consumer spending, especially on retail goods, has cooled lately, though auto sales got a lift in some areas from strong EV demand ahead of a federal tax credit expiration at the end of September.

Outlooks for growth varied by region and sector. A few Districts said sentiment had improved, with some contacts expecting stronger demand over the next 6–12 months. Others, however, still pointed to ongoing uncertainty that could drag on activity. One District flagged the potential downside from a prolonged government shutdown.

• Employment: Job levels were mostly steady in recent weeks, with softer labor demand across many regions and sectors. Several Districts noted more layoffs and attrition, citing weaker demand, economic uncertainty, and in some cases, rising investment in AI technologies.
• Wages: Pay increased modestly to moderately across most Districts, though labor and cost pressures intensified due to higher employer health insurance expenses.
• Prices: Inflation picked up again during the period, with faster input cost growth tied to higher import prices and rising costs for services like health care and tech. Tariff-related price pressures also came up, though some companies held prices steady to avoid losing customers.

Currently, the yield on the benchmark 10-yr Treasury note is up about a single basis point at 4.045%.

[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.44%) is the top performer on Wednesday afternoon, firmly off lows from the previous half hour.

Gold futures settled $38.20 higher (+0.9%) at $4,201.60/oz, as investors bet on multiple Fed rate cuts following dovish central bank comments. Safe-haven demand also strengthened amid renewed U.S./China trade tensions, political uncertainty abroad, and a weaker dollar.

Meanwhile, the U.S. Dollar Index is down about -0.2% to $98.82.