Stock Market Update

[BRIEFING.COM] The stock market closed a choppy week with a strong rally. The Dow Jones Industrial Average (+1.0%) and S&P 500 (+0.6%) closed at all-time highs, which had the S&P 500 above 5,800 for the first time and left the DJIA more than 400 points higher. The Nasdaq Composite logged a 0.3% gain and the Russell 2000 outperformed its peers, jumping 2.1%.

Tesla (TSLA 217.80, -20.97, -8.8%) was left out of the everything rally following a disappointing reveal of its robotaxi. Other corporate news items acted as support for the broader market, including earnings results from JPMorgan Chase (JPM 222.28, +9.44, +4.4%), Wells Fargo (WFC 60.98, +3.23, +5.6%), and BlackRock (BLK 990.48, +34.89, +3.7%).

Bank of America (BAC 41.95, +1.98, +5.0%) was another influential winner despite news that 10% owner Berkshire Hathaway's Warren Buffett sold roughly $382 million worth of BAC shares.

The price action in the aforementioned names led the S&P 500 financial sector to close at the top of the leaderboard, up 2.0% from yesterday, and led the consumer discretionary sector to close at the bottom of the pack, showing a 0.4% loss.

The rally followed this morning's economic data, which included the September Producer Price Index and preliminary consumer sentiment data from October, which led the market to believe that the Fed won't stop cutting rates. 

The Treasury market had a muted response to this morning's data. The 10-yr yield settled two basis points lower today, and nine basis points higher this week, to 4.07%. The 2-yr yield settled six basis points lower today, and one basis point higher this week, to 3.94%.

• Nasdaq Composite: +22.2% YTD
• S&P 500: +21.9% YTD
• Dow Jones Industrial Average: +13.7% YTD
• S&P Midcap 400: +13.4% YTD
• Russell 2000: +10.2% YTD

Reviewing today's economic data:

• September PPI 0.0% (Briefing.com consensus 0.1%); Prior 0.2%, September Core PPI 0.2% (Briefing.com consensus 0.2%); Prior 0.3%
  • The key takeaway from the report is that producers are still tangling with elevated prices, excluding food and energy, which means the Fed is still going to have to tangle with inflation data that will make it harder at this stage to justify aggressive rate cuts.
• October Univ. of Michigan Consumer Sentiment - Prelim 68.9 (Briefing.com consensus 70.1); Prior 79.1
  • The key takeaway from the report is that consumer sentiment picked up in September, and has been picking up as inflation pressures have moderated.

As a reminder, the bond market is closed on Monday for Columbus Day.