Stock Market Update

[BRIEFING.COM] Today's trade featured a negative bias through the entire session. The major indices were trading slightly lower for most of the day before selling picked up in the afternoon. The S&P 500 ultimately settled 1.0% lower, the Nasdaq Composite closed 1.2% below its prior close, the Dow Jones Industrial Average declined 0.9%, and the Russell 2000 settled with a 0.8% loss.

The late deterioration coincided with some mega caps and chipmakers sliding below prior closing levels. Meta Platforms (META 584.88, -11.06, -1.9%), which had been up as much as 1.2% at its best level, and Broadcom (AVGO 175.08, -1.56, -0.9%), which had been up as much as 0.9%, are among the standouts in that respect.

Apple (AAPL 221.69, -5.11, -2.3%) and Amazon.com (AMZN 180.88, -5.63, -3.0%) extended downgrade-related losses in the afternoon. AAPL shares were downgraded to Hold from Buy at Jefferies and AMZN shares were downgraded to Equal Weight from Overweight at Wells Fargo.

Some selling interest was related to profit-taking activity after the solid run of late. The major indices were near record highs and ended last week on an upbeat note following a very strong jobs report for September.

Downside action was also related to ongoing geopolitical worries around a potential escalation between Israel and Iran. This fear manifested in another jump in oil prices. WTI crude oil futures rose 3.7% to $77.18/bbl. The price action in oil was also in response to concerns about Hurricane Milton, which has intensified into a Category 5 hurricane.

The S&P 500 energy sector was boosted by the activity in oil. It was the only sector to close higher today, up 0.4% from Friday. Chevron (CVX 151.13, +0.38, +0.3%) was a winner from the sector after news that it sold interests in the Athabasca Oil Sands Project and Duvernay Shale for $6.5 billion.

The rate-sensitive utilities sector closed with the largest decline, down 2.3%. The communication services sector also fell 2.0%.

Rising market rates also contributed to the selling in equities. The 10-yr yield settled five basis points higher at 4.03% and the 2-yr yield settled seven basis points higher at 4.00%.

• Nasdaq Composite: +19.4% YTD
• S&P 500: +19.4% YTD
• Dow Jones Industrial Average: +11.3% YTD
• S&P Midcap 400: +11.3% YTD
• Russell 2000: +8.2% YTD

Reviewing today's economic data:

• Consumer credit increased by $8.9 billion in August (Briefing.com consensus $12.7 billion) after increasing a revised $26.7 billion (from $25.5 billion) in July.
  • The key takeaway from the report is that revolving credit decreased, suggesting the presence of increased caution among consumers.

Looking ahead, market participants will receive the following data tomorrow:

• 6:00 ET: September NFIB Small Business Optimism (prior 91.2)
• 8:30 ET: August Trade Balance (Briefing.com consensus -$71.3 bln; prior -$78.8 bln)