Stock Market Update

[BRIEFING.COM] The stock market closed on a higher note on buy-the-dip interest after a soft start to the week. The Russell 2000 gained 0.1%, the Dow Jones Industrial Average closed 0.3% higher, the S&P 500 climbed 1.0%, and the Nasdaq Composite settled 1.5% higher.

Mega caps, growth stocks, and chipmakers had an outsized impact on index gains in today's broad rally. The Vanguard Mega Cap Growth ETF (MGK) jumped 1.8%, the PHLX Semiconductor Index (SOX) settled 1.3% higher, and the Russell 3000 Growth Index closed with a 1.6% gain.

NVIDIA (NVDA 132.89, +5.17, +4.1%) was a top performer after a Bloomberg report that Hon Hai Precision is aiming to increase capacity to meet demand for artificial intelligence products. 

Calmer action in Treasuries after sharp losses of late, along with a drop in oil prices also helped boost the equity market. The 10-yr yield settled one basis higher at 4.03% and the 2-yr yield settled two basis points lower at 3.98%. On a related note, today's $58 billion 3-yr note sale met weak demand. 

WTI crude oil futures 4.5% lower at $73.70/bbl. This price action was related to fears about Hurricane Milton, along with demand concerns due to a lack of new stimulus measures out of China.

The S&P 500 energy sector was the worst performer in the index by a wide margin, dropping 2.6%. The only other sector to close lower was materials (-0.4%). Meanwhile, the information technology sector jumped 2.1%, the communication services sector logged a 1.1% gain, and the consumer discretionary sector settled 1.0% higher.

• Nasdaq Composite: +21.1% YTD
• S&P 500: +20.6% YTD
• Dow Jones Industrial Average: +11.7% YTD
• S&P Midcap 400: +11.3% YTD
• Russell 2000: +8.3% YTD

Reviewing today's economic data:

• September NFIB Small Business Optimism 91.5; Prior 91.2
• August Trade Balance -$70.4 bln (Briefing.com consensus -$71.3 bln); Prior was revised to -$78.9 bln from -$78.8 bln
  • The key takeaway from the report is that the net exports component for August will be a positive input for Q3 GDP forecasts.

Looking ahead, market participants receive the following economic data on Wednesday:

• 7:00 ET: Weekly MBA Mortgage Index (prior -1.3%)
• 10:00 ET: August Wholesale Inventories (Briefing.com consensus 0.2%; prior 0.2%)
• 10:30 ET: Weekly crude oil inventories (prior +3.89 mln)
• 14:00 ET: September FOMC Minutes