Stock Market Update

[BRIEFING.COM] Today's trade features a broad advance. The major indices trade near their intraday highs with gains ranging from 0.7% to 2.4%. Advancers lead decliners by a roughly 5-to-2 margin at both the NYSE and at the Nasdaq. 

Strength in the semiconductor space has boosted the broader market, overshadowing a decline in shares of Microsoft (MSFT 414.76, -8.20, -2.0%) after its earnings report. The PHLX Semiconductor Index (SOX) shows a 5.5% gain.

NVIDIA (NVDA 114.93, +11.20, +10.8%) and Broadcom (AVGO 157.63, +14.15, +10.0%) are top performers from the space. The strength in semiconductor shares is in response to earnings news from AMD (AMD 144.50, +6.06, +4.4%), Microsoft's robust capex budget, and talk that some foreign companies could be exempt from export restrictions to China.

This price action has also propelled the S&P 500 info tech sector, which trades 3.3% higher. The next best performing sectors are consumer discretionary (+1.8%) and industrials (+1.5%). The latter is benefitting from a sizable gain in shares of Dow component Boeing (BA 195.04, +8.17, +4.4%), which reported earnings and named Kelly Ortberg as President and CEO.

All 11 S&P 500 sectors are higher in today's broad rally and the equal-weighted S&P 500 shows a 0.9% increase.

The vibe could shift, however, following the Fed's policy decision at 2:00 ET and Fed Chair Powell's press conference at 2:30 ET. The market is not expecting a change in the fed funds rate today, but expects a signal that rate cuts are imminent. 

Treasury yields are lower in front of these events, which has acted as support for equities so far. The 10-yr note yield is down five basis points to 4.10%.

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index -3.9%; Prior -2.2%
• July ADP Employment Change 122K (Briefing.com consensus 160K); Prior was revised to 155K from 150K
• Q2 Employment Cost Index 0.9% (Briefing.com consensus 1.0%); Prior 1.2%
  • The key takeaway is that there was a year-over-year moderation in wages and salaries and benefit costs that, again, trended in the right manner to suggest the Fed might be convinced to cut rates in September.
• June Pending Home Sales 4.8% (Briefing.com consensus 1.5%); Prior was revised to -1.9% from -2.1%
• July Chicago PMI 45.3; Prior 47.4