Stock Market Update

[BRIEFING.COM] The stock market had a positive disposition through most of the session. The S&P 500 (flat) and Nasdaq Composite (-0.2%) closed near their lows of the day, though, following a sharp move lower in the afternoon. This price action coincided with NVIDIA (NVDA 117.59, -8.02, -6.4%) extending its post-earnings decline, along with other mega cap names giving back initial gains.

The "rest" of the market also pulled back from early highs, but maintained an overall positive bias. This was the case through the entire session despite the move in NVIDIA shares, which reported above-consensus earnings and guidance, but didn't live up to ultra-high expectations. NVIDIA was sliding under normal consolidation interest after a stellar year so far. Shares are still 137% higher this year including today's decline.

The Vanguard Mega Cap Growth ETF (MGK) settled 0.3% lower and the PHLX Semiconductor Index (SOX) logged a 0.6% decline.

Buying activity elsewhere provided offsetting support. The equal-weighted S&P 500 still logged a 0.4% gain. Advancers led decliners by a 2-to-1 margin at the NYSE and by a 3-to-2 margin at the Nasdaq. Upside moves led the Dow Jones Industrial Average to a fresh record despite a loss in Salesforce (CRM 257.01, -1.89, -0.7%), which initially traded higher in response to its earnings report.

Other names that reported earnings garnered positive responses, contributing to the upside bias. CrowdStrike (CRWD 271.67, +7.47, +2.8%), Affirm Holdings (AFRM 41.66, +10.08, +31.9%), and Best Buy (BBY 100.18, +12.39, +14.1%) were standouts in that respect. 

Today's pleasing economic releases didn't upend the soft landing narrative, acted as additional support. Jobless claims remain steady, below recession-like levels, and Q2 GDP was revised up.

The 10-yr note yield settled three basis points higher at 3.87% and the 2-yr note yield settled two basis points higher at 3.89%. On a related note, today's $44 billion 7-yr note sale met soft demand.

• S&P 500: +17.2% YTD
• Nasdaq Composite: +16.7% YTD
• S&P Midcap 400: +10.3% YTD
• Dow Jones Industrial Average: +9.7% YTD
• Russell 2000: +8.7% YTD

Reviewing today's economic data:

• July Adv. Intl. Trade in Goods -$102.7 bln; Prior was revised to -$96.6 bln from -96.8 bln
• July Adv. Retail Inventories 0.8%; Prior was revised to 0.9% from 0.7%
• July Adv. Wholesale Inventories 0.3%; Prior was revised to 0.1% from 0.2%
• Weekly Initial Claims 231K; Prior was revised to 233K from 232K, Weekly Continuing Claims 1.868 mln; Prior was revised to 1.855 mln from 1.863 mln
  • The key takeaway from the report is the steady standing of initial jobless claims, which remain well below levels typically associated with an economy in recession.
• Q2 GDP-Second Estimate 3.0%; Prior 2.8%, Q2 GDP Deflator - Second Estimate 2.5%; Prior 2.3%
  • The key takeaway from the report is that consumer spending (+2.9%) was solid in the second quarter, exceeding the prior eight quarter average of 2.2%.
• July Pending Home Sales -5.5% (Briefing.com consensus 1.2%); Prior 4.8%

Friday's economic calendar features the Fed's preferred inflation gauge in the form of the PCE Price Indexes. Other data include the final reading for the August University of Michigan Consumer Sentiment survey.