Stock Market Update

[BRIEFING.COM] The Dow Jones Industrial Average jumped more than 200 points, settling at a fresh record high, and the S&P 500 rose 0.1%, closing 0.6% below its all-time high. The Nasdaq Composite, meanwhile, registered a 0.5% decline.

Mega cap names and semiconductor shares, which outperformed last week, trailed the broader market and clipped the Nasdaq's performance. Apple (AAPL 216.32, -6.18, -2.8%) was a standout amid speculation that iPhone16 Pro demand has been weaker than expected. NVIDIA (NVDA 116.78, -2.32, -2.0%), Amazon.com (AMZN 184.89, -1.60, -0.9%), and Broadcom (AVGO 164.02, -3.67, -2.2%) were also among the influential decliners. 

The S&P 500 information technology sector (-1.0%) had a weak showing due losses in the aforementioned names. Consumer discretionary was the only other sector to log a decline, settling 0.3% lower. 

Broad buying activity elsewhere left nine sectors higher than Friday. The financial sector, which comprises 13.0% of the index, was the top performer with a 1.22% gain. The energy sector was the next best performer, jumping 1.2% amid rising oil prices. WTI crude oil futures settled 2.2%, or $1.54, higher at $70.22/mmbtu.

The Invesco S&P 500 Equal Weight ETF (RSP) closed 0.7% higher and advancers had a 2-to-1 lead over decliners at the NYSE.

Increased expectations of a 50 basis points rate cut at this week's FOMC meeting supported the underlying positive bias in equities through the session. This view followed a weekend article from The Wall Street Journal's Greg Ip arguing for a larger cut and a Bloomberg column penned by former FOMC Vice Chair Dudley calling for a 50 basis points decrease to the fed funds rate. 

The fed funds futures market now sees a 65.0% probability of a 50 basis points cut on Wednesday, up from 50.0% yesterday and 30.0% one week ago, according to the CME FedWatch Tool. The Treasury market and US dollar also reacted to this development.

The 10-yr yield settled three basis points lower at 3.62% and the 2-yr yield settled two basis points lower at 3.56%. The U.S. Dollar Index fell 0.4% to 100.76.

• S&P 500: +18.1% YTD
• Nasdaq Composite: +17.2% YTD
• Dow Jones Industrial Average: +10.4% YTD
• S&P Midcap 400: +9.8% YTD
• Russell 2000: +8.0% YTD

Reviewing today's economic data:

• September NY Fed Empire State Manufacturing 11.5 (Briefing.com consensus -4.1); Prior -4.7

Looking ahead to Tuesday, market participants receive the August Retail Sales report at 8:30 ET. Other data include:

• 9:15 ET: August Industrial Production (Briefing.com consensus 0.1%; prior -0.6%) and Capacity Utilization (Briefing.com consensus 77.9%; prior 77.8%)
• 10:00 ET: July Business Inventories (Briefing.com consensus 0.4%; prior 0.3%) and September NAHB Housing Market Index (Briefing.com consensus 41; prior 39)