Stock Market Update

[BRIEFING.COM] Today's trade has been mixed at the index level thus far. The S&P 500 (-0.1%) and Dow Jones Industrial Average (+0.3%) trade near their prior closing levels while the Nasdaq Composite underperforms, trading 0.8% lower due to weakness in mega cap and semiconductor shares.

The PHLX Semiconductor Index shows a 2.2% decline and the Vanguard Mega Cap Growth ETF (MGK) shows a 0.7% decline. Apple (AAPL 215.61, -6.88, -3.1%) is an influential laggard on speculation that iPhone16 Pro demand has been weaker than expected.

This price action has contributed to the underperformance of the S&P 500 information technology sector (-1.3%). The only other sector trading lower is consumer discretionary (-0.5%).

Many stocks are trading higher, though. The remaining nine S&P 500 sectors show gains ranging from 0.2% to 1.0%. The Invesco S&P 500 Equal Weight ETF (RSP) sports a 0.6% gain and market breadth is positive. Advancers lead decliners by a 2-to-1 margin at the NYSE and by an 11-to-10 margin at the Nasdaq.

Market participants are rethinking rate cut expectations. The probability of a 25 basis points rate cut on Wednesday dropped to 39.0% from 50.0% yesterday and 70.0% one week ago, according to the CME FedWatch Tool. Also, the 2-yr note yield, which is most sensitive to changes in the fed funds rate, is down three basis points to 3.55%.

This recalibration follows relatively disappointing data out of China. Some weaker-than-expected retail sales, industrial production, and fixed asset investment data for August has stirred growth slowdown concerns.

Reviewing today's economic data:

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