Stock Market Update

[BRIEFING.COM] Today's session started with mixed action, yet ended on a positive note thanks to an influx of buying in the afternoon. Blue-chip companies led the charge, showing strength through the entire session while mega cap stocks weighed down the S&P 500 (+0.5%) and Nasdaq Composite (+0.2%) in the early going. 

The afternoon surge led the S&P 500 to a fresh record high, powered by turnaround action in names like NVIDIA (NVDA 147.22, +0.15, +0.1%), Amazon.com (AMZN 235.42, +0.41, +0.2%), and Microsoft (MSFT 446.71, +0.51, +0.1%).

The Dow Jones Industrial Average outperformed its peers, trading higher through most of the session. Goldman Sachs (GS 639.50, +6.77, +1.1%), UnitedHealth (UNH 529.77, +10.05, +1.9%), and Caterpillar (CAT 406.40, +8.79, +2.2%) drove gains in the price-weighted index.

Other blue-chip names like GE Aerospace (GE 200.80, +12.44, +6.6%) and Union Pacific (UNP 248.05, +12.25, +5.2%) surged after encouraging earnings results and guidance, boosting the S&P 500 industrial sector (+1.0%).

Calm action in Treasuries also supported the afternoon pop. The 10-yr yield settled four basis points higher at 4.64% (after hitting 4.80% last week) and the 2-yr yield settled two basis points lower at 4.28%.

The market was also digesting the latest weekly jobless claims report, which showed a larger than expected increase in initial claims and the highest level for continuing claims since November 2021, as well as comments from President Trump who spoke to the World Economic Forum in Davos. In his remarks, the president said he will press OPEC and Saudi Arabia to lower oil prices, that he expects NATO countries to boost their defense spending to 5% of GDP, and he made it known that foreign companies producing products in the U.S. could enjoy a lower tax rate (or tariffs if they don't).

Notably, the president also indicated that he is going to demand lower interest rates. CNBC, citing a Reuters report, added that Mr. Trump is considering talking to the Fed and that he expects the Fed to listen to him when it comes to interest rates.

• S&P Midcap 400: +5.1% YTD
• Dow Jones Industrial Average: +4.8% YTD
• S&P 500: +4.0% YTD
• Nasdaq Composite: +3.9% YTD
• Russell 2000: +3.8% YTD

Reviewing today's economic data:

• Weekly Initial Claims 223K (Briefing.com consensus 219K); Prior 217K, Weekly Continuing Claims 1.899 mln; Prior was revised to 1.853 mln from 1.859 mln
  • The key takeaway from the report is the elevated level of continuing jobless claims, which connotes some increasing challenges in finding new employment after being laid off.
• Weekly EIA Crude Oil Inventories showed a draw of 1.02 million barrels; prior showed draw of 1.96 million
• Weekly EIA Natural Gas Inventories showed a draw of 223 bcf vs a draw of 258 bcf last week

Friday's economic lineup features: 

• 9:45 ET: Flash January S&P Global U.S. Manufacturing PMI (prior 49.4) and flash January S&P Global U.S. Services PMI (prior 56.8)
• 10:00 ET: December Existing Home Sales (Briefing.com consensus 4.21 mln; prior 4.15 mln) and final January University of Michigan Consumer Sentiment (Briefing.com consensus 73.0; prior 74.0)