Stock Market Update

[BRIEFING.COM] The S&P 500 (+1.6%), Nasdaq Composite (+2.2%), and DJIA (+1.3%) recovered roughly half of Friday's losses as the market staged a broad-based advance amid easing trade tensions between the U.S. and China.

The rebound was fueled by remarks from President Trump, who sought to calm concerns after previously threatening a 100% tariff rate on Chinese imports in response to tightened rare earth export controls, saying on Truth Social, "Don't worry about China, it will all be fine!" Treasury Secretary Scott Bessent added to the optimism, telling Fox Business that the U.S. and China were in contact over the weekend and that he still expects President Trump to meet with Chinese President Xi in the near future.

The improvement in sentiment lifted smaller-cap indices as well, with the Russell 2000 (+2.8%) and S&P Mid Cap 400 (+2.0%) outperforming as the market released its defensive posture from Friday. 

Nine S&P 500 sectors finished in positive territory, with some of Friday's laggards driving the index-level advance today. 

The information technology sector (+2.5%) led the way, supported by strength in its chipmaker names that pushed the PHLX Semiconductor Index to a 4.9% gain. 

Broadcom (AVGO 356.70, +32.07, +9.88%) benefitted from what was arguably the most notable stock-specific headline today, trading sharply higher after announcing the company will collaborate with OpenAI on 10 gigawatts of custom AI accelerators. 

NVIDIA (NVDA 188.31, +5.15, +2.81%) also captured a solid gain after announcing that Meta Platforms (META 715.70, +10.40, +1.47%) and Oracle (ORCL 308.01, +15.05, +5.14%) will use NVIDIA Spectrum-X Ethernet networking switches to boost their AI data center networks, though the announcement weighed on Arista Networks (ANET 147.45, -6.65, -4.32%).

Strength across mega-cap names also pushed the consumer discretionary (+2.3%) and communication services (+1.8%) sectors higher, with Tesla (TSLA 435.90, +22.41, +5.42%) leading the "magnificent seven" group. The Vanguard Mega Cap Growth ETF gained 1.9% today, helping the market-weighted S&P 500 (+1.6%) outperform the S&P 500 Equal Weighted Index (+1.0%). 

While the financials sector (+0.9%) finished in the middle of the pack today, several major banking names, such as Goldman Sachs (GS 786.78, +22.42, +2.93%), JPMorgan Chase (JPM 307.97, +7.08, +2.35%), and Citigroup (C 96.10, +2.17, +2.31%), traded higher ahead of their earnings reports tomorrow morning, which will serve as an early barometer of Q3 earnings strength. 

Other strong performances today came from retail names that rely on Chinese imports, such as Best Buy (BBY 77.46, +7.02, +9.97%), Burlington Stores (BURL 276.23, +21.71, +8.53%), and Ross Stores (ROST 154.77, +7.06, +4.78%).

Quantum computing names surged today after IonQ (IONQ 82.11, +11.46, +16.22%) soared to new record highs after announcing a significant advancement in quantum chemistry simulations this morning.  The industry also benefitted from JPMorgan Chase's announcement that the company will make significant investments in companies that it deems crucial to U.S. interests, including quantum computing names. 

Weakness was limited to the consumer staples sector (-0.4%), which traded higher during Friday's retreat, and the health care sector (-0.1%), which faced an outsized loss in its largest component, Eli Lilly (LLY 819.11, -14.38, -1.73%). 

Elsewhere, Fastenal (FAST 42.33, -3.45, -7.54%) was the worst-performing S&P 500 name today after missing EPS expectations by $0.01. 

Today's advance was a near mirror image of Friday's retreat, with gains spanning nearly every corner of the market while small-cap, mega-cap, and semiconductor stocks led the way. The rally was driven by optimism following President Trump's comments assuring a resolution to rising trade tensions with China, but with no economic data releases and the bond market closed for the Columbus Day holiday, there was little to divert attention from the rebound.

With the ongoing government shutdown expected to delay key data releases for the foreseeable future, tomorrow's round of big bank earnings reports will serve as an important early gauge of market sentiment and direction. 

• Nasdaq Composite: +17.5% YTD
• S&P 500: +13.1% YTD
• Russell 2000: +10.4% YTD
• DJIA: +8.3% YTD
• S&P Mid Cap 400: +3.3% YTD