Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.6%), and DJIA (+0.1%) are holding on to modest gains, as some areas of weakness have emerged following a broadly strong start that saw all eleven S&P 500 sectors trading higher for most of the morning.

A sense of optimism surrounded the trade relationship with China after Treasury Secretary Bessent suggested in a press conference that a longer trade truce could be achieved if China delays implementing its restrictions on rare earth exports.

While the broader market advanced despite tensions with China yesterday, tech and mega-cap stocks still lagged and prevented growth at the index level. Many of those same names trade higher today, making an outsized contribution to the index-level advance. 

The information technology sector (+0.9%) has reclaimed just over half of yesterday's loss. Chipmakers in particular are displaying strength after ASML (ASML 1011.37, +28.19, +2.87%) reported strong bookings in its Q3 earnings report this morning. 

Broadcom (AVGO 353.18, +9.05, +2.63%) trades higher today after Evercore ISI raised the stock's target price to $403 from $342, and NVIDIA (NVDA 180.33, +0.30, +0.17%) was upgraded to Buy from Hold at HSBC, with a target of $320.

The PHLX Semiconductor Index is back in record territory, currently holding a 2.6% gain. 

Mega-cap strength elsewhere contributes to a 1.0% gain in the communication services sector. The Vanguard Mega Cap Growth ETF is up 0.6% after a 0.8% loss yesterday. 

After holding a solid early gain, the financials sector has retreated to its flatline as investors react to a mixed batch of earnings reports across the sector. 

Morgan Stanley (MS 164.20, +8.86, +5.70%) and Bank of America (BAC 52.19, +2.10, +4.19%) are trading higher following better-than-expected earnings results, while PNC (PNC 184.43, -5.30, -2.79%) is under pressure after issuing downside guidance, and Progressive (PGR 224.24, -16.16, -6.72%) is weaker after missing earnings estimates.

As market strength began to fade just before midday, several sectors moved into negative territory. 

The industrials sector (-0.6%) faces the widest loss, facing pressure in its defense names that pushed the iShares U.S. Aerospace and Defense ETF 1.8% lower. 

Meanwhile, the energy sector (-0.4%) retreats as the price of oil decreases, while the materials (-0.2%) and health care sectors (-0.2%) also face modest losses. 

Despite a red-hot start to the session, the major averages now hold considerably more modest gains as buying enthusiasm has cooled and profit-taking has set in, particularly in the cyclical and value-oriented areas of the market, leaving leadership once again concentrated in tech and other growth pockets.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -1.8%; Prior -4.7%
• October Empire State Manufacturing 10.7 (Briefing.com consensus -1.8); Prior -8.7