Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.6%), Nasdaq Composite (-1.2%), and DJIA (-0.4%) sit just above session lows as a handful of notable earnings misses, possible escalations in the trade standoff with China, and weakness across mega-cap and tech names push the market lower. 

Widening losses in the information technology sector (-1.1%) prompted the major averages to retreat from more modest losses just before midday. 

The PHLX Semiconductor Index is down 3.0% today, with chipmakers facing pressure after Texas Instruments (TXN 168.97, -11.87, -6.56%) missed EPS expectations for the first time in two years and issued below-consensus EPS guidance for Q4. Additionally, management said the semiconductor recovery continues but at a slower pace than prior cycles, as customers remain cautious amid macro and tariff uncertainty.

The sector faced additional pressure as mega-cap names are generally weaker today, which also weighs on the consumer discretionary sector (-1.0%). Tesla (TSLA 433.07, -9.53, -2.15%) lags ahead of its earnings report after the close. Bloomberg reported this morning that the company has recalled some 2025 vehicles due to battery pack issues.

The Vanguard Mega Cap Growth ETF is down 0.9%. 

Alphabet (GOOG 252.18, +0.84, +0.33%) is one of the few mega-cap names to advance (though it is well off its session highs), moving higher after Bloomberg reported the company is in discussions with Anthropic for a cloud deal worth billions of dollars.

Elsewhere in the sector, a rare EPS miss from Netflix (NFLX 1117.31, -124.04, -9.99%) keeps the sector beneath its baseline. The company beat revenue expectations and attributed the earnings miss to a Brazilian gross tax on outbound payments. Despite the company stating that without this one-time item, it would have exceeded its Q3 operating income and margin forecast, the stock moved sharply lower and has yet to see any "buy-the-dip" interest. 

Cellular providers are also under modest pressure after AT&T (T 25.48, -0.56, -2.17%) reported Q3 EPS and revenue as just in-line before the open.

As for today's four advancing sectors, the health care sector (+1.0%) leads the way, supported by strong performances across medical specialties names after Intuitive Surgical (ISRG 526.56, +63.82, +13.79%) beat top and bottom line expectations and raised its FY25 guidance. 

The consumer staples sector (+0.9%) moves higher as a majority of its components hold gains, while the energy sector (+0.4%) benefits from a $1.43 (2.5%) increase in the price of oil to $58.68 per barrel. The real estate sector (+0.3%) holds a more modest gain. 

While the market was already on a downward course from a flattish open, it faced an additional sharp (but brief) dip after Reuters reported that the Trump administration was weighing sweeping software export curbs on China in retaliation for rare earth restrictions.

Aside from the recent China headline, macro-developments continue to be slim ahead of mega-cap earnings and the delayed release of the September Consumer Price Index on Friday. 

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -0.3%; Prior -1.8%