Stock Market Update

[BRIEFING.COM] The stock market expanded upon last week's momentum, sending the S&P 500 (+1.2%), Nasdaq Composite (+1.9%), and DJIA (+0.7%) to fresh record highs as mega-cap names led a broad-based advance. 

Reports emerged over the weekend that the U.S. and China agreed to a trade deal framework that will avoid an additional 100% tariff on Chinese imports, with President Trump and Chinese President Xi set to finalize the deal on Thursday, according to The Washington Post. 

Treasury Secretary Scott Bessent told CBS News that he expects the deal to include a "substantial" purchase of U.S. soybeans, a delay in rare earth export controls, and a resolution of differences regarding the TikTok deal.

The developments signal a markedly more conciliatory tone from both sides, a far cry from just a few weeks ago when President Trump described the situation as a trade war. 

Stocks moved higher in response, with sector strength improving throughout the day, ultimately seeing nine S&P 500 sectors close with gains. 

Mega-cap names drove the advance, buoying the communication services (+2.3%), information technology (+2.0%), and consumer discretionary (+1.5%) sectors to significant gains, while no other sectors captured a gain wider than 0.6%.

Alphabet (GOOG 269.93, +9.42, +3.62%), which reports its earnings Wednesday after the close, provided strong leadership for the communication services sector, notching a fresh record high. Meta Platforms (META 750.82, +12.46, +1.69%) captured a solid gain ahead of its earnings that also fall on Wednesday afternoon. 

The top-weighted information technology sector saw all of its mega-cap components finish with gains of 1.5% or wider. NVIDIA (NVDA 191.49, +5.23, +2.81%) was a top mover after Treasury Secretary Scott Bessent told CBS News that there will be no changes to U.S. export controls on chips.

The stock was unaffected by Qualcomm's (QCOM 187.68, +18.74, +11.09%) unveiling of its new AI200 and AI250 accelerator chips, marking a major push into the high-performance AI infrastructure market dominated by NVIDIA. 

Advanced Micro Devices (AMD 259.70, +6.78, +2.68%), which is another leader in the space, briefly dipped below its flat line, though it quickly rebounded after Reuters reported the company and the U.S. Department of Energy have partnered to build two supercomputers.

The PHLX Semiconductor Index finished with a 2.7% gain. 

Elsewhere, Tesla (TSLA 452.42, +18.70, +4.31%) rebounded from a 3.4% slide on Friday, providing strong leadership for the consumer discretionary sector. 

The Vanguard Mega Cap Growth ETF closed 1.9% higher, as all of the "magnificent seven" names closed at least 1.2% higher. Five of those seven companies will report earnings later this week. 

As a result, the market-weighted S&P 500 (+1.2%) considerably outperformed the S&P 500 Equal Weighted Index (+0.5%). 

Meanwhile, the consumer staples sector (-0.3%) lagged despite Keurig Dr Pepper (KDP 29.23, +2.07, +7.62%) moving higher after posting a strong Q3 earnings report and raising its FY25 outlook.

The materials sector (-0.3%) also finished in negative territory. Albemarle (ALB 96.21, -9.43, -8.93%) was the worst-performing S&P 500 name after the company announced it will sell a controlling stake in Ketjen Corporation's refining catalyst solutions business to KPS Capital Partners. 

Newmont Corporation (NEM 78.60, -4.77, -5.73%) faced pressure as gold and silver deepened their reversals from record highs, returning to levels from early October. 

Outside of the S&P 500, the small-cap Russell 2000 (+0.3%) notched record highs of its own despite a sharp reversal from its opening gains. The S&P Mid Cap 400 (+0.3%) followed a similar trajectory and captured a similar gain. 

Momentum across the mega-caps ahead of their earnings underscores their outsized influence on index-level performance. Should results top expectations, the market could be set for a continued climb into record territory, supported by improving U.S.-China trade relations and the prospect of additional policy easing beginning with Wednesday's FOMC meeting.

U.S. Treasuries began the week in mixed fashion, as the long bond recorded a slim gain after overcoming some early pressure while shorter tenors finished with slight losses. The 2-year note yield settled up two basis points to 3.50%, and the 10-year note yield settled unchanged at 4.00%. 

• Nasdaq Composite: +22.4% YTD
• S&P 500: +16.9% YTD
• Russell 2000: +13.0% YTD
• DJIA: +11.8% YTD
• S&P Mid Cap 400: +6.0% YTD