Stock Market Update

[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (-0.3%), and DJIA (+0.5%) all captured record high levels amid broad strength this morning, though the afternoon saw weakness in mega-cap and tech names send the Nasdaq lower, preventing a clean sweep of record closing highs. 

While the major averages closed off of their session highs, seven S&P 500 sectors still managed to finish in positive territory, with four boasting gains wider than 0.5%. 

Strength was ubiquitous throughout the utilities (+1.2%) sector, as all but two of its components finished with gains today. 

The health care sector (+1.1%) cemented its position as the best-performing sector this week (+6.8% week-to-date) as managed care names continued to outperform after Humana's (HUM 283.72, +27.10, +10.56%) early release of its 2026 Medicare Advantage Star Ratings and reaffirmation of 2025 EPS guidance yesterday.

Meanwhile, the consumer discretionary (-0.8%) and communication services (-0.6%) sectors lagged the broader market due to weakness in their mega-cap components, contributing to a 0.4% loss in the Vanguard Mega Cap Growth ETF. The S&P 500 Equal Weighted Index (+0.4%) outperformed the market-weighted S&P 500 (flat). 

Strength in the broader market outweighed the underperformance of the consumer discretionary and communication services sectors for most of the session, but an afternoon retreat in the information technology sector (-0.3%) sent the S&P 500 to its flatline and the Nasdaq Composite lower. 

Palantir Technologies (PLTR 173.07, -13.98, -7.47%) was the top laggard in the S&P 500 today after a Reuters report said the U.S. Army flagged "fundamental security" flaws in a key battlefield communications program involving the company, raising concerns about its defense contracts.

NVIDIA (NVDA 187.62, -1.27, -0.67%) also saw some profit-taking after setting new record highs multiple times throughout the week. 

Outside of the S&P 500, the small-cap Russell 2000 (+0.7%) and S&P Mid Cap 400 (+0.3%) both advanced as investors sought opportunities outside of the market's largest names. 

Though the major averages finished off of their session highs, the expansion into record territory today reinforced the notion that investors were largely unfazed by the ongoing government shutdown.

Fed Vice Chair Phillip Jefferson (FOMC voting member) noted that both sides of the Fed's mandate are under pressure, and he will continue to assess the incoming economic data. That could become an increasingly difficult task given the government shutdown, as the market did not receive the September Employment Situation Report today.

Rate cut expectations through year-end still held steady, bolstered by Wednesday's weaker-than-expected ADP Payrolls Report, even as Chicago Fed President Austan Goolsbee (FOMC voting member) cautioned against frontloading cuts and Fed Governor Stephen Miran (FOMC voting member) noted that a housing shock could alter his inflation outlook.

U.S. Treasuries retreated on Friday with the belly leading the way, but the entire complex still ended up with solid gains for the week. The 2-year note yield settled up two basis points to 3.57% (-8 basis points this week) and the 10-year note yield settled up three basis points to 4.12% (-7 basis points this week).

• Nasdaq Composite: +18.0% YTD
• S&P 500: +14.2% YTD
• Russell 2000: +11.0% YTD
• DJIA: +9.9% YTD
• S&P Mid Cap 400: +5.4% YTD

Reviewing today's economic data:

• September S&P Global U.S. Services PMI - Final 54.2; Prior 53.9
• September ISM Services 50.0% (Briefing.com consensus 51.7%); Prior 52.0%
  • The key takeaway from the report is that it carries some stagflation messaging for the nation's largest business sector: no growth, contracting employment, and higher inflation.