Stock Market Update

[BRIEFING.COM] Stocks advanced to start the week as renewed buying interest in mega-cap names lifted the major averages, while solid breadth reinforced broader market participation.

The S&P 500 (+1.5%), Nasdaq Composite (+2.3%), and DJIA (+0.8%) all captured gains that put the major averages within striking distance of their unchanged month-to-date levels. 

Equity futures pointed to a higher open this morning after the Senate passed a procedural vote on Sunday to end the government shutdown. CBS News reported this afternoon that Senate Majority Leader John Thune hopes for a final Senate vote on the government funding deal "in the very near future" but noted the Senate still has procedural hurdles to overcome. 

The extent to which optimism for a funding deal contributed to today's advance can be debated, but what is certain is that there was strong buying interest across the market's largest names. 

The Vanguard Mega-Cap Growth ETF climbed 2.5% as gains swelled throughout the session, which kept the information technology (+2.7%) and communication services (+2.5%) sectors jockeying for position atop today's leaderboard. 

Renewed confidence in the AI trade saw the PHLX Semiconductor Index (+3.0%) capture a solid gain, supported by strong efforts from Micron (MU 253.20, +15.28, +6.42%), NVIDIA (NVDA 199.00, +10.85, +5.77%), and others. Advanced Micro Devices (AMD 244.18, +10.64, +4.56%) traded higher ahead of its financial analyst event tomorrow. 

Though not a member of the SOX Index, Palantir Technologies (PLTR 193.63, +15.70, +8.82%) is synonymous with the broader AI trade and captured the widest gain among S&P 500 names today, which saw the stock rally back above its 50-day moving average (178.45). 

Alphabet (GOOG 290.57, +10.87, +3.89%) also continued its recent trend of outperformance since announcing it will make its powerful Ironwood AI chip widely available in the coming weeks.  

The consumer discretionary sector did not capture quite as high of a gain as other mega-cap heavy sectors, though Tesla (TSLA 445.26, +15.74, +3.66%) was still a standout. 

In total, eight S&P 500 sectors finished higher. Several sectors moved lower in the late morning, which briefly sent the DJIA (+0.8%) beneath its flatline, though the major averages quickly rebounded from session lows.

Only the defensive consumer staples (-0.3%) and utilities (-0.1%) sectors, along with the real estate sector (-0.1%), finished lower as investors rotated back into more growth-oriented pockets of the market. 

Today's trend of a higher risk appetite was evidenced by a 1.6% gain in the Invesco S&P 500 High Beta ETF. 

However, the market's advance was not solely driven by its titans today. Advancers outpaced decliners by a roughly 2-to-1 ratio on both the NYSE and Nasdaq nearly the entire session, and of the eight S&P 500 sectors that finished higher, seven closed with gains wider than 0.5%. 

Outside of the S&P 500, the Russell 2000 (+1.1%) and S&P Mid Cap 400 (+0.8%) also posted solid performances. 

While the market will likely see any further developments to end the government shutdown as another tailwind heading into the end of the year, today's action came on relatively little news flow, reflecting confidence in the broader market and a willingness to still buy dips in mega-cap names. 

U.S. Treasuries started the week on a lower note, pressured by signs that the government shutdown will come to an end soon, though an intraday resilient showing helped the complex recover some of its starting losses. The 2-year note yield settled up three basis points to 3.59% and the 10-year note yield settled up two basis points to 4.11%. 

• Nasdaq Composite: +21.8% YTD
• S&P 500: +16.2% YTD
• DJIA: +11.3% YTD
• Russell 2000: +10.1% YTD