Stock Market Update

[BRIEFING.COM] Stocks are on the retreat today as sustained pressure across mega-cap names pushes the S&P 500 (-1.3%) and Nasdaq Composite (-2.0%) lower, while the DJIA (-1.0%) pulls back from yesterday's record highs as the broader market sees weaker participation. 

Mega-cap tech is once again under pressure today, sending the top-weighted information technology sector 2.1% lower. The sector faces pressure from NVIDIA (NVDA 186.16, -7.64, -3.94%) and other chipmaker components, which pushes the PHLX Semiconductor Index (-3.5%) into negative territory for the week with today's loss (-1.6% week-to-date). 

Cisco (CSCO 77.27, +3.31, +4.48%) is one of just a dozen or so names that trade higher in the sector, holding a solid gain after reporting Q1 (Oct) results that topped expectations and issuing upbeat guidance for Q2 (Jan) and FY26.

Any earnings-based positivity in the market from Cisco is largely offset by Walt Disney (DIS 107.00, -9.65, -8.27%), which is the worst-performing S&P 500 name after edging past Q4 EPS expectations but missing on revenue, which was down 0.5% year-over-year to $22.46 billion, marking the company's first annual revenue decline since 1Q24.

In conjunction with a sizable loss in Alphabet (GOOG 279.61, -7.82, -2.72%), the communication services sector (-1.8%) is among the day's worst performers. 

The consumer discretionary sector (-2.3%) is at the very bottom of the leaderboard, also due to weakness in its largest names. Tesla (TSLA 400.66, -29.94, -6.95%) is the worst performer among the mega-caps, slipping below its 50-day moving average (428.61). 

The Vanguard Mega Cap Growth ETF is down 1.8% today. Unsurprisingly, the S&P 500 Equal Weighted Index (-0.4%) outperforms the market-weighted S&P 500 (-1.3%), but unlike previous days this week, it too holds a loss. 

Breadth figures are notably lower than those of recent sessions, with decliners outpacing advancers by a roughly 2-to-1 ratio on the NYSE and a roughly 3-to-1 clip on the Nasdaq. 

Weaker participation in the broader market has yet to stymie gains in the health care sector (+1.0%), which sits near 52-week highs after widening its week-to-date gain to 5.6%. The majority of its components trade higher, with Merck (MRK 94.15, +2.70, +2.95%) and Amgen (AMGN 342.82, +6.54, +1.94%) helping to prevent further losses in the DJIA. 

The energy sector (+0.9%) also holds a nice gain as the price of oil increases $0.42 (+0.7%) to $58.89 per barrel. Oil slipped 4.1% yesterday after OPEC announced it now expects global oil supply to match demand in 2026, after previously forecasting a deficit. 

Meanwhile, the consumer staples sector (+0.3%) holds a more modest gain as it rounds out the three advancing S&P 500 sectors. 

On the macro front, President Trump signed a bill last night to fund the government through January 30, ending the largest federal government shutdown in U.S. history. While an end to the shutdown could certainly be taken as a tailwind for equities into year-end, the resolution is a temporary fix and has therefore not boosted the market today. 

Additionally, there are concerns over when the backlog of economic data will be released, with the White House stating yesterday that some reports, such as the October employment and October CPI reports, will never see the light of day. 

Fed commentary has also leaned hawkish this week, further dampening the market's expectations of another rate cut at the December FOMC meeting. The CME FedWatch tool currently assigns a 49.4% probability to another cut in December, down from 62.9% a day ago and 95.5% a month ago. 

U.S. Treasuries are also under pressure today, giving back some of their gains from yesterday. The 2-year note yield is up one basis point to 3.58%, and the 10-year note yield is up two basis points to 4.09%.