Stock Market Update

[BRIEFING.COM] The S&P 500 (+1.3%), Nasdaq Composite (+1.1%), and DJIA (+1.4%) sit near session highs as a boost to December rate cut odds and some buy-the-dip interest from yesterday's lows have culminated in a broad-based advance. 

Equity futures pointed to a mixed open this morning, though they rose sharply after New York Fed President John Williams (voting FOMC member) said, "I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral."

The comments boosted the CME FedWatch tool's probability of a 25-basis point rate cut to nearly 75% after hovering near 40% before the commentary. Boston Fed President Collins (also an FOMC voter) told CNBC that she thinks a mildly restrictive policy stance is appropriate right now, though her remarks did little to change the market's expectations. The CME FedWatch tool currently assigns a 69.5% probability to a December rate cut, up from 39.1% yesterday. 

The major averages opened modestly higher, but losses soon began to mount in the information technology sector (+0.5%). The sector was down as much as 1.5% and spent time as the only S&P 500 sector in negative territory. With the broader market posting solid gains, all signs pointed to a rotational trade in play. 

The sector hovered at session lows late in the morning before eventually turning positive just before midday, sending the S&P 500 and Nasdaq Composite firmly above their baselines after a mostly lower morning. 

All eleven S&P 500 sectors now trade in positive territory, with seven holding gains wider than 1.0%. 

The health care sector (+2.7%) leads the pack, continuing an impressive run that seats it with a 7.8% month-to-date gain. 

The materials sector (+2.6%) is not far behind, as all of its components trade higher. 

Meanwhile, the consumer discretionary sector (+2.1%) also holds a gain wider than 2.0%. Ross Stores (ROST 172.70, +12.20, +7.60%) holds the best gain among S&P 500 names after a solid beat and raise earnings report, while homebuilders such as D.R. Horton (DHI 147.53, +10.21, +7.44%) and Lennar (LEN 123.58, +7.34, +6.31%) push the iShares U.S. Home Construction ETF 5.7% higher. 

Outside of the S&P 500, the Russell 2000 (+2.9%) and S&P Mid Cap 400 (+2.6%) also outperform amid reinvigorated expectations for further Fed easing. 

So far, the market has embarked on a solid rebound effort from yesterday's lows, with a revitalization of December rate cut odds providing a tangible tailwind. If the market can hold its gains, today's action could signal the start of a turnaround from an otherwise tumultuous week, though it is worth noting that the major averages also logged solid gains yesterday before a sharp reversal set in.

Reviewing today's data:

• The final University of Michigan Consumer Sentiment reading for November increased to 51.0 (Briefing.com consensus: 50.3) from the preliminary reading of 50.3 and the final reading of 53.6 for October. In the same period a year ago, the index stood at 71.8.
  • The key takeaway from the report is that consumer sentiment continues to be adversely impacted by the persistence of high prices and weakening incomes.
• The preliminary November S&P Global U.S. Services PMI registered at 55.0, from a prior level of 54.8.
• The preliminary November S&P Global U.S. Manufacturing PMI registered at 51.9, from a prior level of 52.5.