Stock Market Update

[BRIEFING.COM] Yesterday's large losses are no more. They have been made up in their entirety, and then some, in today's session, which has been governed by a tactical rally effort that has been exacerbated by short-covering activity. There was a sense, too, that sentiment had gotten overly bearish, which fostered some contrarian-minded buying interest.

Those elements got the market started on a higher note, yet the tipping point for reclaiming all of yesterday's losses was a Bloomberg report that Treasury Secretary Bessent said the China situation is unsustainable and that he expects the tariff issues to de-escalate.

Market participants clearly like that thinking, although negotiations haven't even started. Nonetheless, the tone matters even if there is no context at this juncture.

The Vanguard Mega-Cap Growth ETF (MGK) is up 3.1%. All 11 S&P 500 sectors are higher.

The S&P 500 consumer discretionary sector (+4.0%), which is being led by Tesla (TSLA 240.51, +13.01, +5.7%) ahead of its earnings report after today's close, is the biggest winner. There are no real losers today outside of individual stocks like Northrop Grumman (NOC 459.10, -72.23, -13.6%), which disappointed investors with lowered full-year earnings guidance.

Today's gains are so broad-based that weakness today is being discussed in terms of which sectors are up the least. That would be the health care (+1.7%), industrials (+1.8%), and consumer staples (+1.8%) sectors, which aren't truly weak at all.

The trading bias underpinning today's rally is evident in an advance-decline line that favors advancers by a nearly 12-to-1 margin at the NYSE and by a better than 5-to-1 margin at the Nasdaq.

Furthermore, it can also be seen in the U.S. Dollar Index (+0.5% to 98.74) and the dip in the 10-yr note yield to 4.38% from yesterday's settlement of 4.41%. In brief, the "sell America" trade that permeated Monday's session has been supplanted with a "buy America" trade so far today.