Stock Market Update

[BRIEFING.COM] Opening gains fueled by the announcement of a trade deal between the U.S. and the EU quickly pushed the S&P 500 and Nasdaq Composite to new all-time high levels, but a lack of major developments on any front stalled momentum and saw the major averages finish mixed.

At its peak, the S&P 500 set a new intraday record at 6401.07. After spending much of the afternoon with a modest loss, the index closed up 1.13 points to 6,389.77, squeaking out a new record closing high. The Nasdaq Composite, for its part, set an intraday record at 21,202.18. The closing level of 21,178.58 was also a new closing record high. The DJIA underperformed with a loss of 0.1% for the day.

The trade deal between the U.S. and EU will feature a 15% tariff on EU imports with 0% carveouts for certain products like aircraft and component parts, semiconductor equipment, and certain raw materials.

The deal also includes a provision whereby the EU will invest $600 billion in the U.S. and purchase $750 billion of U.S. energy.

The latter point, in conjunction with a 2.4% increase in crude oil prices to $66.75 per barrel, helped the energy sector (+1.0%) close as the day's top performer.

Despite a strong start, the consumer discretionary (+0.7%) and information technology (+0.8%) sectors were the only other sectors to finish in positive territory.

A strong start to the week for chipmakers underpinned the tech gains, with the PHLX Semiconductor Index closing up 1.6%, aided by the EU trade deal carveout for semiconductor equipment.

The consumer discretionary sector was bolstered by its largest components. Amazon (AMZN 232.79, +1.35, +0.6%) traded higher ahead of its earnings report on Thursday. Tesla (TSLA 325.59, +9.53, +3.0%), meanwhile, has recouped almost all of its losses from last Thursday, when the stock fell 8.2% after reporting lackluster Q2 earnings. The stock outperformed today on the back of news that Tesla struck a $16.5 billion agreement for Samsung Electronics to manufacture its AI6 chips.

The other eight S&P 500 sectors spent the majority of today's session trading with losses that steadily broadened throughout the day. Early breadth figures slightly favored advancers but selling interest picked up throughout the session. Decliners outpaced advancers by a nearly 2-to-1 ratio on the NYSE and a nearly 3-to-1 ratio on the Nasdaq.

While today's gains were limited by a lack of headlines, this week will see nearly 38% of the S&P 500 by market cap report earnings (including four “Magnificent 7” names), alongside a trove of economic data and the potential for a trade agreement between the U.S. and China. Trade delegations from the U.S. and China met for trade talks today in Stockholm, Sweden.

Separately, U.S. Treasuries began the week on a lower note, lifting the 10-yr yield back above its 50-day moving average (4.406%). Today's 2-yr note auction met decent demand, but the 5-yr note sale was a bit worse, and both auctions saw below-average foreign demand

The 2-year note yield settled up two basis points to 3.88%, and the 10-year note yield settled up three basis points to 4.42%.

• Nasdaq Composite: +9.7% YTD
• S&P 500: +8.6% YTD
• DJIA: +5.4% YTD
• S&P 400: +2.9% YTD
• Russell 2000: +1.2% YTD