Stock Market Update

[BRIEFING.COM] The major averages now sport slight gains as the stock market trades in a muted fashion for the second consecutive day. 

The tech-heavy Nasdaq Composite (+0.2%) leads the way, while the S&P 500 (+0.1%) trades just above its flatline, and the DJIA is unchanged.

Meanwhile, smaller-cap stocks are advancing at a greater pace today, with the Russell 2000 adding 0.8% and the S&P Mid Cap 400 tacking on 0.6%.

Mega-cap stocks are also outperforming the broader market, as shown by a 0.3% advance in the Vanguard Mega Cap Growth ETF.

Six S&P 500 sectors trade in positive territory, while five trade below their opening levels. 

The industrials sector (+0.6%) posts the widest gains, bolstered by strength in defense contractors that have the iShares U.S. Aerospace & Defense ETF (+1.6%) tracking toward a record close. CNBC reported that the Trump administration is considering taking equity stakes in defense firms.

The information technology sector (+0.4%) is one of the best-performing sectors due to relative strength in its chipmaker components, pushing the PHLX Semiconductor Index up 1.1% today. 

NVIDIA (NVDA 181.71, +1.90, +1.06%) trades higher ahead of its earnings report tomorrow afternoon, and Advanced Micro Devices (AMD 166.36, +3.00, +1.84%) trades higher following an upgrade to Buy from Hold at Truist. The company, along with IBM (IBM 241.24, +1.81, +0.76%), plans to develop next-generation computing architectures based on the combination of quantum computers and high-performance computing.

On the contrary, the energy sector (-0.9%) faces pressure from lower oil prices after four days of gains, with crude oil futures falling $1.39 (-2.2%) to $63.41 per barrel. 

Market focus remains on the upcoming September FOMC meeting, with Friday's PCE report likely to influence rate cut probabilities. The probability of a 25-basis point rate cut at the September meeting now stands at 87.3%, according to the CME FedWatch tool, up from 83.7% yesterday. 

Many of the headlines in today's news cycle have revolved around President Trump firing Fed Governor Lisa Cook over allegations of mortgage fraud, though Bloomberg reports that Ms. Cook's lawyer, Abe Lowell, is taking "whatever actions are needed to prevent" her termination.

Reviewing today's data:

• July Durable Orders 2.8% (Briefing.com consensus -3.5%); Prior was revised to -9.4% from -9.3%, July Durable Goods - ex transportation 1.1% (Briefing.com consensus 0.1%); Prior was revised to 0.3% from 0.2%
  • The key takeaway from the report is that nondefense capital goods orders excluding aircraft—a proxy for business investment—increased 1.1% in July after falling 0.6% in June, making this a generally positive report.
• June FHFA Housing Price Index -0.2% (Briefing.com consensus -0.1%); Prior was revised to -0.1% from -0.2%
• June S&P Case-Shiller Home Price Index 2.1% (Briefing.com consensus 2.8%); Prior 2.8%
• August Consumer Confidence 97.4 (Briefing.com consensus 96.3); Prior was revised to 98.7 from 97.2
  • The key takeaway from the report is that the August downtick was due to decreases in the Present Situation Index and the Expectations Index, though the overall confidence index has not changed much since the report for May.