Stock Market Update

[BRIEFING.COM] The equity market advanced in broad-based fashion this morning as bolstered rate cut expectations sent the S&P 500 (+0.8%), Nasdaq Composite (+0.7%), and DJIA (+1.3%) to fresh record highs.

Although the August CPI report showed inflation increasing slightly higher than expectations (0.4%; Briefing.com consensus: 0.3%), a 27,000 increase in initial jobless claims solidified probabilities of additional 25-basis point rate cuts in October and December, with a September cut fully priced in already. 

Bolstered odds of the market receiving at least 75-basis points worth of rate cuts by the end of the year have been especially beneficial to smaller cap names, with the Russell 2000 up 1.3% and the S&P Mid Cap 400 up 1.2%. 

Nine S&P 500 sectors are in positive territory, with the consumer discretionary (+1.6%), health care (+1.5%), materials (+1.3%), real estate (+1.1%), and financials (+1.1%) sectors all holding gains wider than 1.0%. 

Only the communication services sector (-0.1%) trades lower, as its largest component, Alphabet (GOOG 239.18, -0.38, -0.16%), holds a modest loss.

Meanwhile, the energy sector trades flat as crude oil prices have fallen $1.14 to $62.53 per barrel, a decrease of 1.8%. 

While yesterday's selective AI-driven advance saw a select number of names underpin gains, today's action comes on far broader market participation. Mega-caps are still up (the Vanguard Mega Cap Growth ETF is up 0.6%), but they are not the sole driver of today's gains, as the S&P 500 Equal Weighted Index (+1.0%) outperforms the market-weighted S&P 500 (+0.8%).