Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.3%), Nasdaq Composite (-0.5%), and DJIA (+0.5%) have traded in a mixed fashion, with mega-cap weakness tempering broader gains ahead of this afternoon's FOMC decision. 

NVIDIA (NVDA 169.48, -5.40, -3.09%) holds the most substantial loss among the mega-caps, trading lower after The Financial Times reported that China told its domestic companies to stop buying NVIDIA chips. 

As a result, the information technology sector (-1.0%) is the worst-performing S&P 500 sector today. The consumer discretionary (-0.7%) and communication services (-0.3%) sectors also face losses in their mega-cap components, while the industrials sector (-0.1%) just recently moved beneath its flatline. 

Currently, Apple (AAPL 239.70, +1.56, +0.65%) is the only "magnificent seven" name that holds a gain for the day, reflecting that today's pressure on the market's largest names is more than just a combination of stock-specific headwinds. The Vanguard Mega Cap Growth ETF is down 0.9%, and the S&P 500 Equal Weighted Index (+0.5%) comfortably outperforms the market-weighted S&P 500 (-0.3%). 

The latter figure in particular hints that a rotational aspect may be in play, with investors jockeying for position in smaller names that could be poised to especially benefit from a friendlier interest rate environment.

This notion is particularly evident outside of the S&P 500, as the small-cap Russell 2000 (+0.8%) and S&P Mid Cap 400 (+0.4%) are both outperforming today.

The Russell 2000 has risen 11.4% quarter-to-date, outpacing the major averages as confidence in future rate cuts has strengthened.

In between the market's largest and smallest components, the majority of names are faring relatively well today. Seven S&P 500 sectors trade higher, with the consumer staples (+1.1%), financials (+0.7%), and real estate (+0.7%) sectors holding the widest gains. 

Advancers outpace decliners by a roughly 2-to-1 ratio on the NYSE and a 3-to-2 clip on the Nasdaq, denoting a healthier breadth beneath the surface despite mega-cap weakness.

Focus now turns to the imminent FOMC decision at 2:00 p.m. ET and a subsequent press conference at 2:30 p.m. ET where investors will be looking for guidance on the path of future rate cuts and the updated economic projections.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 29.7%; Prior 9.2%
• August Housing Starts 1.307 mln (Briefing.com consensus 1.375 mln); Prior was revised to 1.429 mln from 1.428 mln, August Building Permits 1.312 mln (Briefing.com consensus 1.370 mln); Prior 1.362 mln
  • The key takeaway from the report is the weakness in single-unit starts (-7.0% month-over-month) and single-unit permits (-2.2%), which is a reflection of affordability constraints for builders and prospective homeowners alike. Strikingly, single-unit starts in the South—the nation's largest homebuilding region—plunged 17.0% in August