Stock Market Update

[BRIEFING.COM] The stock market furthered its hot start to the first full trading week of the year today, with broad gains pushing the S&P 500 (+0.6%) and DJIA (+1.0%) to fresh record highs. The Nasdaq Composite (+0.7%) performed similarly to the S&P 500, while the smaller-cap Russell 2000 (+1.4%) and S&P Mid Cap 400 (+1.5%) indices outperformed. 

Today's action featured a notable AI-related catalyst in the form of another strong rally from semiconductor names. The PHLX Semiconductor Index advanced 2.8%, expanding its year-to-date gains to 8.0%. 

Memory storage names displayed particular strength after Microchip (MCHP 74.87, +7.81, +11.65%) issued a significant upward revision to its fiscal Q3 guidance, fueling a surge in the stock as the company signals a definitive end to its recent cyclical downturn. Sandisk (SNDK 349.63, +75.55, +27.56%), Western Digital (WDC 219.38, +31.50, +16.77%), Seagate Tech (STX 330.42, +40.59, +14.00%), and Micron (MU 343.48, +31.33, +10.04%) were all also among the top-performing S&P 500 names today as the demand for memory remains elevated amid the AI buildout cycle. 

NVIDIA (NVDA 187.28, -0.84, -0.45%) generated some premarket buzz following the launch of its Rubin platform, which is comprised of six new chips designed to deliver an AI supercomputer. However, the stock has struggled to distance itself from its 50-day moving average (186.76) in recent sessions, which limited the gains of the information technology sector (+0.7%). 

NVIDIA also announced an expansion into the autonomous driving sector with its open-source Alpamayo platform and partnerships with Visteon (VC 103.62, +4.63, +4.68%) and Hesai Group (HSAI 26.80, +2.55, +10.52%), which integrate high-performance lidar and cockpit systems into a unified "Rubin" AI platform that rivals Tesla's (TSLA 432.96, -18.71, -4.14%) Full Self-Driving (FSD) stack.

Tesla moved sharply lower in response, though another day of solid leadership from Amazon (AMZN 240.91, +7.85, +3.37%) and relative strength across cyclical names helped the consumer discretionary sector (+0.9%) notch a solid gain. 

Rideshare platforms, on the other hand, rallied at the news, which could help accelerate the global shift toward driverless fleets. Uber (UBER 85.54, +4.80, +5.95%) was one of the top-performing names in the industrials sector (+1.4%), which has put together two solid performances to start the week. 

The materials sector (+2.0%) would go on to notch the widest gain, additionally supported by metals prices rallying towards recent record high levels. 

The health care sector (+2.0%) finished similarly, as the sector saw broad-based strength after navigating a narrow range over the past three weeks.  Moderna (MRNA 35.66, +3.49, +10.85%) notched a double-digit gain after announcing it submitted its seasonal flu vaccine for regulatory approval. 

Meanwhile, only the energy (-2.8%) and communication services (-0.5%) sectors finished lower. The communication services sector faced weak leadership from Alphabet (GOOG 314.55, -2.77, -0.87%), while the energy sector saw several names that outperformed in response to developments in Venezuela give back some of yesterday's strength.  Chevron (CVX 156.58, -7.27, -4.44%), which is the only major oil company operating in the country, was the sector's worst performer.  Reuters reported this afternoon that Venezuela is in discussions to export oil to the U.S.

Ultimately, today's action reflected a market entering the new year with clear growth aspirations. Broad leadership across cyclical sectors reinforced confidence in the economic outlook, while outsized gains among memory storage names kept enthusiasm around the AI buildout firmly intact. Even with semiconductors providing a notable catalyst, the Vanguard Mega Cap Growth ETF (+0.3%) logged only a modest advance, suggesting that leadership is beginning to broaden beyond the largest growth names as the major averages continue to chart record highs. 

U.S. Treasuries dipped on Tuesday, giving back some of their gains from Monday. The 2-year note yield settled up two basis points to 3.48%, and the 10-year note yield settled up one basis point to 4.18%. 

• S&P Mid Cap 400: +4.2% YTD
• Russell 2000: +4.1% YTD
• DJIA: +2.9% YTD
• S&P 500: +1.5% YTD
• Nasdaq Composite: +1.3% YTD

Reviewing today's data:

• The S&P Global U.S. Services PMI hit 52.5 in the final reading for December, down from the flash reading (52.9) and down from the final November reading (54.1).