Stock Market Update

[BRIEFING.COM] The major averages are back near their session lows after a brief recovery attempt, with mounting selling pressure across technology stocks overshadowing some relief from earlier highs in crude oil prices and Treasury yields. The S&P 500 (-0.6%), Nasdaq Composite (-1.1%), and DJIA (-0.3%) are all lower, although the Nasdaq is bearing the brunt of the weakness as semiconductor stocks retreat sharply.

Oil prices have been a central influence on today's trading following reports of escalating attacks on tankers in the Strait of Hormuz and earlier comments from President Trump suggesting that a deal with Iran was not a priority. WTI crude surged more than 5.0% earlier in the session before retreating after President Trump said via Truth Social that the U.S. is engaged in productive discussions with Iran and would not launch attacks against the country before the November 3 midterm elections. Crude is now up $2.65 (+3.0%) to $90.93 per barrel.

Treasury yields have also eased considerably from their earlier highs, with the 10-year note yield down two basis points to 5.25% after reaching 5.35% overnight.

However, the improvement in yields has done little to stem the latest wave of selling across technology stocks, which has become the dominant source of pressure on the major averages. The information technology sector (-1.8%) is the weakest performer, weighed down by a 3.7% decline in the PHLX Semiconductor Index. NVIDIA (NVDA 232.66, -4.80, -2.02%) is among the notable mega-cap laggards, while Coherent (COHR 308.82, -25.74, -7.69%) and Marvell (MRVL 269.45, -15.23, -5.35%) rank among the worst-performing S&P 500 components.

Weakness has also extended to AI-infrastructure-related names in the industrials sector (-0.4%) and electric utilities in the utilities sector (-0.9%), pointing to broader selling across companies associated with the AI buildout.

The health care sector (-1.3%) is another significant laggard following yesterday's rally. Biotechnology stocks have been particularly weak amid concerns about elevated funding costs, with the SPDR S&P Biotech ETF down 1.7%. Eli Lilly (LLY 1152.03, -36.69, -3.09%) and Johnson & Johnson (JNJ 255.38, -3.07, -1.19%) are also notable decliners, adding to the sector's underperformance after a nice showing yesterday.

Meanwhile, the energy sector (+2.5%) remains a clear outperformer as crude oil holds a sizable gain despite pulling back from its highs. The consumer staples sector (+2.1%) is also showing pronounced strength as investors gravitate toward defensive stocks. Coca-Cola (KO 87.78, +1.96, +2.28%) is among the beneficiaries as PepsiCo (PEP 126.04, +2.31, +1.87%) is trading higher following a mixed earnings report that included better-than-expected quarterly results but reduced FY26 earnings guidance.

The financials sector (+0.4%) is another pocket of relative strength.

The broader market remains under pressure despite the retreat in oil prices and Treasury yields. Selling has intensified in semiconductor and other AI-related stocks, leaving the Nasdaq particularly vulnerable, while strength in the energy and consumer staples sectors has provided only a partial offset to weakness elsewhere.

Reviewing today's data:

• For the week ending October 3, initial claims decreased 2,000 to 197,000 (Brieifng.com consensus: 200,000). Continuing claims for the week ending September 26 were up 17,000 to 1.716 million.
  
  • The key takeaway from the report is a broken (but pleasant-sounding) record: layoff activity continues to run at low levels that reflect a solid demand environment.
• Aug Wholesale Inventories 0.5% (Briefing.com consensus 0.7%; Prior 1.4% revised from 1.3%)