Stock Market Update

[BRIEFING.COM] Stocks traded cautiously today amid a rise in oil prices and in anticipation of tomorrow's FOMC meeting, with the S&P 500 (+0.3%), Nasdaq Composite (+0.5%), and DJIA finishing a touch off their session lows. 

Oil saw some gains this morning following headlines that Iran struck a natural gas field in the UAE and targeted another tanker in the Strait of Hormuz. The market showed some resilience to the rebound in oil prices, opening to broad gains that were steadily eroded throughout the morning. Crude oil futures settled today's session $2.70 higher (+2.9%) at $96.05 per barrel.

The energy sector (+1.2%) notched the widest gain today, with Halliburton (HAL 35.64, +1.48, +4.33%) and APA Corp. (APA 35.86, +1.32, +3.84%) leading the advance. 

While the major averages gave back most of their early gains, eight total S&P 500 sectors managed to notch a higher finish today, keeping with yesterday's trend of broad strength. 

The consumer discretionary sector (+1.0%) outperformed, boosted by a nice gain in Amazon (AMZN 215.20, +3.46, +1.63%), which was a mega-cap standout today. The stock reached session highs this afternoon after Reuters reported that CEO Andy Jassy expects AI to double AWS projections to $600 billion by 2036.

Travel and leisure names such as Expedia Group (EXPE 241.25, +9.79, +4.23%) and Booking Holdings (BKNG 4442.33, +149.31, +3.48%) added support as the group rebounds from recent weakness tied to geopolitical and energy volatility. 

Alphabet (GOOG 309.41, +4.99, +1.64%) was another mega-cap standout, helping the communication services sector (+0.7%) finish near the top of the leaderboard as several other sectors trended lower later in the session. 

The Vanguard Mega Cap Growth ETF (+0.2%) finished well off its session highs, and the S&P 500 Equal Weighted Index (+0.5%) outperformed the market-weighted S&P 500 (+0.3%). 

Several of the ETF's weaker components resided in the information technology sector (+0.2%), which finished just modestly higher after opening to solid gains this morning. NVIDIA (NVDA 181.93, -1.29, -0.70%) saw some profit-taking following yesterday's GTC conference developments that featured CEO Jensen Huang's projections for at least $1 trillion in revenue opportunity through 2027 for Blackwell and Rubin chips.

The PHLX Semiconductor Index (+0.5%) still managed a higher finish as memory storage names such as Western Digital (WDC 313.81, +27.60, +9.64%) and Micron (MU 461.69, +19.89, +4.50%) traded sharply higher again today. 

Software stocks were also relatively solid today, with the iShares GS Software (IGV 85.52, +0.57, +0.67%) finishing 0.7% higher.

Meanwhile, the health care sector (-0.9%) closed with the widest loss today as Eli Lilly (LLY 930.51, -58.61, -5.93%) lagged after HSBC downgraded the stock to Reduce from Hold, with a target price of $850. The defensive consumer staples (-0.5%) and utilities (-0.3%) sectors also moved lower this afternoon after trading flattish for most of the session.

Other noteworthy corporate developments include the outperformance of airline stocks after Delta Air Lines (DAL 64.82, +3.98, +6.54%) raised its Q1 guidance, while Uber (UBER 77.79, +3.13, +4.19%) traded higher after Reuters reported that the company plans to launch a robotaxi service that runs on NVIDIA's self-driving platform. Those developments helped offset weakness in the industrials sector (+0.3%), which faced some profit-taking in its defense names today. 

Outside of the S&P 500, the Russell 2000 (+0.7%) and S&P Mid Cap 400 (+0.9%) outperformed the major averages.

Ultimately, the market held up reasonably well in the face of higher oil prices, but the pullback from early highs highlights a more cautious bias. Focus now shifts to tomorrow’s FOMC decision, where investors will be looking for clarity on how recent energy developments factor into the Fed’s outlook.

U.S. Treasuries saw yields fall back from higher levels in the overnight trade and close the regular session slightly lower than yesterday's settlement. Worries about slower growth and hesitation in front of Wednesday's FOMC decision and press conference ultimately won out as the Treasury market's driving influence. The 2-year note yield settled down one basis point to 3.67% and the 10-year note yield settled down two basis points to 4.20%. 

• S&P Mid Cap 400: +2.7% YTD
• Russell 2000: +1.5% YTD
• S&P 500: -1.9% YTD
• DJIA: -2.2% YTD
• Nasdaq Composite: -3.3% YTD

Reviewing today's data:

• February Pending Home Sales increased 1.8% (Briefing.com consensus: -0.8%; prior revised to -1.0% from -0.8%)