Stock Market Update

[BRIEFING.COM] The stock market has faced some choppy action to start the week as developments surrounding the war in Iran have caused some significant swings in the market today.

Stocks opened sharply higher after President Trump said via Truth Social this morning that the U.S. and Iran have engaged in productive negotiations to end all hostilities, with the president adding that he has instructed the Department of War to hold off bombing Iran's power plants and energy infrastructure for a five-day period, subject to the success of ongoing meetings.

While reports began to circulate that Iranian officials were refuting the claims of negotiations, stocks charged ahead, with the major averages all trading more than 2.0% higher. 

The S&P 500 (+1.1%), Nasdaq Composite (+1.2%), and DJIA (+1.4%) have since given up a chunk of the early strength, charting a course to session lows after reaching session highs around midday. Enthusiasm has been tempered by more reports that Iran has denied any negotiations, including commentary from the Speaker of Iran's Parliament. The major averages are back below their respective 50-day moving averages after the S&P 500 and DJIA briefly reclaimed the key technical levels this morning. 

While the market has moved off of its session highs, strength remains broad, with all eleven S&P 500 sectors trading higher. 

A sharp retreat in oil prices has certain cyclical sectors outperforming as cruise lines, airlines, and other energy-sensitive pockets of the market garner some buying interest today. The consumer discretionary (+2.5%) and industrials (+1.7%) sectors hold the widest gains, though they both traded more than 3.0% higher earlier in the session. Norwegian Cruise Line (NCLH 20.30, +1.34, +7.10%) and Carnival (CCL 25.57, +1.45, +6.01%) are among the top-performing S&P 500 names today. 

Meanwhile, the energy sector (+0.9%) has risen off its session lows as oil reclaims some of its previous weakness. WTI crude remains down $9.09, or 9.3%, at $89.14 per barrel after marking a low just south of $85 per barrel. 

The defensive health care (+0.1%) and consumer staples (+0.5%) sectors hold the narrowest gains as growth and cyclical sectors rebound from recent weakness. 

Outside of the S&P 500, the Russell 2000 (+2.4%) and S&P Mid Cap 400 (+2.2%) outperform the major averages. 

Despite the pullback from session highs, the broader tone remains constructive. Uncertainty persists around the extent of U.S.-Iran engagement in negotiations, but President Trump’s stated commitment to pursuing a resolution marks a notable shift in tone that is fostering some optimism around a potential off-ramp to the conflict. Key technical levels also remain in focus, with the 200-day moving averages acting as an important barometer for market sentiment.

Reviewing today's data:

• January Construction Spending -0.3% (Briefing.com consensus 0.1%); Prior was revised to 0.8% from 0.3%
  
  • The key takeaway from the report is that the weakness was paced by a decline in private residential spending, which is believed to be a knock-on effect of labor constraints and higher interest rates.