Stock Market Update

[BRIEFING.COM] Mega-cap technology stocks are extending last week's rebound with a sharp rally to start the first trading session of August, keeping the S&P 500 (+1.3%), Nasdaq Composite (+2.0%), and DJIA (+0.9%) in a steady range near their session highs just after midday.

Similar to the back half of last week's action, the "Magnificent Seven" group is leading the major averages firmly higher today, with six of the seven names posting solid gains. Meta Platforms (META 593.92, +37.21, +6.68%) is out in front, extending last week's rebound off multi-month lows alongside Alphabet (GOOG 375.14, +18.48, +5.18%) and pushing the communication services sector (+4.9%) firmly higher.

Tesla (TSLA 320.17, +8.96, +2.88%) is also attracting buy-the-dip interest amid today's risk-on tone, while Amazon (AMZN 284.82, +13.24, +4.88%) builds on last week's impressive post-earnings gain, helping lift the consumer discretionary sector (+2.7%).

The information technology sector (+1.5%) rounds out today's leaders as Microsoft (MSFT 488.64, +23.92, +5.15%) extends its post-earnings momentum while NVIDIA (NVDA 207.00, +6.26, +3.12%) reclaims its 50-day moving average (205.85). However, the sector opened in negative territory amid continued volatility across semiconductor stocks, with the PHLX Semiconductor Index (+0.2%) retreating nearly 3% before recovering. While this week's earnings calendar lacks the firepower of last week's "Magnificent Seven" reports, several prominent chipmakers, including Advanced Micro Devices (AMD 480.81, +4.66, +0.98%) and a number of memory names, could still drive volatility over the coming days.

All told, the Vanguard Mega Cap Growth ETF is up 2.3%, highlighting the outsized contribution of the market's largest companies to today's advance.

That is not to say the broader market is being left behind. The S&P 500 Equal Weight Index (+0.7%) also sports a healthy gain, while advancers outpace decliners by roughly 2-to-1 on the NYSE and 3-to-1 on the Nasdaq. Eight S&P 500 sectors trade higher, with lower oil prices contributing to strength in the consumer discretionary (+2.7%) and industrials (+1.1%) sectors.

WTI crude oil is down $4.99 (-5.9%) to $79.68 per barrel after President Trump called off a wave of planned strikes against Iran. The energy sector (-0.9%) is the market's primary laggard as a result, while the defensive health care (-0.5%) and consumer staples (-0.3%) sectors also trade modestly lower as investors rotate away from more defensive areas of the market.

Outside the S&P 500, the Russell 2000 (+1.5%) is keeping pace with the major averages, while the S&P MidCap 400 (+0.8%) posts a more modest gain.

Today's action suggests investors are beginning August with a renewed appetite for risk following last week's strong earnings reports and easing geopolitical tensions. While leadership remains concentrated in mega-cap technology stocks, improving participation across the broader market and a sharp decline in oil prices are providing a supportive backdrop heading into another busy week of earnings.

Reviewing today's data:

• July S&P Global U.S. Manufacturing PMI - Final 53.9; Prior 53.8
• June Construction Spending -0.1% (Briefing.com consensus 0.3%); Prior was revised to 0.0% from 0.1%
  • The key takeaway from the report is that the softness was driven entirely by residential spending.
• July ISM Manufacturing Index 55.6% (Briefing.com consensus 54.0%); Prior 53.3%
  • The key takeaway from the report is that manufacturing activity picked up steam in July, with the PMI logging its highest reading since May 2022.