Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.7%), Nasdaq Composite (+1.3%), and DJIA (+0.3%) are rebounding from an underwhelming finish yesterday with a solid showing today. Gains are broad, and leadership from mega-cap and other growth-oriented pockets of the market is showing up at the index level.

The market received a boost just before the open in the form of the July employment report, which came in softer than expected, showing no payroll growth in July and a large downward revision to the June figures. The report has tempered expectations for additional tightening from the Fed. The probability of a 25-basis point rate hike at the September FOMC meeting has fallen to 41.9% from 55.0% yesterday, while the probability of at least one hike by October has dropped to 57.3% from 71.0%.

The shifting outlook has been particularly supportive of growth stocks so far. The Vanguard Mega Cap Growth ETF is up 1.0%, the PHLX Semiconductor Index is up 2.3%, the Russell 2000 is up 0.9%, and the S&P Mid Cap 400 is up 1.3%. Treasury yields are lower across the curve, with sharp gains in homebuilders and other interest-sensitive names (alongside strength in mega-caps) helping the consumer discretionary sector (+2.0%) outperform.