Stock Market Update

[BRIEFING.COM] The major averages have strengthened into midday, with the S&P 500 (+0.4%), Nasdaq Composite (+0.4%), and DJIA (+0.7%) sitting near session highs as renewed hopes for progress toward a diplomatic solution to the U.S.-Iran conflict pressure crude oil and provide support for equities. The Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.5%) have also joined the advance after spending much of the morning near their flat lines.

The improvement accelerated late in the morning alongside reports of further movement in U.S.-Iran discussions. CBS News, citing Al Jazeera, reported that talks have entered a technical phase with a potential Strait of Hormuz agreement in focus, while Axios reported that Qatar and Iran are awaiting a U.S. response to Iran's proposal. President Trump has also urged Chinese President Xi to reduce China's support for Iran.

Crude oil has responded sharply to those developments, with WTI now down $2.60 (-2.8%) at $93.01 per barrel after trading only modestly lower earlier in the session. The decline has helped alleviate some of the inflation-related concerns surrounding elevated energy prices and contributed to the latest leg higher in stocks. The 10-year note yield is currently at 5.19%.

Technology stocks remain an important source of support after leading the market from the opening bell. The information technology sector (+1.0%) is among the strongest performers, while the PHLX Semiconductor Index (+1.7%) has extended its advance after giving back a sizable portion of its opening gain earlier this morning. Microsoft (MSFT 518.50, +20.57, +4.13%) has been a notable mega-cap and DJIA standout throughout the session.

The industrials sector (+0.9%) is another standout, supported in part by strength in semiconductor-linked names such as Bloom Energy (BE 290.61, +23.96, +8.99%) while the financials sector (+0.4%) has joined the advance. Six S&P 500 sectors are now higher, marking an improvement from the relatively narrow participation seen earlier in the morning.

There are also several notable stock-specific gainers. Costco (COST 917.62, +21.14, +2.36%) is higher following its Q4 report, which featured better-than-expected earnings alongside resilient comparable-sales growth and improving renewal rates. Akamai Tech (AKAM 116.28, +5.87, +5.32%) has also rallied after significantly expanding its relationship with Anthropic through an $11.6 billion contractual commitment over seven years, with additional commitments potentially bringing the relationship to as much as $20 billion.

Not all areas are participating in the rally. The energy sector (-1.2%) has fallen to the bottom of the standings as crude oil retreats, while the communication services sector (-0.8%) remains under pressure as Meta Platforms (META 749.46, -28.12, -3.62%) gives back some of its sizable gains following the recent Muse-driven rally.

The market's move to session highs represents a notable improvement from the quieter, technology-driven action seen earlier this morning. Semiconductor strength continues to underpin the advance, but the sharp drop in crude oil and increased optimism surrounding U.S.-Iran negotiations have provided an additional catalyst, helping broaden gains to small- and mid-cap stocks heading into the afternoon. At current levels, the major averages are also on track to finish the week with gains, which would snap a three-week losing streak for the DJIA.

Reviewing today's data:

• Aug Durable Orders 0.0% (Briefing.com consensus -0.4%; Prior 0.9% revised from 1.1%)
• Aug Durable Goods –ex transportation 0.3% (Briefing.com consensus 0.5%; Prior 0.7% revised from 0.4%)
• The final reading for the University of Michigan Consumer Sentiment Index for September increased to 48.1 (Briefing.com consensus: 47.8) from the preliminary reading of 47.8. The final reading for August was 51.7. In the same period a year ago, the index stood at 55.1.
  • The key takeaway from the report is that high prices continue to adversely affect consumer sentiment, souring the short-run outlook for business conditions and expectations for year-ahead personal finances.