Stock Market Update

[BRIEFING.COM] The major averages finished firmly higher on Friday, holding the bulk of an early advance through a relatively quiet afternoon. The S&P 500 (+0.7%), Nasdaq Composite (+1.2%), and DJIA (+0.5%) all ended with solid gains, while the Russell 2000 (+0.9%) and S&P Mid Cap 400 (+1.0%) outperformed. Despite today's broadly positive finish, only the Nasdaq Composite and S&P Mid Cap 400 ended the week with week-to-date gains.

The session's strongest move came during the morning following the September Employment Situation report, which showed nonfarm payrolls increasing by just 29,000 (Briefing.com consensus 100,000), alongside an uptick in the unemployment rate to 4.2% (Briefing.com consensus 4.1%) and a 0.1% month-over-month increase in average hourly earnings. The softer labor data initially reinforced expectations that the Fed will refrain from another rate hike at this month's FOMC meeting, helping propel the major averages to their session highs during the opening stretch.

That initial momentum faded as Treasury yields reversed their post-jobs-report decline, but the equity market gave back relatively little ground.

Crude oil provided another source of early support after G7 leaders announced a coordinated release of 100 million barrels of oil through the IEA, beginning immediately and extending over four months. WTI crude briefly fell below $90 per barrel before recovering a sizable portion of its decline, ultimately settling $1.92 lower (-2.1%) at $91.10 per barrel.

After settling below their morning highs around midday, the major averages spent most of the afternoon moving in a tight range and ultimately carried solid gains into the close.

Technology and mega-cap growth stocks remained at the forefront of the advance. The information technology sector (+1.1%) finished among the day's leaders, while the PHLX Semiconductor Index gained 2.4%. NVIDIA (NVDA 233.95, +3.09, +1.34%) was among the notable semiconductor winners, and the Vanguard Mega Cap Growth ETF rose 1.0%.

SpaceX (SPCX 158.95, +10.88, +7.35%) was another standout among growth-oriented names, climbing amid favorable analyst commentary regarding demand for its Grok Bot.

Mega-cap strength also helped lift the communication services sector (+0.9%), which finished among the better-performing groups.

The consumer discretionary sector (+1.4%) topped the sector standings, supported by a sizable gain in Tesla (TSLA 370.59, +16.48, +4.65%) after the company reported Q3 deliveries of 486,532 vehicles, above its company-compiled analyst consensus of 461,974. Tesla's strength helped offset a sharp post-earnings decline in NIKE (NKE 33.90, -1.26, -3.57%), which ranked among the worst-performing S&P 500 components and fell to fresh decade lows following a disappointing FY27 outlook.

There was also pronounced divergence elsewhere in the technology landscape. Western Digital (WDC 415.29, -47.27, -10.22%) and Seagate Tech (STX 848.99, -96.58, -10.21%) came under heavy pressure after Toshiba announced an expansion of HDD production in the Philippines, raising concerns that additional industry capacity could eventually loosen the tight supply-demand environment that has supported strong pricing and margins.

The materials sector (+1.0%) was another standout, while all 11 S&P 500 sectors ultimately finished at or above their flat lines.

The health care (flat) and financials (flat) sectors were today's laggards, with continued weakness in biotech names weighing on the health care sector.

Participation was also healthier than the recent pattern of concentrated mega-cap leadership might suggest. The Russell 2000 and S&P Mid Cap 400 both outperformed the S&P 500, and every S&P 500 sector avoided a loss. Still, the S&P 500 Equal Weighted Index (+0.4%) trailed the cap-weighted index (+0.7%), underscoring that technology and mega-cap growth stocks continued to provide an outsized portion of the support.

Ultimately, Friday's session combined stronger participation across small- and mid-cap stocks with continued leadership from technology and mega-cap growth names. The market's ability to preserve most of its early advance despite the reversal in Treasury yields was notable, although the gap between the cap-weighted and Equal-Weight S&P 500 showed that the familiar concentration in the market's largest stocks remained firmly in place.

U.S. Treasuries finished the week with losses across the curve after a brief morning rally gave way to a reversal that lifted yields on longer tenors back to their highest levels of the year. The 2-year note yield settled up three basis points to 4.82% (+4 basis points this week), and the 10-year note yield settled up four basis points to 5.28% (+10 basis points this week). 

• Nasdaq Composite: +17.0% YTD
• Russell 2000: +14.1% YTD
• S&P 500: +12.8% YTD
• S&P Mid Cap 400: +11.0% YTD
• DJIA: +6.5% YTD

Reviewing today's data:

• Sep Nonfarm Payrolls 29K (Briefing.com consensus 100K; Prior 133K revised from 162K)
• Sep Nonfarm Private Payrolls 46K (Briefing.com consensus 100K; Prior 89K revised from 127K)
• Sep Unemployment Rate 4.2% (Briefing.com consensus 4.1%; Prior 4.1%)
• Sep Average Hourly Earnings 0.1% (Briefing.com consensus 0.3%; Prior 0.3%)
• Sep Average Workweek 34.4 (Briefing.com consensus 34.3; Prior 34.4)
• Factory orders increased 0.1% month-over-month in August (Briefing.com consensus: 0.0%) following a downwardly revised 0.8% increase (from 0.9%) in July. Excluding transportation, factory orders increased 0.3% on the heels of a 0.7% increase in July. Shipments of manufactured goods were flat after being up 0.8% in July.
  • The key takeaway from the report is that business spending was up solidly in August, notwithstanding an overall sluggish increase in factory orders.

[BRIEFING.COM] The major averages continue to move in a tight range this afternoon as the bulk of today's market-moving developments came before noon.

Crude oil futures settled today's session $1.92 lower (-2.1%) at $91.10 per barrel, which is well off its earlier lows that saw it move below $90 per barrel. Crude oil shed just under 1.5% this week as the market awaits more impactful developments on the U.S.-Iran conflict.

[BRIEFING.COM] The S&P 500 (+0.7%), Nasdaq Composite (+1.2%), and DJIA (+0.4%) are sustaining today's advance as the market enters the final hour of today's session, though the gains keep only the Nasdaq Composite (+1.2%) on track for a higher week-to-date finish.

Part of the Nasdaq's strength is due to a sizable gain in SpaceX (SPCX 158.89, +10.82, +7.31%), which is being attributed to favorable analyst commentary regarding demand for its Grok Bot. While the stock is still more than 30% off its all-time high from June 16, it now trades more than 10% above its 200-day moving average of $143.64.

[BRIEFING.COM] The S&P 500 (+0.6%) remains just below its opening level after dipping from its session high that was reached during the initial 90 minutes of trade. Given the current standing, the benchmark index is down 0.4% for the week, while the Nasdaq (+1.1%) outperforms, tracking a 0.3% gain for the week.

Nine sectors hold gains in afternoon trade with the consumer discretionary sector (+1.2%) defending the lead. This has narrowed the group's week-to-date loss to 0.4% while top-weighted technology (+1.0%) is on track to gain 1.3% for the week.

On the downside, health care (-0.3%) underperforms today, continuing this week's show of relative weakness that has the sector down 3.0% since last Friday, largely due to underperformance among biotech names. Gilead Sciences (GILD 144.29, -3.21, -2.18%) is today's worst performer in the sector, widening this week's loss to 4.3%.

[BRIEFING.COM] The Nasdaq Composite remains the relative leader with a 1.2% gain, while the S&P 500 is up 0.7% and the DJIA is higher by 0.4%. The major averages have seen modest changes since the prior update and remain below their morning highs amid a reversal in the Treasury market.

The 10-year note yield is up four basis points at 5.28%, well above its post-jobs-report low of 5.16%. Treasuries rallied immediately following the report, but the buying did not persist, and yields moved steadily higher across the curve. That reversal has tempered the earlier equity momentum, although growth-oriented shares continue to outperform.

Within the Dow Jones Industrial Average, Cisco (CSCO 111.82, +3.06, +2.81%) is the biggest percentage gainer while NIKE (NKE 33.52, -1.62, -4.62%), after a disappointing FY27 outlook, is the biggest percentage loser. Now trading close to $30.0 per share, there are bound to be questions as to how much longer the stock will be retained in the Dow Jones Industrial Average.