Stock Market Update

[BRIEFING.COM] The stock market faced some choppy action today, though the S&P 500 (+1.2%), Nasdaq Composite (+1.2%), and DJIA (+1.2%) finished with solid gains that saw them reclaim about half of yesterday's losses. 

Today's action was defined by three distinct market-level moves. The first of these events occurred shortly before the open as investors digested commentary from President Trump at the World Economic Forum. While President Trump reiterated his stance that the U.S. needs to acquire Greenland for national security, he said that the U.S. would not use force as a means of acquisition. Equity futures spiked in response, and the major averages set off on a course of broad-based gains after the open. 

Even after the EU announced a suspension of the Turnberry Deal, which would have suspended tariffs on all US industrial goods and established a tariff-rate quota system for a large number of US agri-food products entering the EU, the major averages continued to chart session highs until just before midday. 

Stocks then faced a sharp intraday retreat without a clear catalyst that narrowed the gains of nearly every corner of the market. Mega-cap names were among the first to show signs of weakness, and the Nasdaq Composite, which had traded over 1.0% higher, briefly entered negative territory. The top-weighted information technology sector (+0.9%) also entered negative territory after trading over 1.0% higher. 

The major averages then drifted through the early afternoon with a portion of their earlier strength before the broader market saw one final sharp intraday move. 

President Trump announced that the framework of a future deal with respect to Greenland and the entire Arctic region has been formed with Mark Rutte, Secretary General of NATO. Additionally, he said he will not impose the tariffs that were set to go into effect February 1.

Stocks rallied in response, with the major averages climbing back to earlier session high levels. 

All eleven S&P 500 sectors finished higher, and seven finished with gains of 1.0% or wider. 

The information technology sector (+1.0%) had the choppiest day but finished with a solid gain. Semiconductor names once again provided strong leadership, with the PHLX Semiconductor Index finishing 3.2% higher.  Intel (INTC 54.25, +5.69, +11.72%) was one of the top-performing S&P 500 names today, posting another monster gain that seats the stock with a 47.0% gain this year. 

Only Moderna (MRNA 49.81, +6.81, +15.84%) finished higher, rallying after the company, along with Merck (MRK 111.09, +1.64, +1.50%), reported encouraging five-year data regarding their melanoma vaccine.  The health care sector (+1.8%) was a top performer and was largely resilient to the broader market swings. 

Improvements across mega-cap names such as Tesla (TSLA 431.44, +12.19, +2.91%) and Alphabet (GOOG 328.38, +6.22, +1.93%) helped the consumer discretionary (+1.6%) and communication services (+1.4%) sectors finish higher as well. The Vanguard Mega Cap Growth ETF finished 0.9% higher after entering negative territory around midday. 

The energy sector (+2.3%) was the top gainer, trading in a stable range since the morning hours. Crude oil futures settled today's session just $0.24 higher (+0.4%) at $60.60 per barrel, but the sector was propped up by natural gas settling $0.98 higher (+25.1%) at $4.88/MMBtu. Additionally, President Trump, in his WEF address, made comments highlighting the future profitability of oil production in Venezuela.  Halliburton (HAL 33.36, +1.30, +4.05%), which has risen in conjunction with developments in Venezuela, posted a solid gain after topping earnings estimates this morning. 

United Airlines (UAL 110.96, +2.39, +2.20%) also traded higher after beating earnings estimates, while Netflix (NFLX 85.36, -1.90, -2.18%) traded lower after topping estimates but issuing soft near-term guidance. 

Outside of the S&P 500, the Russell 2000 (+2.0%) and S&P Mid Cap 400 (+1.8%) followed a similar path to that of the major averages and once again slightly outperformed them. 

While today's intraday volatility reflected lingering sensitivity to geopolitical headlines, stocks ultimately finished with broad gains that helped the S&P 500 reclaim its 50-day moving average (6,832). The market now cautiously proceeds to tomorrow's session that will feature another batch of earnings reports and key inflation data in the form of the PCE Price Index. 

U.S. Treasuries climbed on Wednesday with longer tenors reclaiming roughly half of their losses from Tuesday while the short end turned slightly positive for the week. The 2-year note yield finished unchanged at 3.60%, and the 10-year note yield settled down four basis points to 4.25%.

• Russell 2000: +8.7% YTD
• S&P Mid Cap 400: +6.5% YTD
• DJIA: +2.1% YTD
• S&P 500: +0.4% YTD
• Nasdaq Composite: -0.1% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 14.1%; Prior 28.5%
• September Construction Spending -0.6% (Briefing.com consensus 0.0%); Prior was revised to 0.4% from 0.2%
• December Pending Home Sales -9.3% (Briefing.com consensus 0.7%); Prior 3.3%
• October Construction Spending 0.5% (Briefing.com consensus 0.2%); Prior -0.6%
  • The key takeaway from the report is that the rebound in October was driven by residential spending and specifically private residential improvements.

[BRIEFING.COM] With the major averages substantially improved from an intraday retreat, the S&P 500 (+1.3%) and Nasdaq Composite (+1.4%) now look to close above their respective 50-day moving averages. The major averages currently sit near this morning's peak levels before stocks faced a notable intraday retreat. 

In addition to the broader market advance, Apple (AAPL 248.75, +2.05, +0.83%) now trades higher after Bloomberg reported that the company is looking to turn Siri into an AI chatbot later this year. 

[BRIEFING.COM] The S&P 500 (+1.5%), Nasdaq Composite (+1.6%), and DJIA (+1.5%) have seen a surge to new session highs after President Trump said that the framework of a future deal with respect to Greenland and the entire Arctic region has been formed with Mark Rutte, Secretary General of NATO. Additionally, he said he will not impose the tariffs that were set to go into effect February 1.

The major averages are now a touch above session highs from this morning, while the Russell 2000 (+1.9%) and S&P Mid Cap 400 (+2.1%) have surged even higher. 

All eleven S&P 500 sectors are back in positive territory, including the information technology sector (+1.8%), which had a brief stint in negative territory.

Additionally, the CBOE Volatility Index is down 16.2% to 16.83 after trading close to 21.00 earlier in the day.

[BRIEFING.COM] The S&P 500 (+0.44%) is in second place on Wednesday afternoon, up about 30 points.

Briefly, S&P 500 constituents Teledyne Tech (TDY 616.45, +50.22, +8.87%), Qnity Electronics (Q 101.51, +6.38, +6.71%), and EQT Corp. (EQT 54.53, +3.05, +5.92%) pepper the top of the standings. TDY rises following this morning's Q4 beat, while EQT rallies as natural gas prices surged for a second day on forecasts for snow in Texas, raising the risk of production outages in a key supply region and boosting shares across the gas E&P space.

Meanwhile, Kraft Heinz (KHC 22.25, -1.51, -6.36%) slides to the bottom of the average as shares slid after KHC disclosed that Berkshire Hathaway (BRK.B 483.09, -2.30, -0.47%) may sell nearly all of its 325 mln share stake post-spinoff, compounded by a BNP Paribas Exane downgrade and lower price targets amid persistent volume pressures.

[BRIEFING.COM] The Nasdaq Composite (+0.33%) is in last place among the major average on Wednesday afternoon, up about 75 points.

Gold futures settled $71.70 higher (+1.5%) at $4,837.50/oz, as investors piled into safe havens amid rising geopolitical tensions and a softer U.S. dollar, reinforcing risk-off flows. Expectations for Fed rate cuts and concerns over sovereign debt are further lowering the opportunity cost of holding gold, keeping momentum firmly bullish.

Meanwhile, the U.S. Dollar Index is up about +0.1% higher to $98.70.