Stock Market Update

[BRIEFING.COM] The major indices are trading higher across the board. Gains range from 0.3% to 1.0% following pleasing earnings results from Dow component Salesforce (CRM 358.77, +27.33, +8.3%). The company sparked renewed enthusiasm in the AI sector with optimistic comments about its Agentforce AI system for enterprises.

Mega caps and semiconductor-related share are showing strength, boosting the broader equity market. These stocks are benefitting from the AI optimism, along with ongoing momentum after a solid week thus far. The Vanguard Mega Cap Growth ETF (MGK), up 1.3% today, sits on a 2.8% gain this week. The PHLX Semiconductor Index (SOX), up 1.6% for the session, shows a 3.9% gain since last Friday. 

Dropping market rates have also supported the upside bias in stocks. The 2-year Treasury yield, which had reached 4.21% earlier, has dropped to 4.13%, while the 10-year yield, which had climbed to 4.28%, is now at 4.20%. 

The price action in Treasuries follows today’s economic data, which showed weaker-than-expected figures for both the ADP Employment Change and the ISM Service PMI for November. The disappointing reports helped trigger the reversal in rising Treasury yields, reinforcing the market's expectation that the Federal Reserve will cut rates by 25 basis points at its December 17-18 meeting.

Buying interest hasn't been totally broad-based as evidenced by a 0.1% decline in the Invesco S&P 500 Equal Weight ETF (RSP). Also, six of the 11 S&P 500 sectors trade lower. The energy sector is the worst performer by a wide margin, down 2.6% amid falling oil prices ($68.85/bbl, -1.09, -1.6%). The heavily-weighted financial sector also underperforms the index, down 0.6%.

Meanwhile, the information technology sector leads the index, up 1.5%.

Reviewing today's economic data: 

• Weekly MBA Mortgage Applications Index 2.8% vs Briefing.com consensus of ; Prior was revised to 6.3% from
• November ADP Employment Change 146K (Briefing.com consensus 170K); Prior was revised to 184K from 233K
• November S&P Global US Services PMI - Final 56.1; Prior 55.0
• November ISM Non-Manufacturing Index 52.1% (Briefing.com consensus 55.5%); Prior 56.0%
  • The key takeaway from the report is that tariff concerns were mentioned often among respondents considering their outlooks.
• October Factory Orders 0.2%; Prior was revised to -0.2% from -0.5%
  • The key takeaway from the report is that factory orders picked up following declines in the previous two months.