Stock Market Update

[BRIEFING.COM] The stock market started the session in rally-mode, but buying faded by the close. The S&P 500 traded up as much as 1.3% at its session high before closing 0.6% higher than Friday. The Nasdaq Composite closed 1.2% higher while the Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.1%) closed with declines.

The S&P 500 and Nasdaq Composite benefitted from buying interest in the mega cap and chipmaker space, which also faded from initial levels. NVIDIA (NVDA 149.43, +4.96, +3.4%), which outperformed ahead of CEO Jensen Huang's keynote address at the Consumer Electronics Show (CES) tonight at 6:30 p.m. PST (9:30 p.m. ET), traded up as much as 5.3% at its high. 

NVIDIA's outperformance was also linked to AI enthusiasm after Foxconn reported a 15% yr/yr increase in record Q4 revenues. This enthusiasm was a driving factor in the initial move higher for the broader equity market, along with some technical support after the S&P 500 opened above its 50-day moving average (5,948) and maintained a posture above that level through the entire session. 

Buying interest dissipated due to choppy action in Treasuries, and after President-elect Trump said in a Truth Social Post that it was wrong of the Washington Post to suggest his tariff policy would be pared back. The 10-yr yield, which moved as low as 4.58% and as high as 4.64%, settled at 4.61%. 

Seven S&P 500 sectors closed lower while four settled higher. The rate-sensitive utilities (-1.1%) and real estate (-1.4%) sectors logged the largest losses. The communication services (+2.1%) and information technology (+1.4%) sectors closed at the top of the leaderboard, reflecting leadership from mega cap and chipmaker components. 

• Russell 2000: +1.6% YTD
• Nasdaq Composite: +2.9% YTD
• S&P 500: +1.6% YTD
• S&P Midcap 400: +1.1% YTD
• Dow Jones Industrial Average: +0.4% YTD

Reviewing today's economic data:

• Factory orders decreased 0.4% month-over-month in November (Briefing.com consensus -0.3%) following an upwardly revised 0.5% increase (from 0.2%) in October. Excluding transportation, factory orders rose 0.2% on the heels of a 0.2% increase in October. Shipments of manufactured goods edged 0.1% higher in November following a 0.2% decline in October.
  • The key takeaway from the report is that the weakness in factory orders was concentrated in the volatile transportation equipment space; otherwise, there was a modest pickup in order activity.
• December S&P Global US Services PMI 56.8 (prior 58.5) versus final reading of 56.1 for November. The dividing line between expansion and contraction is 50.0, and although the final December reading was revised down from the preliminary reading of 58.5, the final reading for December was above the final reading for November, indicating that the pace of expansion accelerated versus the prior month.

Looking ahead to Tuesday, market participants receive the following data: 

• 08:30 ET: November Trade Balance (Briefing.com consensus -$77.9B; prior -$73.8B)
• 10:00 ET: December ISM Services PMI (Briefing.com consensus 53.0%; prior 52.1%)
• 10:00 ET November JOLTS - Job Openings (prior 7.744M)