Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.5%), and DJIA (-0.3%) once again opened to relatively wide losses, though a midmorning rally in the information technology sector (+1.1%) expanded into a solid rebound effort. 

While mega-caps continued to weigh on the market at the open, the technology sector's losses in particular were modest in comparison to the broader market. This morning's opening retreat saw the S&P 500 and Nasdaq Composite slip below their 50-day moving averages, with the rally in tech helping to push the indexes back above the critical support levels. 

Chipmakers helped prompt the rebound, with Micron (MU 253.98, +17.03, +7.19%) showing strength from the open after being named a top stock pick by Morgan Stanley.

Applied Materials (AMAT 222.86, -0.37, -0.16%), which is a crucial supplier of chipmaking materials, reversed a 6.0% loss after topping earnings estimates but issuing guidance that predicts revenue to be weighted towards the back half of next year. 

The PHLX Semiconductor Index is now up 0.9% after briefly dipping below its own 50-day moving average early in the session. 

NVIDIA (NVDA 189.72, +2.86, +1.53%), in turn, was one of the first mega-caps to enter positive territory today, opening the doors to a solid rebound effort in the broader market.

Tesla (TSLA 409.14, +7.16, +1.78%) is another top performer, helping the Vanguard Mega Cap Growth ETF (+0.7%) see positive territory for the first time in several sessions. 

The advance is not just limited to the market's largest names either. Seven S&P 500 sectors now hold a gain after all eleven spent time in negative territory this morning. 

With the exception of the technology (+1.1%) and energy (+1.3%) sectors, gains are rather modest, but so are the losses of today's remaining laggards. The materials sector (-0.7%) and communication services (-0.6%) sectors are the only ones to still hold losses wider than 0.5%. 

Decliners now outpace advancers by a roughly 7-to-6 clip on the NYSE, and that clip is even slimmer on the NASDAQ. Decliners held a greater than 2-to-1 advantage on both exchanges earlier in the session. 

On the macro front, the market received some more hawkish Fed commentary, this time from Kansas City Fed President Jeffrey Schmid (voting FOMC member). Mr. Schmid said that he does not see additional interest rate cuts as potentially beneficial to the cracks in the labor market but worries they could have "long-lasting effects" on inflation.

The CME FedWatch tool now assigns just a 43.6% probability to a 25-basis point rate cut in December, down from 50.1% yesterday and 94.4% a month ago. 

While rate-cut odds continue to slip, the market largely reconciled with the notion it may not get another cut in yesterday's retreat, with investors more focused on buying the dip in semiconductors and other momentum areas, helping return the major averages into positive week-to-date territory.