Stock Market Update

[BRIEFING.COM] The S&P 500 (+1.4%), Nasdaq Composite (+2.3%), and DJIA (+0.6%) have started the holiday-shortened week on solid footing. The Russell 2000 (+1.4%) and S&P Mid Cap 400 (+0.9%) hold similar gains.

The major averages are supported by strong performances across mega-cap names, which have the communication services (+3.1%), information technology (+2.2%), and consumer discretionary (+2.1%) sectors outperforming.

At one point this morning, those were the only three S&P 500 sectors to hold gains, though the broader market has perked up considerably, leaving just the consumer staples (-1.1%) and energy (-0.6%) sectors in negative territory. 

Stocks are supported by firming odds for a December rate cut. Fed Governor Christopher Waller (voting FOMC member) said he supports a rate cut in December but believes future easing will come on a meeting-by-meeting basis. The CME FedWatch tool assigns a 76.9% probability to a 25-basis point rate cut at the December FOMC meeting, up from 71.0% Friday.

The market's reaction has been decidedly positive so far. A 4.3% gain in the PHLX Semiconductor Index and a 2.3% gain in the Vanguard Mega Cap Growth ETF show a solid rebound in mega-cap and momentum names while the broader market lends solid support.