Stock Market Update

[BRIEFING.COM] The stock market entered today with a rebound on its mind, and that is precisely what it achieved, making up the entirety of yesterday's losses and then some. There wasn't a news trigger for the early gains, yet that changed in the early afternoon when Bloomberg reported that Treasury Secretary Bessent said he expects the China tariff situation to de-escalate.

That news fostered some hope that the current trade impasse between the U.S. and China will get resolved, although it would be remiss not to add that negotiations haven't even started and that there was no substance to today's comments. It was simply a change in tone that registered for a market that was already up sharply. In fact, the vast majority of today's gains were logged before the Bessent report.

The initial rally effort was aided by short-covering activity and contrarian-minded buying interest driven by reports of a pervasive bearish mindset. To that end, the level of bearish sentiment among individual investors has exceeded 50% for eight straight weeks, which is the longest such streak for records dating back to 1987, according to the American Association of Individual Investors.

The rebound bid also gathered momentum with the U.S. Dollar Index (+0.7% to 98.97) rallying and the 10-yr note yield sliding two basis points to 4.39% despite a weak 2-yr note auction. Those moves took a little of the edge off the "sell America" trade that seemingly undid the market in Monday's trade when the Dow, Nasdaq, and S&P 500 declined 971, 415, and 124 points, respectively.

The mega-cap stocks were key drivers of the broader market today, paced by Tesla (TSLA 237.97, +10.47, +4.6%) ahead of its earnings report after today's close. Notably, they weren't the only drivers -- far from it. Advancers trounced decliners by a nearly 9-to-1 margin at the NYSE and by a better than 4-to-1 margin at the Nasdaq.

The market cap-weighted S&P 500 and equal-weighted S&P 500 both finished up 2.5%. Moreover, all 11 S&P 500 sectors logged solid gains. Eight sectors were up at least 2.1%.

The biggest movers were the financial (+3.3%) and consumer discretionary (+3.2%) sectors. The industrials sector (+1.8%) was a relative laggard, held back somewhat by losses in Northrop Grumman (NOC 464.00, -67.33, -12.7%) and RTX Corp (RTX 113.90, -12.14, -9.6%) following their earnings reports.

There was no U.S. economic data of note today.

• Dow Jones Industrial Average: -7.6% YTD
• S&P 500: -10.1% YTD
• S&P Midcap 400: -11.9% YTD
• Nasdaq Composite: -15.6% YTD
• Russell 2000: -15.2% YTD

A look at Wednesday's economic data:

• 07:00 ET: Weekly MBA Mortgage Index (prior -8.5%)
• 09:45 ET: Flash April S&P Global US Manufacturing PMI (prior 50.2) and flash S&P Global US Services PMI (prior 54.4)
• 10:00 ET: March New Home Sales (Briefing.com consensus 684,000; prior 676,000)
• 10:30 ET: Weekly crude oil inventories (prior +515,000)