Stock Market Update

[BRIEFING.COM] The stock market opened to decent gains across its mega-cap names on the heels of Friday's strong session, but a lack of follow-through buying activity saw the S&P 500 (+0.3%) and Nasdaq Composite (+0.5%) close beneath their session highs, though the DJIA (+0.2%) reversed an early loss. 

The Vanguard Mega Cap Growth ETF finished with a modest 0.4% gain after holding a gain close to 1.0% early in the session, and the S&P 500 Equal Weighted Index (+0.3%) performed in line with the market-weighted S&P 500 (+0.3%). 

The information technology sector (+0.5%) led all S&P 500 sectors for the majority of the session but ended up with a gain similar to that of the financials (+0.5%), consumer discretionary (+0.6%), and materials (+0.4%) sectors. 

Chipmakers led the early rally, pushing the PHLX Semiconductor Index to an early 1.4% gain before retreating and closing just 0.2% above its baseline. NVIDIA (NVDA 181.88, +3.69, +2.07%) still closed with a nice gain, moving further past its 50-day moving average (176.74). 

The sector also benefitted from strong performances from memory chip names such as Western Digital (WDC 116.74, +9.86, +9.23%) and Seagate Tech (STX 229.14, +11.63, +5.35%), which were among the top performers in the S&P 500 today. 

In total, nine S&P 500 sectors closed in positive territory, though only the consumer discretionary sector (+0.6%) advanced more than 0.5%. 

Breadth figures were razor thin for the entirety of today's action, reflecting a lack of conviction on the part of both buyers and sellers amid a relatively quiet day from a headlines perspective. Decliners outpaced advancers by a roughly 7-to-6 margin on the NYSE, while advancers held a 6-to-5 edge on the Nasdaq. 

The energy sector (-1.9%) was the outlier in today's trade, moving sharply lower as crude oil futures settled the session $2.21 lower (-3.4%) at $63.48 per barrel following reports that OPEC+ will likely increase outputs in November. 

The communication services sector (-0.5%) also closed lower due to weakness in Alphabet (GOOG 244.36, -2.82, -1.14%) and Meta Platforms (META 743.40, -0.35, -0.05%) as mega-cap strength waned throughout the session.

The sector was, however, home to one of the more exciting corporate headlines today, as Electronic Arts (EA 202.05, +8.70, +4.50%) announced the company will be taken private in an all-cash deal worth roughly $55 billion. Shareholders are set to receive $210 per share in cash, a 25% premium to EA's unaffected $168.32 close on Sept. 25.

Macro-headlines today were also relatively slim, with much of the focus centering around the looming government shutdown if a funding agreement is not reached. 

Senator Majority Leader John Thune says the Senate will vote again tomorrow on a continuing resolution to fund the government for 7 weeks, with Reuters adding that Senate Democrats are weighing short-term funding measures to avert a shutdown ahead of the Tuesday deadline.

According to CNBC, a government shutdown would halt Labor Department operations, preventing the release of Friday's much-anticipated Employment Situation Report. With conflicting views around the appropriate monetary policy path, notable economic data releases take on added significance ahead of the October FOMC meeting.

The market's current rate cut expectations held steady amid a lack of data releases today, though Cleveland Fed President Beth Hammack (FOMC nonvoting member) told CNBC that the current environment is "a challenging time for monetary policy."

U.S. Treasuries began the week on a firmly higher note with longer tenors leading the market higher. The 2-year note yield settled down two basis points to 3.63%, and the 10-year note yield settled down five basis points to 4.14%.

• Nasdaq Composite: +17.0% YTD
• S&P 500: +13.3% YTD
• Russell 2000: +9.2% YTD
• DJIA: +8.9% YTD
• S&P Mid Cap 400: + 4.5% YTD

Reviewing today's data:

• Pending Home Sales were up 4.0% in August (Briefing.com consensus 0.4%) after decreasing a revised 0.3% (from -0.4%) in July.