Stock Market Update

[BRIEFING.COM] The stock market is showing mixed action, with the S&P 500 (+0.3%), Nasdaq Composite (+0.1%), and DJIA (+0.3%) holding modest gains shortly after midday. Tech stocks continue to outperform, though the gains are more muted than previous sessions and participation is mixed elsewhere, leaving the major averages in relatively narrow ranges as investors await this afternoon's FOMC decision and another consequential round of mega-cap earnings after the close.

The market opened with encouraging indications from semiconductor and AI infrastructure stocks following another round of strong earnings reports, but enthusiasm has been more selective than in the previous two sessions. The PHLX Semiconductor Index (+1.0%) continues to outperform, supported by gains in memory stocks following a strong earnings report from SK hynix Inc. (SKHY 163.70, +18.34, +12.61%), which highlighted robust AI-related demand and expectations for tight memory supplies in the coming years. Micron (MU 968.90, +40.14, +4.32%) and Sandisk (SNDK 1376.38, +71.54, +5.48%) are among the beneficiaries.

The broader information technology sector (+0.3%) is posting only a modest gain, however, as weakness among several mega-cap names offsets strength elsewhere. Microsoft (MSFT 526.96, -4.37, -0.82%) is among the laggards ahead of its earnings report this afternoon. Alphabet (GOOG 320.14, +3.31, +1.04%), meanwhile, is a notable outperformer ahead of its own results, helping keep the communication services sector (+0.2%) in positive territory.

Meanwhile, the energy sector (+0.9%) is among the strongest performers as crude oil prices surge amid renewed concerns about a potential escalation in the conflict with Iran. WTI crude futures are up $3.53 (+3.5%) to $103.43 per barrel, adding upward pressure to Treasury yields. The 10-year note yield has climbed to 5.03%, weighing on the real estate sector (-0.9%), while higher energy prices are also creating a headwind for consumer-facing stocks.

Stocks in the consumer discretionary sector (-0.4%) are under pressure, with Tesla (TSLA 401.37, -6.09, -1.49%) giving back some of yesterday's gains.

Elsewhere, earnings reactions are contributing to sizable moves within the health care and industrials sectors. The health care sector (+0.4%) has surrendered more than half of its earlier advance but remains higher, supported by strong post-earnings gains in Labcorp Holdings Inc. (LH 364.23, +33.06, +9.98%) and GE HealthCare (GEHC 76.15, +5.04, +7.09%). Biotechnology stocks are also outperforming, with the iShares Biotechnology ETF (IBB) up 1.5%, although Boston Scientific (BSX 42.89, -2.17, -4.82%) remains a notable laggard following disappointing guidance.

The industrials sector (+0.4%) has climbed to its best levels of the session as strength among its earnings winners increasingly offsets weakness elsewhere. Vertiv (VRT 236.30, +27.74, +13.30%) is the S&P 500's top performer following a substantial earnings beat and raised outlook, supported by accelerating demand for AI and data center infrastructure. Fortive (FTV 63.66, +2.04, +3.32%) is also posting a sizable gain, while C.H. Robinson (CHRW 129.17, -14.42, -10.04%), Old Dominion (ODFL 176.26, -10.77, -5.76%), and Lennox Int'l (LII 339.23, -32.82, -8.82%) are among the weakest S&P 500 stocks following their respective earnings reports.

Participation remains mixed, with six S&P 500 sectors trading higher but little momentum across the broader market. The Russell 2000 is flat, while the S&P Mid Cap 400 (+0.1%) is posting only a fractional gain.

The subdued trading comes ahead of this afternoon's FOMC decision, with investors widely expecting the Fed to leave interest rates unchanged but looking for further insight into the near-term policy outlook. Earnings reports from several mega-cap technology companies after the close will also provide an important test of the AI investment enthusiasm that has driven the market's rebound this week.

Reviewing today's data: 

• 10/24 MBA Mortgage Applications Index 3.4% (Prior -5.3%)
• Sep Adv. Intl. Trade in Goods -$134.9B (Briefing.com consensus -$128.7B; Prior -$132.1B revised from -$132.6B)
• Sep Adv. Retail Inventories 0.3% (Prior 0.3%)
• Sep Adv. Wholesale Inventories 0.6% (Briefing.com consensus 0.5%; Prior 0.5% revised from 0.7%)
• 10/24 EIA Crude Oil Inventories -1.892M (Prior -3.061M)