Stock Market Update

[BRIEFING.COM] The stock market is building on Monday's strong start to the week, with the S&P 500 (+0.7%) and Nasdaq Composite (+0.7%) reaching fresh all-time highs while the DJIA (+0.6%) keeps pace. The S&P Mid Cap 400 (+0.8%) is also participating in the advance, although the Russell 2000 (-0.2%) is a notable exception and has slipped below its flat line after trading higher earlier in the session.

Technology and mega-cap stocks remain important contributors, with the information technology sector (+0.9%) among today's leaders and the Vanguard Mega Cap Growth ETF up 0.7%. NVIDIA (NVDA 240.66, +1.76, +0.73%) is providing support to both groups while extending its recent run to fresh all-time highs, and the PHLX Semiconductor Index (+0.8%) is extending its recent strength after lagging the broader technology sector yesterday.

Several other semiconductor names are benefiting from AI-related developments. Marvell (MRVL 285.58, +14.33, +5.28%) is a standout after management raised its FY28 revenue outlook to $20 billion from $18 billion, primarily reflecting stronger optics and switching demand, while also outlining substantial longer-term opportunities across AI connectivity and custom silicon. Advanced Micro Devices (AMD 656.69, +24.94, +3.95%) is another notable winner after the company said it plans to increase supply in 2027 in response to strong demand for AI products, according to Reuters. Citi also raised its price target on AMD to $800 from $575 based on increased CPU demand from agentic applications.

Importantly, the strength is again extending well beyond the largest technology stocks. The S&P 500 Equal Weighted Index (+0.7%) is keeping pace with the cap-weighted S&P 500, continuing the improvement in broader participation that emerged during Monday's session. Ten S&P 500 sectors currently hold gains, providing another notable contrast to the narrow market leadership that had characterized recent weeks.

The utilities sector (+2.6%) is today's standout, driven by a surge in Constellation Energy (CEG 306.49, +38.87, +14.52%) following its 20-year power purchase agreement with Alphabet (GOOG 344.31, +0.48, +0.14%) supporting 890 MW of new nuclear capacity through upgrades at 11 existing units across six sites in the PJM grid. Other electric utility names, including Vistra Corp. (VST 161.40, +16.50, +11.39%) and NRG Energy (NRG 105.08, +8.28, +8.55%), are also among today's strongest S&P 500 performers.

Strength elsewhere is also broad, with the real estate (+1.4%), industrials (+1.2%), and consumer discretionary (+1.2%) sectors among the better-performing groups. The decline in Treasury yields is providing a more favorable backdrop for rate-sensitive stocks, with the 10-year note yield down four basis points to 5.27%, reversing some of the rate pressure that stocks largely shrugged off during Monday's advance.

At the other end of the standings, the health care sector (-0.1%) is today's laggard amid weakness in biotech stocks, including a sharp reversal in Moderna (MRNA 191.16, -12.05, -5.93%). The communication services sector (+0.1%) is another relative underperformer amid a subdued showing from Meta Platforms (META 741.87, -0.03, +0.00%) and Alphabet (GOOG 344.31, +0.48, +0.14%) today.

Crude oil has recovered from its overnight losses and is now hovering near its flat line amid unconfirmed reports of Houthi retaliation against Saudi Arabia.

Overall, today's record-setting advance is reinforcing the improvement in market participation that emerged yesterday. Mega-cap and semiconductor stocks continue to provide meaningful leadership, but the Equal-Weight S&P 500 is keeping pace with the cap-weighted index. The combination of broader participation and some relief from elevated Treasury yields has allowed the S&P 500 and Nasdaq to extend their recent momentum to fresh records.

Reviewing today's data: 

• The trade deficit widened in August to $105.6 billion (Briefing.com consensus: -$93.7 billion) from a downwardly revised $92.8 billion (from -$88.6 billion) in July. Exports were $4.5 billion more than July exports, but imports were $17.2 billion more than July imports.
  • The key takeaway is that demand for crude oil and semiconductors helped drive the increase in exports and imports and can be looked at in part as a good sign for global economic activity.