Stock Market Update

[BRIEFING.COM] Stocks are rebounding from Thursday's broad retreat, with the S&P 500 (+0.5%), Nasdaq Composite (+0.6%), and DJIA (+0.7%) holding solid gains shortly after midday. Participation is considerably stronger than the headline averages suggest, as all but one S&P 500 sector trades higher and strength extends to small- and mid-cap stocks.

The materials sector (+2.1%) leads by a wide margin as the continued surge in precious metals fuels strong gains across mining stocks, including Albemarle (ALB 143.50, +9.31, +6.94%), Freeport-McMoRan (FCX 76.19, +4.97, +6.98%), and Newmont Corporation (NEM 131.98, +4.34, +3.40%).

The health care sector (+1.5%) is another source of strength, with Moderna (MRNA 150.50, +17.18, +12.89%) rebounding after giving back a portion of Wednesday's massive cancer-vaccine-driven rally yesterday.

Meanwhile, the financials sector (+0.9%) is benefiting from strength across banking names and another surge in crypto-related stocks. Robinhood Markets (HOOD 107.80, +12.70, +13.35%) and Coinbase Global (COIN 186.90, +14.55, +8.44%) rank among the best-performing S&P 500 components as Bitcoin extends its strong run this week.

Several company-specific catalysts are adding support within the consumer discretionary sector (+0.9%). Tesla (TSLA 364.58, +19.45, +5.64%) is a standout after Nevada approved robotaxi services in Clark County, while Target (TGT 163.64, +5.38, +3.40%) has extended its post-earnings rally to a new multi-year high. Ross Stores (ROST 242.16, +13.17, +5.75%) is also moving firmly higher following its earnings report.

Mega-cap stocks are generally participating in the rebound as well. Alphabet (GOOG 343.20, +5.00, +1.48%) and Meta Platforms (META 552.43, +6.60, +1.21%) are helping lift the communication services sector (+1.1%), while the Vanguard Mega Cap Growth ETF is up 0.4%.

Semiconductors remain the main exception to the broader strength. The PHLX Semiconductor Index (-1.0%) is near its lowest level in almost three weeks and has fallen 5.9% this week, leaving the information technology sector near unchanged despite a better showing from software stocks. The iShares Expanded Tech-Software Sector ETF is up roughly 1.6%, reflecting some improvement in another area of technology that came under pressure earlier this week.

The DJIA's relatively limited semiconductor exposure is helping it outperform, particularly as several of its financial and other cyclical components participate in today's rebound. The utilities sector (-1.5%) is the only S&P 500 sector trading lower, while the Russell 2000 (+0.7%) and S&P MidCap 400 (+0.4%) are also higher.

Crude oil is little changed following yesterday's sharp increase, while Treasury yields are slightly higher across the curve. Neither has presented a significant obstacle so far, allowing a broad mix of financial, commodity-linked, consumer, and mega-cap stocks to recover some of Thursday's losses even as semiconductor weakness continues to restrain the technology-heavy averages.

Reviewing today's data:

• Flash August S&P Global U.S. Services PMI checked in at 56.8, from the prior reading of 54.6.
• Flash August S&P Global U.S. Manufacturing PMI came in at 53.2, from the previous level of 53.9.