Stock Market Update

[BRIEFING.COM] The major averages hold solid gains at midday, bouncing back from two consecutive lower sessions as easing pressure from the week's primary headwinds has allowed buying interest to spread across much of the market. The S&P 500 (+0.5%), Nasdaq Composite (+0.4%), and DJIA (+0.4%) trade near their session highs, while the Russell 2000 (+0.9%) and S&P Mid Cap 400 (+0.6%) are also firmly higher.

Today's advance has developed gradually after a mixed open, with the market finding its footing as crude oil and Treasury yields avoided another sharp move higher. WTI crude is up $0.87 (+1.0%) to $91.09 per barrel but remains below its overnight high near $92, while the 10-year note yield is unchanged at 4.80% after reaching 4.82% overnight. The relative calm in both has provided some relief after their recent increases weighed heavily on equities.

The improvement is also considerably broader than the headline index gains alone suggest. Advancers lead decliners by roughly 2-to-1 on the NYSE and 5-to-3 on the Nasdaq, while nine of the 11 S&P 500 sectors trade higher. The S&P 500 Equal Weighted Index (+0.5%) is keeping pace with the S&P 500 (+0.4%) and Vanguard Mega Cap Growth ETF (+0.4%), reflecting solid participation beyond the largest stocks.

The materials sector (+1.6%) leads the sector standings behind strength in steel and other metals names, while the communication services sector (+1.3%) is another standout. Charter Comm (CHTR 157.29, +11.10, +7.59%) and Reddit (RDDT 154.82, +10.18, +7.04%) are among the top-performing S&P 500 components, with the sector's mega-cap components also providing solid leadership.

Technology stocks have also improved considerably from their mixed start. The information technology sector (+0.3%) has moved higher as the morning has progressed, aided by a 0.4% gain in the PHLX Semiconductor Index. NVIDIA (NVDA 226.46, +9.02, +4.15%) is a notable source of strength, climbing more than 4%.

Elsewhere in the information technology sector, Dell (DELL 457.06, +32.06, +7.54%) is the top-performing S&P 500 component following its better-than-expected earnings report. The company delivered a sizable earnings beat and raised its FY27 AI-Optimized Servers revenue outlook to $74 billion from $60 billion, providing another encouraging indication of continued strength in AI infrastructure demand.

Software remains a significant exception to the otherwise constructive action. The iShares Expanded Tech-Software Sector ETF is down 3.2% today, extending its week-to-date decline to 6.6% and leaving the group as one of the market's weakest areas this week. Palo Alto Networks (PANW 325.84, -36.25, -10.01%) is down double-digits despite beating Q4 expectations and issuing an above-consensus FY27 outlook, with the negative reaction appearing to reflect elevated expectations rather than a meaningful deterioration in the company's underlying performance. MongoDB (MDB 380.73, -53.48, -12.32%) is also a laggard after earnings, while Palantir Technologies (PLTR 168.24, -11.68, -6.49%) and CrowdStrike (CRWD 203.16, -11.91, -5.54%) add to the pressure across the group.

The utilities (-0.3%) and real estate (-0.8%) sectors are the only groups left in negative territory. PG&E (PCG 13.12, -0.94, -6.65%) and Edison (EIX 55.34, -3.46, -5.88%) are among the worst-performing S&P 500 components, reversing yesterday's gains that followed reports that the California Assembly will kill the recently agreed-upon wildfire liability plan. The proposed plan had been a source of concern for the utilities because it would not have allowed them to shift future wildfire costs to insurance.

Overall, the market is enjoying a broader rebound at midday as relative stability in crude oil and Treasury yields has eased some of the pressure that drove the week's early losses. Strength across most sectors and solid participation from smaller stocks have helped offset another difficult session for software, leaving the major averages near their best levels of the day.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 0.8%; Prior -1.0%
• August ADP Employment Change 38K (Briefing.com consensus 47K); Prior was revised to 46K from 44K
• July Factory Orders 0.9% (Briefing.com consensus 0.6%); Prior was revised to -0.2% from -0.3%
  • The key takeaway from the report is that factory orders were running at a good clip in July for durable and nondurable goods. Although business spending was flat, that was likely just a normal slowdown from the solid increases registered in May and June.