Dow +337.28 at 43077.70, Nasdaq +51.49 at 18367.08, S&P +27.21 at 5842.47
The stock market had a solid showing today. The Russell 2000 continued its recent outperformance, jumping 1.6%, bringing its weekly gain to 2.5%. The S&P 500 (+0.5%), Nasdaq Composite (+0.3%), and Dow (+0.8%) settled with solid gains near their highs of the day.
The influential financial sector (+1.2%) played a leadership role today after earnings news from the space received positive responses. Morgan Stanley (MS 119.51, +7.29, +6.5%), First Horizon (FHN 17.39, +0.68, +4.1%), and Synchrony Financial (SYF 56.52, +3.23, +6.1%) are among the standouts in that respect.
Rebound action in some semiconductor-related names after yesterday’s sharp selling also contributed to the upside bias today and buy-the-dip interest in other market areas. NVIDIA (NVDA 135.72, +4.12, +3.1%) and Broadcom (AVGO 176.82, +0.84, +0.5%) were top performers from the PHLX Semiconductor Index (SOX), which settled 0.2% higher.
Many stocks participated in today’s advance. At the NYSE, advancers led decliners by a 4-to-1 margin and by a nearly 3-to-1 margin at the Nasdaq.
The results of corporate Q3 earnings may determine the near-term direction of stocks. According to Bloomberg Intelligence, companies in the S&P 500 are expected to report an average +4.3% increase in quarterly earnings in Q3 from a year ago, down from +7.9% growth projected in July.
The markets are discounting the chances of a -25 bp rate cut at the November 6-7 FOMC meeting at 95% and a -50 bp rate cut at that meeting at 0%.
Seasonally, this should be a good time for the market; however, not necessarily in an election year, so we must take it one day at a time.
Fun factoid……
Nvidia, $NVDA, now has a market cap that equals 11.7% of the total US GDP. To put this into perspective, even at the peak of the Dot-com bubble, Cisco’s market cap equaled just 5.5% of US GDP. In other words, Nvidia is now worth more than DOUBLE what Cisco was worth at its peak as a % of GDP. Over $10 TRILLION of market cap has been created since AI-hype began. Markets are betting that AI truly is the next big thing. Will they be proven correct?