Market Overview
The stock market experienced a rally today, pushing the S&P 500 up by 0.7% and the Dow Jones Industrial Average by 1.0%, reaching new record highs. This positive movement was driven by ongoing momentum from yesterday's bounce, as well as strength in mega-cap and semiconductor-related stocks.
Alphabet (GOOG, Financial) did not join the rally due to news that the Department of Justice is considering a breakup of Google. However, most other stocks moved upwards, with 28 of the 30 Dow components closing higher and nine of the 11 S&P 500 sectors closing above their previous levels.
Sector Performance
- The health care and information technology sectors, both up by 1.0%, were the top performers today. Together, they make up 43% of the index.
- The real estate sector, sensitive to interest rates, saw the largest decline, falling by 0.9% as yields rose.
Bond Market
The 10-year yield increased by three basis points to settle at 4.06%, and the 2-year yield also rose by three basis points to 4.01%. This followed a 10-year note auction where the high yield slightly tailed the when-issued yield amid solid demand from indirect bidders.
Federal Reserve Insights
The market showed little reaction to the minutes from the September 17-18 FOMC meeting, which contained no surprises. The minutes revealed that almost all participants saw diminished upside risks to the inflation outlook, while downside risks to employment were perceived as having increased. Dallas Fed President Logan, a non-FOMC voter, expressed concern that inflation could remain above the Fed's 2% target and advised against rushing to achieve a "normal" or "neutral" funds rate.
Global Concerns
Despite ongoing concerns about the Middle East and Hurricane Milton, the market remained unperturbed today.
Year-to-Date Index Performance
- Nasdaq Composite: +21.9%
- S&P 500: +21.4%
- Dow Jones Industrial Average: +12.8%
- S&P Midcap 400: +12.1%
- Russell 2000: +8.6%
Economic Data Review
- Weekly MBA Mortgage Applications Index fell by 5.1%, compared to a prior decline of 1.3%.
- August Wholesale Inventories increased by 0.1%, slightly below the consensus of 0.2%, and down from a prior 0.2% increase.
- Weekly EIA crude oil inventories rose by 5.81 million barrels, following last week's increase of 3.89 million barrels.
Upcoming Data
Market participants are expecting significant data releases tomorrow, including the weekly jobless claims report and the September CPI report at 8:30 ET.
Today's News
Rio Tinto (RIO, Financial) has agreed to acquire Arcadium Lithium (ALTM, Financial) for $6.7 billion, positioning itself as the world's third-largest lithium miner. This acquisition is expected to enhance Rio Tinto's capabilities in battery-grade lithium processing. The news has positively impacted shares of other lithium mining companies like Albemarle (ALB, Financial) and SQM (SQM, Financial), while Rio Tinto's shares saw a minor decline.
Bentley Systems (BSY, Financial) has partnered with Google (GOOGL) to integrate Google's geospatial content with Bentley’s infrastructure engineering software. This collaboration will enhance Bentley's digital twin platform by providing real-world geospatial context and immersive 3D experiences. Shares of Bentley rose slightly following the announcement.
UBS analysts have released their top and bottom stock picks using a "quantamental" model. Communication services, financials, and telecommunications sectors scored high, while semiconductors and consumer services ranked low. The model suggests resilience in real estate and an optimistic outlook for healthcare and consumer discretionary sectors.
Costco (COST, Financial) reported a year-over-year increase in net sales for September, driven by strong comparable sales growth and a significant rise in e-commerce sales. The company noted an unusual boost in sales due to consumer activity related to Hurricane Helene and port strikes.
Google (GOOGL) has also entered a cloud computing agreement with Sequoia Capital, offering significant cloud credits to Sequoia-backed AI startups. This initiative is part of Google's strategy to support AI development and leverage its cloud infrastructure.
Qualcomm (QCOM, Financial) has appointed HP's CFO Marie Myers to its board of directors, strengthening its audit committee. The appointment comes as Qualcomm seeks to enhance its governance and strategic oversight.
Apple (AAPL, Financial) executive Dan Riccio, who has been instrumental in developing the Vision Pro mixed reality headset, is set to leave the company. His departure marks a significant change in Apple's hardware leadership.
Robinhood Markets (HOOD, Financial) announced that its retirement savings business has reached $10 billion in assets under custody. The company has been actively promoting its IRA with a match program, contributing to this growth.
10x Genomics (TXG, Financial) reported a slight decrease in preliminary third-quarter revenue, leading to a significant drop in its share price. The company continues to face challenges in achieving profitability.
GuruFocus Stock Analysis
- The S&P 500 and Dow Jones Surged to New Highs, Fueled by "Magnificant 7" Stocks by Nauman Khan
- AMD Stock Climbs as Anticipation Builds for Upcoming AI Event by Nauman Khan
- Lower Oil Prices Allegedly Drag Energy Stocks Today by Shanti Putri
- Mid-Range Power: NVIDIA's RTX 4060 Series Captures Gamers' Hearts and Market Share by Nauman Khan
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