Market Overview
Today's trading session exhibited a negative bias throughout the day. Major indices faced slight declines initially, which intensified in the afternoon. The S&P 500 concluded 1.0% lower, while the Nasdaq Composite fell by 1.2%. The Dow Jones Industrial Average saw a 0.9% decline, and the Russell 2000 ended with a 0.8% loss.
Stock Performance
- Meta Platforms (META) dropped 1.9% to 584.88, despite being up earlier by 1.2%.
- Broadcom (AVGO) decreased by 0.9% to 175.08 after an initial rise of 0.9%.
- Apple (AAPL) fell by 2.3% to 221.69 following a downgrade to Hold from Buy at Jefferies.
- Amazon.com (AMZN) declined 3.0% to 180.88 due to a downgrade to Equal Weight from Overweight at Wells Fargo.
Market Influences
The sell-off was partly driven by profit-taking after a recent strong performance. Major indices were near record highs, buoyed by a robust September jobs report. Additionally, geopolitical concerns regarding potential tensions between Israel and Iran contributed to the negative sentiment. This led to a significant rise in oil prices, with WTI crude oil futures climbing 3.7% to $77.18 per barrel. The price increase was also influenced by Hurricane Milton intensifying to a Category 5 storm.
Sector Performance
- The S&P 500 energy sector was the only one to close higher, gaining 0.4%. Chevron (CVX) rose 0.3% to 151.13 after selling interests in the Athabasca Oil Sands Project and Duvernay Shale for $6.5 billion.
- The utilities sector faced the largest decline, falling 2.3%.
- The communication services sector dropped by 2.0%.
Interest Rates
Rising market rates also contributed to the equity sell-off. The 10-year yield increased by five basis points to 4.03%, and the 2-year yield rose by seven basis points to 4.00%.
Year-to-Date Performance
- Nasdaq Composite: +19.4%
- S&P 500: +19.4%
- Dow Jones Industrial Average: +11.3%
- S&P Midcap 400: +11.3%
- Russell 2000: +8.2%
Economic Data Review
In August, consumer credit increased by $8.9 billion, below the consensus of $12.7 billion, following a revised increase of $26.7 billion in July. The key takeaway is the decline in revolving credit, indicating increased consumer caution.
Today's News
Super Micro Computer (SMCI, Financial) shares surged over 15% following the announcement of significant AI server deployments. The company revealed it has recently deployed more than 100,000 GPUs with its liquid cooling solutions for major AI factories and cloud service providers, boosting investor confidence in its innovative technology offerings.
Google (GOOG, Financial) is appealing a court ruling in favor of Epic Games, arguing that the proposed changes to the Android and Google Play ecosystem could compromise user privacy and security. Google contends that these changes, intended to allow third-party app installations, may reduce competition and negatively impact consumer experience.
Nvidia (NVDA, Financial) shares rose nearly 4% as anticipation builds for CEO Jensen Huang's keynote at the Consumer Electronics Show in January 2025. Investors are eager for potential announcements regarding the GeForce RTX 50 series, which could highlight Nvidia's continued leadership in GPU technology.
Scholar Rock Holding Corp. (SRRK, Financial) saw its shares skyrocket by 335% after its spinal muscular atrophy treatment, apitegromab, met primary endpoints in a phase 3 trial. The promising results have paved the way for regulatory submissions in the U.S. and Europe.
ExxonMobil (XOM, Financial) continued its upward trajectory, marking a seventh consecutive session of gains amid rising oil prices driven by Middle East tensions. The stock has benefited from the recent surge in Brent Crude prices due to geopolitical concerns.
Occidental Petroleum (OXY, Financial) also experienced gains, closing higher for the seventh straight session. The company is capitalizing on the current oil market dynamics, supported by recent funding for its carbon dioxide sequestration projects.
Pfizer (PFE, Financial) shares climbed nearly 3% after activist investor Starboard Value acquired a significant stake in the company, pushing for strategic changes. This move reflects growing investor interest in Pfizer's potential for operational improvements.
Lockheed Martin (LMT, Financial) reached an agreement with the U.S. Department of Defense to address software and hardware upgrades for its F-35 jets. The deal involves a substantial investment to enhance the Pentagon's testing facilities, aiming to deliver upgraded jets by year-end.
Black Diamond Therapeutics (BDTX, Financial) announced a corporate restructuring to focus on its lead oncology program, BDTX-1535. The company aims to extend its cash runway into 2026, despite a postmarket decline in its stock price.
Allstate (ALL, Financial) and other insurance stocks faced declines as Hurricane Milton approaches Florida, raising concerns about increased claims. The impending storm has prompted significant evacuation preparations in the state.
Charles Schwab's (SCHW, Financial) Trading Activity Index showed a significant drop as retail investors de-risked amidst market volatility and a recent Federal Reserve rate cut. This divergence highlights the cautious stance of investors despite broader market gains.
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