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Mega-cap leadership and rate cut optimism fuel record highs

The stock market posted a broadly positive week, led by gains in the tech-heavy Nasdaq Composite (+2.0%) and the S&P 500 (+1.6%), while the Dow Jones Industrial Average (+1.0%) and smaller-cap indices finished with more modest results. 

The Russell 2000 (+0.3%) and S&P MidCap 400 (-0.4%) underperformed, highlighting the market’s reliance on mega-cap strength. The S&P 500 Equal Weight Index (+0.3%) lagged the market-weighted index, further underscoring the influence of the largest components.

The information technology sector (+3.1%) was the standout sector this week, fueled by strong moves in the mega-cap cohort and broad optimism in semiconductor names.

Oracle’s (+25.5%) remarkable mid-week surge following its RPO update propelled the technology sector and created volatility across the “magnificent seven,” emphasizing the outsized influence of single company moves. Tesla (+12.9%) and Broadcom (+7.5%) were among other notable mega-cap moves. In other corporate news, Paramount Skydance’s (+25.3%) potential acquisition of Warner Bros. Discovery (+55.8%) propelled both stocks higher despite regulatory concerns.

Economic data reinforced expectations of a continued easing cycle. While the August PPI print came in slightly hotter than expected (0.4%; Briefing.com consensus: 0.3%), and Core CPI met expectations at 0.3%, a 27,000 spike in initial jobless claims to 263,000 (Briefing.com consensus: 240,000), their highest level since October 2021, bolstered the market's current rate cut expectations through the end of the year.

Overall, the combination of strong technology leadership, encouraging rate cut expectations, and select corporate news allowed the S&P 500, Nasdaq Composite, and DJIA to all set record highs this week, even as pockets of weakness persisted.

  • Nasdaq Composite: +2.0% WTD
  • S&P 500: +1.9% WTD
  • DJIA: +1.0% WTD
  • Russell 2000: +0.3% WTD
  • S&P Mid Cap 400: -0.4% WTD

 

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Past performance is not a guarantee of future results. Indices are unmanaged and one cannot invest directly in an index. Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Data and rates used were indicative of market conditions as of the date shown and compiled by Briefing.com. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

Park Avenue Securities LLC (PAS) is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a registered broker/dealer offering competitive investment products, as well as a registered investment advisor offering financial planning and investment advisory services. PAS is a member of FINRA and SIPC.

Provided by Briefing.com.

8076115.13 (Exp. 12/25)

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