US equities closed mostly higher on Tuesday, with the Dow down slightly by 0.23%, while the S&P 500 gained 0.45% and the Nasdaq rose 0.84%. The Russell 2000 saw a modest decline of 0.02%. The markets extended Monday’s gains, which followed the biggest S&P 500 pullback since the SVB crisis. Big tech stocks, particularly Amazon and Tesla, led the way, while semiconductors and software also outperformed. However, there was mixed performance across sectors, with some notable underperformers in energy, financials, and materials.
Sector SPDR ETFs were led higher by XLRE, XLK and XLY, all three of which appreciated > 1.00% on the day. XLE, XLF, XLP and XLB were negative on the day as the tone was generally “risk-on” with investors of a mind to accumulate recent weakness.
Wednesday’s economic calendar has CPI reports hitting before the bell along with Hourly Earnings and Average Workweek reports.
Information Technology: Tech stocks continued to perform well, with big names like Amazon and Tesla leading the charge. Oracle (+11.4%) outperformed following strong fiscal Q1 results, beating revenue, margins, and FCF expectations, and reporting impressive 52% year-over-year RPO growth. The company’s MultiCloud agreement with AWS was particularly well received, adding to previous agreements with Azure and Google Cloud. Hewlett Packard Enterprise (-8.5%) saw a decline after announcing a $1.35B offering to fund its acquisition of Juniper Networks.
Consumer Discretionary: Notable gains were seen in Boot Barn Holdings (+9.9%), which reported stronger-than-expected preliminary Q2 comps driven by growth in store transactions. DraftKings (+1.4%) was upgraded to neutral at BNP Paribas Exane, contributing to gains. Meanwhile, Under Armour (-9.6%) declined after nearly doubling its expected restructuring charges to $140M-$160M, driven by additional charges related to exiting a primary distribution facility.
Financials: The banking sector faced headwinds, with Ally Financial (-17.6%) falling sharply after a negative Q3 update flagged intensified credit challenges. JPMorgan Chase (-5.2%) noted at a Barclays conference that 2025 NII expectations were too high, and its trading revenues were underperforming. Goldman Sachs (-4.4%) CEO Solomon announced that trading business is trending down by close to 10% in Q3, and the bank is running a larger capital buffer than usual.
Energy and Materials: Energy stocks underperformed, with WTI crude falling 4.3%, its lowest close since December 2021. Nutrien (-1.8%) was downgraded to neutral by Goldman Sachs, which highlighted potential risks in its retail segment due to increased bad debt expenses.
Industrials: Mission Produce (+21.5%) saw a significant boost after better-than-expected Q3 results, with analysts highlighting gains from cost structure improvements and a 36% increase in avocado prices. Meanwhile, Rubrik (-1.5%) reported strong Q2 results but saw its shares pressured by concerns over a lockup expiry. Boeing (-0.4%) faced pressure after Reuters reported delays in its 737 MAX production target. Meanwhile, Johnson Controls International (+2.5%) was upgraded at Bank of America due to its strong data center exposure and better-than-peers profitability.
Utilities & Real Estate: Equity Residential (+2.4%) was upgraded to buy at Deutsche Bank, which highlighted its coastal exposure and strong tenant demand, contributing to its gains.
Commodities: Copper ended the day down 1%, while gold settled up 0.4%. Despite gains in these precious metals, the commodity market continued to feel pressure from broader economic concerns.
Macroeconomic & Corporate Updates: The NFIB small business optimism index slipped to 91.2 in August, its 32nd straight month below the 50-year average. Fed Vice Chair for Supervision Barr provided an update on Basel III, reducing planned increases in capital requirements for large banks.
Eco Data Releases | Wednesday September 11th, 2024
S&P 500 Constituent Earnings Announcements | Wednesday September 11th, 2024
No S&P 500 Constituents report today
Data sourced from FactSet Data Systems
