Note: Our nightly “S&P 500 Outlook, Forecast, and Trading plan for Wednesday, 08/29” will be posted around 8:30am EDT, Wednesday.

THE GIST (“THE WHAT”)

Charting new highs for the third straight session, the S&P 500 index crossed the 2900 mark for the first time, buoyed by Jerome Powell’s positive economic outlook last week coupled with a relief on the trade war front. Gains were, however, limited as investors remain cautious ahead of the trade talks between the U.S. and Canada after the Trump administration entered into a preliminary trade deal with Mexico to replace NAFTA.
Opening the session higher backed by strong Consumer Confidence index that rose to an 18-year high, the index pulled back on registering the day’s high at 2903.77. Swinging between small gains and losses, the index closed near session lows, mostly unchanged at 2897.52, up a slight 0.78 points as gains in Real Estate and Technology sectors were offset by weakness in Energy and Telecommunication sectors. Seven out of the eleven primary sectors ended the session lower.

THE DETAILS (The “How & Why”):

Real Estate sector led the day’s advances, up 1.19%, with majority of its components ending the session higher. The S&P/Case-Shiller national index for the month of June indicated a slowdown in growth of home-prices. While lack of inventory has been supporting the home prices, demand for new and existing homes have been weighed down by rising interest rates.
Qualcomm Inc. rose 3.62%, leading the Technology sector higher by 0.21% after announcing a $5.1 billion stock buyback plan. While the broader Consumer Discretionary closed the session slightly higher by 0.18%, Best Buy Co Inc. was the worst performer in today’s session, losing 5.01% on disappointing third quarter outlook.
On the other hand, dividend-paying Telecommunications, Consumer Staples and Utilities shed 0.48%, 0.32% and 0.21% respectively. Treasury yields climbed to hit a 2-week high on the back of easing trade tensions. Continued strength in the economy indicated by the Consumer Confidence Index further lifted the yields higher. The 10-year Treasury bond yield settled at 2.88%, up 3 basis points.  
Oil prices reversed some of their recent gains, sending the Energy sector lower by 0.45%. The broader Materials sector also reversed some of its recent gains as uncertainty around trade policies weighed down on commodities and metal prices.