Note: Our nightly “S&P 500 Outlook, Forecast, and Trading plan for Thursday, 09/13” will be posted around 8:30am EDT, Thursday.

THE GIST (“THE WHAT”)

With no major catalyst to catapult it above the all-time highs registered in the last week of August, the S&P 500 index continues to be range bound, finding a strong support at January 2018 highs amid the trade tensions simmering in the background. While Technology stocks dragged the index lower as investors keenly watched Apple Inc. unveiling its new products, Industrials and Materials led the advances on optimism over the U.S. – China trade talks.
Struggling for direction, the index oscillated between small gains and losses as defensive sectors offset some of the Technology weakness. Paring early session losses on reports that the Trump administration has offered to resume trade talks with China, the index registered the day’s high at 2894.65 (less than 2 points above the upper bound of the levels indicated by our models for an ‘indeterminate’ bias. Click here to read the full report), but was dragged lower alongside a sharp decline in chip stocks, closing a choppy session flat at 2888.92, up by only 1.03 points.   

THE DETAILS (The “How & Why”):

Micron Technology Inc. was the worst performer in the index, losing 4.27% after Goldman Sachs downgraded the company, citing falling demand and rising cost pressures. The downgrade weighed down on other semiconductor stocks, including Lam Research Corp., KLA-Tencor Corp and Analog Devices Inc. that fell 3.24%, 2.58% and 2.39% respectively.
  
Apple Inc. traded lower for the day, losing 1.24% as investors digested the unveiling of its 3 new next-generation high-end iPhone products at its annual product launch event. Facebook Inc., Twitter Inc. and Alphabet Inc. shed another 2.37%, 3.69% and 1.55% respectively on concerns of rising governmental regulations over the industry. Meanwhile, offsetting some of these losses was a sharp 7.01% rise in Advanced Micro Devices Inc. after a Rosenblatt analyst raised the company’s price target and reiterated his ‘buy’ rating.
Financial sector was broadly lower by 0.89% alongside a slide in Treasury yields. Yields fell following a surprise decline in Producer Price Index (PPI), suggesting a taming inflation. Utilities stocks also extended their losses, down slightly by 0.13%.
Offsetting these declines were defensive sectors that benefited from falling yields. Telecommunications, Consumer Staples and Real Estate were higher by 1.51%, 1.23% and 0.15% respectively. Several retailers and tobacco stocks were strong gainers in today’s session. Altria Group Inc. soared 6.66% following an announcement by Food Drug and Administration (FDA) that it plans to ban all flavored e-cigarettes in an attempt to tame its growing popularity among teens.
Industrials and Materials were modestly higher on optimism over U.S. – China trade talks, closing the session higher by 0.35% and 0.29%. In an attempt to resolve their ongoing trade disputes and easing tensions, the Trump administration proposed another round of negotiations.  The dollar slid on the news, further benefiting these trade-sensitive sectors.
Energy and Health Care were the other notable gainers in today’s session, up 0.78% and 0.25% respectively. Oil prices soared to their highest level since May on reports of a decline in U.S. crude inventories by 5.3
million barrels last week, fueling the concerns of a tightening global supply.