THE GIST (“THE WHAT”)
Oscillating around 4200 level for most part of the trading session, the S&P 500 index closed the choppy session unchanged at 4205.53, up marginally by 0.09 point as the initial euphoria over a tentative debt agreement faded amid worries of a reduction in federal spending and chances of a Fed rate hike.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Debt Ceiling Deadline Likely to Whipsaw the Markets
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THE DETAILS (The “How & Why”):
The S&P 500 closed the choppy session flat, albeit near its highest level since August 2022. Reports of a tentative agreement between the White House negotiators and Republican leaders to suspend the debt ceiling until January 2025 boosted the markets overnight. Euphoria, however, faded amid worries of a cap on federal spending for the next two years. Investors will be closely monitoring the ongoing negotiations with the House expected to vote on the bill tomorrow before it goes to the Senate for a vote.
Bond yields moved lower following a mixed bag of economic data, boosting tech stocks further. The 10-year Treasury bond rate settled at 3.690%, down 10.8 basis points. NVIDIA added to last week’s strong gains, jumping 3% and closing just shy of a $1 trillion market cap backed by expectations that the chip maker could experience a surge in demand for its AI chips. Qualcomm also jumped 5% after the chip maker hinted that it is benefitting from a spike in demand for its AI-capable products.
Weakness in energy stocks, however, limited the day’s gains in the overall market. Oil prices hit $70/barrel amid growing recessionary jitters and a fading China reopening story. Devon Energy, Coterra Energy and Marathon Oil closed the session by more than 1%.