Tech Optimism Shines Over Big Bank Gloom – US Market Wrap

A rally in the world’s largest technology companies boosted stocks, countering a slew of cautious comments from American bank executives that sent financial shares tumbling.

The S&P 500 finished higher after a volatile session. Tesla Inc. led megacap gains following a bullish analyst call. Oracle Corporation reached an all-time high. Bank of America said its investment banking results will be lower than some Wall Street analysts expected. JPMorgan also tempered its earnings expectations. Earlier this week, Goldman Sachs Group indicated that its trading unit is on track to fall 10% from the previous year.

Traders also assessed election risk ahead of the first debate between former President Donald Trump and Vice President Kamala Harris. The match-up promises more clarity for investors who have already spent months parsing campaign-trail language about tax proposals, tariff projections, government spending plans, and policies on energy, electric vehicles, health care, and other topics.

In the run-up to the consumer price index, a 22V Research survey revealed that 56% of respondents believe core inflation is on a “Fed-friendly glide path”. Meanwhile, the share of investors expecting a recession has remained high. Approximately 48% of investors polled expect the reaction to CPI to be “mixed/negligible,” with 32% saying “risk-on” and only 20% saying “risk-off.”

The S&P 500 increased by 0.4%. The Nasdaq 100 gained 0.9%. The Dow Jones Industrial Average declined 0.2%. A Bloomberg gauge of the “Magnificent Seven” megacaps rose 1.5%. The Russell 2000 index of small businesses showed little change. The KBW Bank Index declined 1.8%.

Treasury 10-year yields fell six basis points, to 3.64%. Brent futures fell below $70 as oversupply fears intensified.