S&P 500 Holds Near Highs as New Grades Shift Key Names

Heading into the session on Wednesday, September 9, the U.S. stock market stands -1.5% from its all-time high. On Tuesday, September 8, the S&P 500 recorded -0.5%, leaving SPY to close at $765.96. Market breadth showed limited participation across large-capitalization equities, with 32.2% of covered companies advancing by the close. Across the other major benchmarks, the Nasdaq 100 finished -0.1%, the Russell 2000 small caps registered -0.5%, and the Dow Jones Industrial Average logged -1.1%.

While New York was shut, EasyAlpha re-evaluated several companies across its coverage. Our assessment moved higher for three firms: Workday Inc (WDAY) D to C on its price behaviour, Seagate Technology PLC (STX) C to B on its price behaviour, and Lumentum Holdings Inc (LITE) D to B on the sentiment around it.

At the same time, our assessment moved lower for three other companies. EasyAlpha downgraded Godaddy Inc (GDDY) B to D on its price behaviour, CDW Corp (CDW) B to D on its price behaviour, and Howmet Aerospace Inc (HWM) A to D on the sentiment around it. In every instance, the revision stems directly from shifts in our underlying quantitative tracking rather than an external corporate announcement.

In around-the-clock trading as of 10:15 am New York, benchmark commodities and currencies logged narrow adjustments while domestic equity exchanges were closed. International markets recorded gold -0.8%, the yen against the dollar +0.5%, silver +0.1%, and the euro against the dollar 0.0%.

Corporate earnings will drive much of the upcoming session. A total of 17 covered companies are scheduled to release quarterly results on Wednesday, September 9, forming part of 42 firms reporting over the next seven days. Scheduled before the opening bell are Sunbelt Rentals Holdings, Inc. (SUNB, graded D), SailPoint, Inc. Common Stock (SAIL, graded E), Chewy Inc (CHWY, graded D). Scheduled after the closing bell are The Cooper Companies, Inc (COO, graded D).

Several single stocks are worth watching closely today based on recent developments and corporate updates. Shares of Pembina Pipeline Corp (PBA) are in focus as investors evaluate its dividend yield of about 4.1%. Shares of Thomson Reuters Corporation Common Shares (TRI) remain under pressure after a brokerage price-target cut from $140 to $130 weighed on sentiment. Meanwhile, Gartner Inc (IT) is active following market reaction to its research survey indicating that only 22% of organizations have successfully scaled artificial intelligence. That release contributed to broader selling pressure across enterprise software developers. In separate industry coverage, the firm's research evaluated Red Hat as a leader in container management.

Market participants will also track whether the prior session's sharpest movers carry their momentum into the open. Pacing the upside were Lumentum Holdings Inc (LITE) +11.0% and Intel Corporation (INTC) +9.1%. Intel gained as semiconductor stocks rallied following a brokerage upgrade with a $120 price target alongside discussion of potential processor price increases. Leading the downside were Howmet Aerospace Inc (HWM) -10.7% and Amgen Inc (AMGN) -10.1%. Howmet retreated after an announced $11.75 billion acquisition of Consolidated Precision Products amplified concerns over in-house aerospace manufacturing. At the same time, Amgen dropped following a failed late-stage clinical trial by a competitor in the same cardiovascular treatment class.

A key concept underlying this morning's overnight numbers is why currency movements matter to an investor whose portfolio consists entirely of domestic U.S. equities. Even when an investor never purchases an international security, large American companies in the S&P 500 generate a substantial portion of their total revenue from overseas markets. When foreign currencies strengthen against the U.S. dollar, foreign revenues translate into more U.S. dollars when converted for quarterly financial reports, increasing reported earnings. Conversely, when the U.S. dollar strengthens, international sales lose value upon translation and American goods become more expensive for foreign customers to purchase. Currency fluctuations also influence domestic competition, as changes in exchange rates alter the relative prices of imported products compared to domestically produced goods. For these reasons, shifts in foreign exchange benchmarks directly affect the revenue, profit margins, and valuations of U.S. companies.