Market Resilience Tested as Gains Fade into the Close

The stock market opened strong on optimism over improving trade sentiment with China, but sector strength faded throughout the day, leaving the major averages well below their session highs by the close. The Nasdaq Composite climbed 0.7%, leading the advance on strength in technology and mega-cap names, while the S&P 500 added 0.4% and the Dow Jones Industrial Average finished flat. The Russell 2000 outperformed with a 1.0% gain, while the S&P Mid Cap 400 edged up just 0.1%.

Momentum was fueled early after Treasury Secretary Scott Bessent hinted that a longer trade truce with China could be secured if Beijing delayed its planned restrictions on rare earth exports. That boost carried all eleven S&P 500 sectors into positive territory during the morning, lifting the indexes back near last week’s record highs before broad selling pressure emerged midday.

The information technology sector (+0.7%) anchored today’s gains. Strength in chipmakers helped offset early weakness from the prior session, with ASML reporting strong bookings and AMD surging 9.4% to lead the S&P 500. The PHLX Semiconductor Index gained 3.0%, its best single-day move in two weeks. Communication services (+1.0%) followed, supported by solid rebounds in Alphabet (+2.2%) and Meta Platforms (+1.3%), while the Vanguard Mega Cap Growth ETF rose 0.6%, helping the market-weighted S&P 500 outperform its equal-weighted counterpart (+0.2%).

Defensive sectors also performed well, with real estate (+1.5%) and utilities (+1.3%) extending their strong weekly momentum. On the downside, materials (-0.5%) and industrials (-0.5%) lagged, weighed by weakness in defense stocks after Secretary Bessent suggested that defense contractors could face restrictions on stock buybacks in favor of greater R&D spending. The iShares U.S. Aerospace & Defense ETF slipped 1.5%.

Earnings were mixed across financials (-0.1%), as strong beats from Morgan Stanley (+4.7%) and Bank of America (+4.4%) were offset by declines in PNC (-3.9%) and Progressive (-5.8%) following weaker guidance.

Macro headlines remained light, though the Fed’s Beige Book showed little change in economic activity and did little to shift expectations. Rate cut probabilities stayed firmly in place, with the market still pricing in a high likelihood of an October cut, while the government shutdown continued to delay key data releases.

Despite the late-session pullback, the market’s ability to recover from recent dips suggests risk appetite remains intact. However, the growing pattern of intraday volatility points to a more cautious tone beneath the surface as investors balance trade hopes with lingering uncertainty.

Our FTinvest 11 model portfolio managed to edge higher on Thursday, adding 0.18% to close at 843.92, extending its modest rebound following a volatile stretch earlier in the week.

Early trading leaned soft as investors digested mixed sector performance and lingering macro uncertainty, but a late-afternoon uptick in buying across select growth components helped lift the index into positive territory by the close.

Strength in several of the index’s technology and consumer-oriented names provided the day’s foundation, offsetting weakness in cyclical and defensive holdings. The move mirrored broader market behavior, where major U.S. benchmarks finished mixed yet near their highs for the session, aided by measured optimism surrounding trade relations and sustained expectations for near-term Fed easing.

Despite the narrow advance, FTinvest 11 continues to show resilience amid choppy market conditions. Today’s modest gain underscores a wait-and-see tone among investors heading into the next round of economic data and corporate earnings, with positioning remaining cautious but constructive.

The index now sits just above the 843 level, maintaining its footing within the broader consolidation range established over the past week.