Technology stocks powered the major averages higher on Thursday, with another round of strong earnings reactions allowing the Nasdaq Composite (+1.6%) to outperform the S&P 500 (+0.7%) and DJIA (+0.2%). The gains returned all three major averages to positive territory for the week, although the strength at the index level masked a notably weaker showing across most of the market.

The information technology sector (+3.4%) was the only S&P 500 sector to finish higher, supported by substantial gains across both semiconductor and software stocks. NVIDIA (NVDA 227.91, +18.25, +8.70%) surged after another strong earnings report and bullish commentary surrounding the AI buildout, putting further distance between the stock and its 50-day moving average following its recent seven-session losing streak. The PHLX Semiconductor Index (+2.3%) finished firmly higher.

Software stocks provided even stronger leadership, sending the iShares Expanded Tech-Software Sector ETF up 7.7%. Salesforce (CRM 252.10, +46.48, +22.60%) led both the S&P 500 and DJIA after its results featured encouraging forward demand indicators and expectations for accelerating organic revenue growth in the second half. CrowdStrike (CRWD 227.96, +38.78, +20.50%) was another major post-earnings winner, adding to the broad strength across software names.

The concentration of today's gains was evident in the S&P 500 Equal Weighted Index (-0.3%), which finished lower despite the solid advance for its market-cap-weighted counterpart. Defensive groups were among the weakest performers, with the consumer staples sector (-1.5%) finishing at the bottom of the sector standings. Hormel Foods (HRL 21.28, -2.44, -10.27%) finished as the worst-performing S&P 500 component after its earnings release. The health care sector (-1.1%) also lagged as Moderna (MRNA 142.77, -6.89, -4.60%) faced pressure again after last week's monumental surge.

Retail stocks remained another source of weakness. The consumer discretionary sector (-1.0%) finished firmly lower as disappointing earnings reactions from Best Buy (BBY 83.58, -3.86, -4.41%) and Burlington Stores (BURL 289.89, -24.10, -7.68%) weighed on the group, helping send the State Street SPDR S&P Retail ETF down 1.8%.

Oil prices provided a late-session crosscurrent after spending much of the day lower. WTI crude rallied sharply during the afternoon following a report that the White House has no intention of returning to the terms of the June memorandum of understanding with Iran, eventually settling $1.36 higher (+1.7%) at $83.61 per barrel. The move helped the energy sector (-0.4%) recover from a larger decline and finish with the narrowest loss among the ten sectors that ended lower.

Ultimately, Thursday's advance was almost entirely a technology-driven affair, as strong reactions to NVIDIA, Salesforce, CrowdStrike, and other earnings reports outweighed rotational weakness throughout the rest of the market. Attention remains on the earnings calendar after the close, with Marvell (MRVL 241.45, -3.66, -1.49%) and Workday (WDAY 193.57, +2.82, +1.48%) set to report, but the focus will shift back toward monetary policy tomorrow when Fed Chair Kevin Warsh delivers his keynote address at the Jackson Hole Symposium. With the CME FedWatch Tool assigning roughly a one-in-three probability to a September rate hike, Warsh's comments could provide the next major catalyst for rates and the broader market.

U.S. Treasuries recorded slim losses on Thursday after a sideways session concluded with a late slip to lows alongside an uptick in the price of oil. The U.S. Treasury completed this week's note auction slate with a good $44 billion 7-year note offering. The 2-year note yield settled up one basis point to 4.23%, and the 10-year note yield settled up one basis point to 4.67%.

• Russell 2000: +21.5% YTD
• S&P Mid Cap 400: +15.7% YTD
• Nasdaq Composite: +14.2% YTD
• S&P 500: +12.9% YTD
• DJIA: +11.5% YTD

Reviewing today's data:

• July Adv. Intl. Trade in Goods -$118.8 bln; Prior was revised to -$101.4 bln from -$101.5 bln
• July Adv. Retail Inventories 0.7%; Prior 0.0%
• July Adv. Wholesale Inventories 1.3%; Prior 0.3%
• Weekly Initial Claims 203K (Briefing.com consensus 210K); Prior was revised to 207K from 206K, Weekly Continuing Claims 1.778 mln; Prior was revised to 1.796 mln from 1.799 mln
  • The key takeaway from the report is that initial claims continue hovering just above the 200,000 mark, showing little change in overall layoff activity while continuing claims are just above their lowest level of the year.