Utilities Grand Slam. The AI trade may have kickstarted Tuesday's rally, but the gains broadened across most parts of the market throughout the day.
The S&P 500 closed up 0.6%, setting a fresh record of 7819.04. The Nasdaq Composite hit a new high for the second day in a row, rising 0.5%. The Dow Jones Industrial Average rose 0.5%, or 253 points.
Tuesday's rally was broad-based, with all sectors except healthcare ending the day higher. The utilities sector led the pack, posting its largest percentage increase in more than five months. That's actually fairly rare; Since 1990, out of 61 times that the S&P 500 hit its first record high in 30 days or more, utilities was only the leading sector twice, according to Dow Jones Market data team.
The sector's strong performance was helped along by the fact that Constellation Energy stock popped 15% after inking a major nuclear power deal with Alphabet. It ended the day up 12.3%
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The Hot Stock: Ciena Corp +13.9% The Biggest Loser: Seagate Technology Holdings Plc -9.2%
Best Sector: Utilities +3% Worst Sector: Healthcare -0.2%
Fed Minutes In Focus
There aren't a ton of major economic data releases expected this week, but Wednesday's Federal Reserve policy meeting minutes will be a key event. Investors will be watching closely for new details from last month's Fed meeting that could help determine whether the recent interest rate increase was a brief policy adjustment or the start of a longer hiking cycle.
The Federal Open Market Committee voted to raise its target range for the federal-funds rate by a quarter of a percentage point to 3.75% to 4% at the conclusion of its September policy meeting. It was the first time since December 2025 that the Fed changed interest rates, and the first increase since July 2023.
The Fed will release the minutes of its September meeting on Wednesday at 2 p.m. Eastern. Those will hopefully shed more light on the committee's appetite for further hikes, and the mindset of various policymakers.
The latest summary of economic projections (released alongside the Sept. policy decision) signaled limited appetite for further increases; the median projection for the federal-funds rate is expected to be 4.1% at the end of both this year and next. That implies just one additional rate increase in 2026, and none in 2027.
"While the committee voted unanimously, investors will be looking for clues on whether there is meaningful disagreement over how much additional tightening may be needed," writes Antonio Gabriel, global economist at Bank of America Securities.
Most economists expect Wednesday's minutes to come off as more hawkish than previous economic projections would imply. But over the past few weeks, remarks from different Fed officials have been mixed when it comes to the number of rate hikes investors should expect at the two remaining meetings of 2026.
New York Fed President John Williams said last week that he expected just one additional rate increase this year, indicating a preference for a gradual increase. But Dallas Fed President Lorie Logan, also currently a voting member of the FOMC, called for increasing the federal-funds rate by another half a percentage point.
The odds of an October rate hike were just 19% as of Tuesday afternoon, down from just over 50% a week earlier. We'll have to wait and see if the Fed minutes tomorrow change those odds.
The Calendar
Applied Digital and Levi Strauss release earnings tomorrow.
The Federal Open Market Committee releases the minutes from its mid-September monetary-policy meeting.
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