Stocks Retreat on Higher Bond Yields

Market Performance - The S&P 500 Index closed down -0.28%, the Dow Jones Industrials Index down -0.37%, and the Nasdaq 100 Index down -0.31% on Wednesday [1] - December E-mini S&P futures fell -0.27%, and December E-mini Nasdaq futures fell -0.34% [1] Economic Indicators - The 10-year T-note yield rose +4 basis points to a 2.5-week high of 4.15% due to hawkish Fed comments and a significant increase in US August new home sales [2] - US MBA mortgage applications rose +0.6% in the week ended September 19, with the purchase mortgage sub-index up +0.3% and the refinancing mortgage sub-index up +0.8% [4] - US August new home sales unexpectedly jumped +20.5% month-over-month to a 3.5-year high of 800,000, surpassing expectations of a decline [4] Corporate Earnings and Market Sentiment - Rising corporate earnings expectations are seen as a bullish backdrop for stocks, with over 22% of S&P 500 companies providing guidance for Q3 earnings that are expected to beat analysts' expectations, the highest in a year [5] - S&P companies are expected to post +6.9% earnings growth in Q3, an increase from +6.7% as of the end of May [5] Sector Performance - Chip makers showed strength, supporting the stock market, while a +2% increase in WTI crude oil helped push energy producers higher [3] - AI optimism was bolstered by Alibaba's announcement to increase its AI spending beyond an initial $50 billion target, positively impacting AI-infrastructure stocks [3] Upcoming Economic Data - Weekly initial unemployment claims are expected to increase by +2,000 to 233,000 [6] - August core capital goods new orders are expected to slip -0.1% month-over-month [6] - August existing home sales are expected to fall -1.3% month-over-month to 3.96 million [6] - August personal spending is expected to rise by +0.5% month-over-month, and personal income by +0.3% month-over-month [6] - The August core PCE price index is expected to rise by +0.2% month-over-month and +2.9% year-over-year [6]