Major indices hit new record highs this afternoon, driven by strength in the mega-caps. Investors are digesting earnings and waiting for the FOMC rate cut decision tomorrow. On the trade front, trade negotiations with China are seeing positive developments.

Per the Wall Street Journal, Trump and Xi will discuss lowering Chinese tariffs in exchange for a tougher crackdown on Fentanyl.

China has long been the origin of much of the illicit Fentanyl supply chain. This trend reminds me of the Opium Wars, where western nations exported opium into China.

Technology (XLK) and Consumer Discretionary (XLY) are the best performing sectors as several of their largest components hold solid gains. Technology (XLK) is getting a boost from Skyworks (SWKS) and Qorvo (QRVO), after the two iPhone suppliers agreed to merge. Meanwhile, Tesla (TSLA) and Amazon (AMZN) are displaying strong leadership in the Consumer Discretionary (XLY) sector.

Materials (XLB) is getting a boost from several favorable earnings, including Nucor (NUE) and Sherwin-Williams (SHR). As a result, steel makers and chemicals are leading the way this afternoon.

On the flip side, Real Estate (XLRE) is lagging and led lower by Alexandria Real Estate Equities (ARE), after they reported a double miss and forecasted FFO below estimates.

Nvidia (NVDA) made several notable announcements today, including the unveiling of NVQLink, a high speed interconnect that directly links quantum processors to GPUs, raising the potential of hybrid supercomputers. Furthermore, they also announced a partnership with the Department of Energy to build several new AI supercomputers.

Quantum computing pure plays are lower following the announcement.

Economic Data

The Richmond Manufacturing Index rose 13 points to -4 in October from -17 in September, and above expectations of -14.

Notable Points:

• Shipments rebounded to 4 from -20
• New orders rose to -6 from -15
• Expected shipments improved to 13 from 0
• Expected new orders advanced to 12 from 8
• Input prices eased to 5.8 from 7.2

The Conference Board Consumer Confidence fell to 94.6 in October from 95.6 in September and above estimates of 93.2.

The Present Situation Index rose 1.8 points to 129.3, while the Expectations Index fell 2.9 points to 71.5. Notably, 12-month inflation expectations edged up to 5.9% from 5.8%.

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