Major indices started the day in negative territory but recovered, helped by a reversal in memory and SaaS names. Russell 2000 is outperforming, helped by a drop in oil prices and yields, reflecting solid participation among smaller stocks.

Oil is seeing a decline after news that the U.S. and Iran are easing tensions, giving preliminary approval to a new compromise proposal from Qatar and Pakistan.

Health Care (XLV) is the best performing sector as the sector benefits from rotation out of higher-beta stocks. The decline in the 10-year yield is providing some relief to rate-sensitive sectors such as Real Estate (XLRE) and Utilities (XLU).  On the other hand, Communication Services (XLC) is the weakest performer driven by losses in mega-cap names Meta Platforms (META) and Alphabet (GOOGL). Netflix (NFLX) is trading near its flat line ahead of its quarterly report this afternoon. Energy (XLE) is underperforming this afternoon seeing profit taking after five components, including Exxon Mobil (XOM) and Chevron (CVX), reached 52-week highs at the start of today’s session.

Earnings reports have produced some notable moves with 3M (MMM) rallying after beating estimates and raising its full-year guidance. On the other hand, General Motors (GM) and GE Aerospace (GE) are among the worst performing despite beating expectations.

Economic Data

Housing starts declined 5.2% in September to 1.221 million, its lowest level since May and missing estimates. Single-family starts declined 4.6% while multifamily fell 7.2%.

Completions increased 2.2% to 1.192 million, but single-family completions declined to their lowest level since May 2020 to 840,000.

SpaceX

SpaceX (SPCX) faces a big test today when the company releases its third quarter earnings, after the bell. Thus far, the stock looks cheaper than other peers in the space play.

The company announced yesterday it will be releasing its Q3 results today, which is unusual since the company reported later in Q2. This could indicate the company is giving the market enough time to digest implications ahead of a lock-up release schedule.