US Stock Market Overview – Stock Rise Led by Nasdaq; Big Cap Tech Continues to Lead

US stocks were mixed as small-caps continued to face downward pressure as the Nasdaq and S&P 500 index hit all-time highs. Later this week Federal Reserve Chairman Jerome Powell is expected to lay out a new framework for meeting its often-elusive goal of 2% inflation. Large-cap tech shares continued to drive the markets higher this time by Facebook and Salesforce.com. Sectors in the S&P 500 index were mixed, led higher by technology and communications, real-estate and energy bucked the trend. The VIX volatility index initially moved lower but bounced into the close as investors hedged their positions, driving up implied volatility. Durable goods orders rose more than expected, initially buoying yields, and reflecting a healing US economy. Hurricane Laura was upgraded to a category 4 hurricane and is poised to hit both the Louisiana and Texas coasts. Mortgage demand to purchase existing and new homes continues to surge.

Durable Goods Orders Beat Expectations

Durable goods orders rose 11.2% in July, compared with expectations of an increase of 4.3% and a 7.6% increase in June. New orders for capital goods slowed in July, suggesting the rebound in business investment could become more gradual. Orders for non-defense capital goods excluding aircraft, a proxy for business investment, increased 1.9% last month, according to the Commerce Department. Core capital goods orders jumped 4.3% in June. Expectations were for core capital goods to climb by 1.9% in July.

Mortgage Demand Continues to Climb

Mortgage applications to buy US homes rose just 0.4% last week from the previous week but were a remarkable 33% higher than a year ago, according to the Mortgage Bankers Association. Pent-up demand from the spring market and the new stay-at-home mindset has driven the demand for home purchases to record highs.