A consolidation tone

The stock market traded Thursday with a sense of enthusiasm for the Fed's aggressive rate cut and Apple's (AAPL) iPhone 16 sales prospects. An encouraging initial jobless claims report added to the enthusiasm. Participants saw it as a solid step in the soft landing direction.

It wasn't quite an “everything rally,” but it was close to it. The more defensive-oriented utilities and consumer staples sectors were left out, yet that was largely regarded as a byproduct of what was an otherwise “risk-on rally.”

Things are not quite so risk on at the moment on this quadruple-witching expiration day that features the expiration of stock options, index options, single stock futures, and index futures. Still, things aren't exactly full-on risk off either.

The S&P 500 futures are down nine points and are trading 0.1% below fair value, the Nasdaq 100 futures are down 38 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are up 11 points and are trading fractionally above fair value.

It's a pretty impressive standing really considering FedEx (FDX) cited weaker than expected industrial demand as a factor for a large fiscal Q1 earnings miss and downward revision to its FY25 outlook. FedEx is paying the price for that, down 13% in pre-market action, yet the broader market isn't suffering a lot of payback on account of that warning.

It has a bit of a consolidation tone about it, which makes sense given the run it had leading up to the Fed's interest rate decision, and yesterday's run, which took the Dow Jones Industrial Average and S&P 500 to new record highs.

Coming into today, the Nasdaq Composite is up 8.1% from its September 6 low, the Russell 2000 is up 7.9%; the S&P Midcap 400 is up 6.4%; the S&P 500 is up 5.8%; and the Dow Jones Industrial Average is up 4.3%.

That has all happened against a backdrop that also includes an escalating conflict between Israel and Hezbollah, a Boeing (BA) machinists strike, the threat of a dockworkers strike at East Coast and Gulf Coast ports starting October 1, and an uncertain election outcome in early November.

This stock market, however, has kept its eye on the Fed and economic data that still points largely to a soft landing/no landing economy.

There isn't any U.S. economic data of note today, so stocks will carry on with a focus on corporate news that also includes:

• Dow component Nike (NKE) naming a new CEO
• Homebuilder Lennar (LEN) reporting better-than-expected fiscal Q3 results and noting it expects the gross margin on home sales to be flat sequentially
• Berkshire Hathaway (BRK.B) selling more of its Bank of America (BAC) holdings
• Constellation Energy (CEG) announcing a 20-year power purchase agreement with Microsoft (MSFT) that will include the restart of Three Mile Island Unit 1
• Dow component Johnson & Johnson (JNJ) raising its baby powder settlement offer to $8.2 billion, according to Bloomberg
• Mercedes taking down its full-year guidance due to weak demand in China

Other items of note in a week that has been dominated with monetary policy meetings, the Bank of Japan left its policy settings unchanged, as expected, and the People's Bank of China did as well with its 1-yr and 5-yr loan prime rates.