Stock Market Update

[BRIEFING.COM] The stock market saw another day of strong gains in mega-cap and tech stocks, pushing the S&P 500 (+0.8%) to new intraday (7,026.24) and closing (7,022.95) highs. The tech-heavy Nasdaq Composite (+1.6%) notched an even wider gain, capturing a record closing high of its own.

Meanwhile, weakness in the broader market saw the DJIA (-0.2%) face a modest retreat as gains were largely confined to growth-oriented pockets of the market.

Equities remain supported by an improving geopolitical backdrop, as reports circulated that the U.S. and Iran may soon meet for another round of negotiations aimed at extending the current ceasefire. Importantly, oil prices remain stable, with crude oil futures settling today's session $0.01 lower (-0.01%) at $91.30 per barrel.

Gains were led by the top-weighted information technology sector (+2.1%), which extended its week-to-date gain to 5.6%. Software names led the advance, with Microsoft (MSFT 411.22, +18.11, +4.61%) a notable "magnificent seven" standout and packaged software names such as Datadog (DDOG 121.06, +10.49, +9.49%) and ServiceNow (NOW 94.19, +6.40, +7.29%) posting even wider gains. The iShares GS Software ETF finished 4.4% higher.

Semiconductor names were relative underperformers, though the PHLX Semiconductor Index (+0.2%) eked out a slight gain. Sandisk (SNDK 891.72, -52.74, -5.58%) deepened yesterday's reversal from a record high, while AI-infrastructure stocks such as KLA Corporation (KLAC 1748.11, -47.80, -2.66%) lagged after ASML (ASML 1481.77, -36.53, -2.41%) topped earnings estimates but lowered its Q2 guidance. Broadcom (AVGO 396.72, +15.94, +4.19%) still captured a nice gain after announcing an expanded partnership with Meta Platforms (META 673.10, +10.60, +1.60%) to support the company's rapidly scaling artificial intelligence compute infrastructure.

Meta's gain contributed to strength in the communication services sector (+1.1%), while the consumer discretionary sector (+1.4%) captured a similar gain as Tesla (TSLA 391.95, +27.75, +7.62%) moved sharply higher.

All told, the Vanguard Mega Cap Growth ETF advanced 1.9%, which contributed to the outperformance of the market-weighted S&P 500 (+0.8%) relative to the S&P 500 Equal Weighted Index (flat).

The financials sector (+0.8%) was the only other S&P 500 sector to notch a gain today, supported by a solid gain from Morgan Stanley (MS 191.60, +8.26, +4.51%) after topping earnings estimates and Robinhood Markets (HOOD 87.32, +8.23, +10.41%) finishing as one of the top-performing S&P 500 components after the SEC approved a proposal from FINRA to eliminate the current day trading margin requirements.

As for the broader market, losses were relatively modest in nature, though there were some notable underperformers.

The industrials sector (-1.2%) underperformed, with names such as Caterpillar (CAT 770.17, -24.08, -3.03%) and Carrier Global (CARR 58.55, -6.11, -9.45%) lagging. Recent Fed commentary suggests rates will remain unchanged for some time in response to oil-driven inflation, and the sector is particularly sensitive to higher rates given its capital-intensive nature and the reliance of its customers on financing for large equipment and infrastructure projects.

Elsewhere, the materials (-1.3%) sector saw a continuation of recent weakness, while the defensive utilities (-0.9%), health care (-0.7%), and consumer staples (-0.4%) underperformed amid the strength in growth stocks.

Outside of the S&P 500, the Russell 2000 (+0.3%) managed to capture a modest gain, while the S&P Mid Cap 400 (-0.3%) lagged.

Today's session marked an important milestone for the market as it looks to leave the Iran war in the rearview, with the S&P 500 eclipsing its previous record high from late January. Mega-cap and tech stocks are back in the driver's seat, which is important for index-level growth, especially since the group was off to a relatively subdued start to the year before the conflict in Iran prompted sharp losses. While the full impact of the surge in oil prices on inflation (and, in turn, rate cut expectations) remains to be seen, the market is back on firmer ground as Q1 earnings begin to ramp up.

U.S. Treasuries dipped on Wednesday, giving back the bulk of their Tuesday gains in an otherwise quiet midweek session. The 2-year note yield settled up two basis points to 3.77%, and the 10-year note yield settled up three basis points to 4.28%. 

• Russell 2000: +9.3% YTD
• S&P Mid Cap 400: +8.0% YTD
• Nasdaq Composite: +3.3% YTD
• S&P 500: +2.6% YTD
• DJIA: +0.8% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 1.8%; Prior -0.8%
• April Empire State Manufacturing 11.0 (Briefing.com consensus 0.0); Prior -0.2 March Import Prices 0.8%; Prior was revised to 0.9% from 1.3%
• March Import Prices ex-oil 0.6%; Prior was revised to 0.8% from 1.1%
• March Export Prices 1.6%; Prior was revised to 1.9% from 1.5% March Export Prices ex-ag. 1.7%; Prior was revised to 2.1% from 1.7%
• April NAHB Housing Market Index 34 (Briefing.com consensus 38); Prior 38

[BRIEFING.COM] The S&P 500 (+0.8%) and Nasdaq Composite (+1.5%) continue to chart session highs as the market enters the final half hour of the session. In addition to the S&P 500 establishing a new all-time high today, the tech-heavy Nasdaq Composite is now just 0.2% below its own record level from late October.

The DJIA (-0.1%) remains further below its respective record high, but is making a late afternoon push toward its baseline.

Investors will have just a modest batch of earnings reports to assess after the close, but tomorrow morning's action will feature some notable names, including PepsiCo (PEP 155.07, -0.65, -0.42%), Abbott Labs (ABT 101.82, +0.76, +0.76%), and Travelers (TRV 300.96, +1.37, +0.46%).

[BRIEFING.COM] The S&P 500 (+0.7%) pushed past its previous all-time high of 7,002.28, currently sitting around the 7,015 mark.

Nothing material has changed at the sector level, though the information technology sector (+1.7%) has expanded its gain for the day, with software names continuing to dot the top of the sector's leaderboard.

Microsoft (MSFT 413.25, +20.14, +5.12%) continues to move above its 50-day moving average (391.93) which it reclaimed yesterday, and the iShares GS Software ETF has widened its gain to 4.6%.

[BRIEFING.COM] The broader market is still mixed after the Fed released its April Beige Book at the bottom of the hour. The report showed that overall economic activity increased at a slight to modest pace across most Federal Reserve Districts, with some regions reporting little change or modest declines. Manufacturing rose modestly and banking conditions were steady with stable to slightly higher loan demand, while consumer spending edged up despite weather and fuel cost pressures but showed continued financial strain among lower-income households. Housing softened amid higher rates and uncertainty, commercial real estate improved in industrial and data center segments, and energy activity rose slightly as oil prices increased though producers remained cautious. Business outlooks varied amid widespread uncertainty about future conditions. Currently, the S&P 500 (+0.57%) is firmly in second place.

Overall, economic expectations were optimistic, with most Districts expecting slight to moderate growth in the coming months.

• Employment: Employment was largely stable with modest growth, as cautious hiring, improved labor supply, and selective wage pressures in healthcare and skilled trades were partly offset by AI-driven productivity gains reducing the need for additional hiring.
• Prices: Price growth remained mostly moderate, but rising input costs led by energy, tariffs on metals, and higher insurance and healthcare expenses generally outpaced selling prices, compressing margins across many Districts.

Currently, the yield on the benchmark 10-yr Treasury note is little changed post Beige Book, up about three basis points at 4.288%.

[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.96%) is in first place this afternoon, up about 226 points.

Gold futures settled $26.90 lower (-0.5%) at $4,823.60/oz, as a firmer dollar and reduced expectations for near-term Fed rate cuts weigh on prices. The pullback also reflects profit-taking and easing geopolitical tensions, which have softened safe-haven demand.

Meanwhile, the U.S. Dollar Index is now flat at $98.10.