Stock Market Update

[BRIEFING.COM] A mid-morning sell-off across tech and mega-cap names sent the S&P 500 (-1.2%), Nasdaq Composite (-1.8%), and DJIA (-0.5%) firmly lower after early mixed action. 

The S&P 500 surrendered its 50-day moving average (6,766.98) in today's action as the market's heaviest names suffered considerable losses amid a backdrop that skewed slightly negative in the broader market. 

The information technology sector (-2.2%) retreated the furthest, facing pressure in the majority of its largest components. 

Oracle (ORCL 178.45, -10.20, -5.41%) closed with one of the widest losses, extending last week's post-earnings slide after Financial Times reported that Blue Owl Capital (OWL 15.39, -0.44, -2.78%) is no longer funding a $10 billion data center project in Michigan.

That headline also weighed heavily on power stocks such as GE Vernova (GEV 614.19, -72.03, -10.50%) and Constellation Energy (CEG 340.98, -24.64, -6.74%), as Oracle's potential funding hurdles for large-scale data center development raised concerns about delays or cancellations across the hyperscale AI infrastructure buildout, threatening expected demand growth for electricity generation, transmission, and related upgrades. The industrials sector (-1.6%) was among today's laggards as a result. 

Elsewhere in the information technology sector, Advanced Micro Devices (AMD 198.11, -11.06, -5.29%) also extended post-earnings losses amid a tough day for chipmakers. Micron (MU 225.71, -6.80, -2.93%), which reports its earnings after the close, and NVIDIA (NVDA 170.94, -6.78, -3.81%) also struggled and contributed to a 3.8% slide in the PHLX Semiconductor Index. 

Weakness in the AI trade saw Alphabet (GOOG 298.06, -9.67, -3.14%) add to its week-to-date losses, sending the communication services sector (-1.9%) near the bottom of today's leaderboard. 

Elsewhere in the sector, Warner Bros. Discovery's (WBD 28.21, -0.69, -2.39%) Board of Directors unanimously recommended that shareholders reject Paramount Skydance's (PSKY 13.10, -0.75, -5.42%) hostile takeover bid, noting that they do not find it provides superior value to Netflix's (NFLX 94.79, +0.22, +0.23%) offer. Nonetheless, Paramount affirmed its commitment to acquiring Warner Bros. Discovery despite the recommendation.

The consumer discretionary sector (-1.2%) rounds out the four S&P 500 sectors that closed with a loss of 1.0% or wider. Tesla (TSLA 467.26, -22.62, -4.62%) was a laggard across mega-cap names, which faced considerable weakness today, while Lennar (LEN 112.23, -5.34, -4.54%) and other homebuilders moved lower after the company missed EPS estimates. 

Meanwhile, four S&P 500 sectors managed to notch gains, though they were modest with the exception of the energy sector (+2.2%). 

The sector slid 3.0% in yesterday's trade as the price of oil fell 2.7% amid growing optimism around a Russia-Ukraine peace deal, which would likely result in Russia's return to the already oversupplied global oil market. Crude oil futures settled today's session $0.51 higher (+0.9%) at $55.80 per barrel, with the bump largely attributed to President Trump's orders for a blockade of sanctioned tankers entering and leaving Venezuela.

The consumer staples (+0.5%), materials (+0.4%), and real estate (+0.3%) sectors also finished higher. The financials sector finished flat.

Outside of the S&P 500, the small-cap Russell 2000 (-1.1%) and S&P Mid Cap 400 (-0.5%) moved into negative territory for the month with today's losses.

Ultimately, today's action highlights the recent choppiness in the market. While a late-session rally in tech and mega-cap names helped the major averages finish mixed yesterday, a larger pullback this morning pushed the indices lower.

Oracle's potential funding issues tied to its Michigan data center have reignited concerns about the timing and reliability of investment returns on large-scale AI buildouts, sending many of the market's largest names lower. The Vanguard Mega Cap Growth ETF, which tracks these mega-cap stocks, closed 1.9% lower, underscoring how such a wide loss among the market's heaviest weights makes it nearly impossible for the major averages to notch gains. 

U.S. Treasuries ended a subdued Wednesday session with slim losses across the curve. The 2-year note yield settled up one basis point to 3.49%, and the 10-year note yield finished unchanged at 4.15%. 

• Nasdaq Composite: +17.5% YTD
• S&P 500: +14.3% YTD
• DJIA: +12.6% YTD
• Russell 2000: +11.9% YTD
• S&P Mid Cap 400: +6.0% YTD

Reviewing today's data:

• The weekly MBA Mortgage Index fell 3.8% to follow last week's 4.8% increase. The Purchase Index was down 2.8% while the Refinance Index fell 3.6%.