Stock Market Update

[BRIEFING.COM] The stock market scored some big gains on Tuesday, but there was no follow-through on that effort today. The major indices trudged their way through Wednesday's session, weighed down by a lack of concerted leadership and a pervasive sense of wait-and-see in front of NVIDIA's (NVDA 134.81, -0.69, -0.5%) earnings report after the close.

In effect, it was a consolidation trade influenced by rising Treasury yields, an FT report that the Trump administration told semiconductor software design companies to stop selling to customers in China, and some festering valuation concerns.

All 11 S&P 500 sectors ended the day in negative territory. The biggest losers were the utilities (-1.4%), energy (-1.3%), and materials (-1.3%) sectors.

Small-cap stocks and the value factor also underperformed in a move that could be attributed in part to growth concerns, but to be fair, trading volume was relatively light on a day that saw the market cap-weighted S&P 500 break below 5,900 in late trading and close near its lows for the session.

There were some outliers in today's trade, namely Abercrombie & Fitch (ANF 88.47, +11.32, +14.7%) and Fair Isaac Corp. (FICO 1618.62, +115.01, +7.7%). The former reported better-than-expected earnings results, and the latter was upgraded to Outperform from Neutral at Robert W. Baird.

The tale of the tape, though, was one of weakness. Decliners led advancers by a 3-to-1 margin at the NYSE and by a 2-to-1 margin at the Nasdaq.

There was no U.S. economic data of note today, but it was reported before the open that the Mortgage Bankers Association's Mortgage Applications Index declined 1.2% week-over-week, with purchase applications up 2% and refinance applications down 7%.

Treasuries drew some buying interest after the report, but they eventually reversed course, with the 10-yr note yield scraping 4.50% and the 30-yr bond yield kissing 5.01% at their highs before backing down. The 10-yr note yield settled at 4.48%, while the 30-yr bond yield settled at 4.98%.

The Treasury market didn't react much to a $70 billion 5-yr note auction that was met with decent demand nor to the FOMC Minutes for the May 6-7 meeting, which conveyed increased uncertainty about the outlook and the potential for a difficult trade-off if inflation proves to be more persistent and the outlooks for growth and employment weaken. Those observations were interpreted largely by the market as being known and dated.

• S&P 500: +0.1% YTD
• Nasdaq: -1.1% YTD
• DJIA: -1.1% YTD
• S&P 400: -3.7% YTD
• Russell 2000: -7.3% YTD