Stock Market Update

[BRIEFING.COM] NVIDIA (NVDA 139.18, +4.37, +3.2%) was primed to be the center of the stock market's attention today after it delivered some impressive quarterly results and guidance following yesterday's close. Market participants, though, were forced to divert their attention to a couple of legal rulings regarding the Trump administration's tariff measures and a spate of weaker-than-expected economic data that stirred some growth concerns.

Specifically, the U.S. Court of International Trade got things started with a ruling that President Trump does not have the legal authority to enforce reciprocal tariffs. The White House did not waste any time appealing that ruling, and it became known late in today's trade that the U.S. Court of Appeals granted the White House's request to temporarily reinstate the tariffs.

That ruling keeps the 10% global tariff, the 30% China tariff, and the 25% Canada/Mexico tariffs in place. The court gave the Trump administration until June 9 to respond. What both rulings did, though, was inject more uncertainty into the market that kept overall buying and selling efforts in check.

The same can be said for the second estimate for Q1 GDP, which showed a downward revision for personal spending; jobless claims data that showed the highest level for continuing jobless claims since November 13, 2021; and a 6.3% decline in pending home sales for April.

That collection of reports helped fuel a stark reversal in the Treasury market, which saw the 10-yr note yield and 30-yr bond yield hit 4.53% and 5.03%, respectively, in the overnight trade, with some deficit angst acting as a selling catalyst (the administration has been highlighting the collection of tariffs as a resource for paying down the national debt).

The 10-yr note yield settled today's session at 4.43%, while the 30-yr bond yield backed up to 4.93%, further fortified by a $44 billion 7-yr note auction that was met with strong demand. The U.S. Dollar Index was down 0.5% to 99.39 after being up 0.7% in the overnight trade.

The push lower in yields was not met with a concomitant surge in stock prices, given that growth concerns were behind much of the improvement in the Treasury market. Those concerns were augmented by Best Buy (BBY 66.32, -5.20, -7.3%) cutting its FY26 guidance and Dow component, Salesforce (CRM 266.92, -9.11, -3.3%), posting earnings results that were accompanied by a deceleration in growth for many of its core cloud segments.

Still, NVIDIA's results, and the AI growth optimism that followed them, offered some influential support for the broader market. The S&P 500 traded down to 5,873 at its worst level of the day, but buyers were quick to show up to help it regain a posture above the 5,900 level where it closed.

Ten of the 11 S&P 500 sectors were higher, but none were up more than 1.0%. The real estate sector (+0.9%) led that pack, but it was the information technology sector (+0.6%) that did the heavy lifting. The communication services sector (-0.3%) was the only sector to finish with a loss.

While today's gains were modest, breadth figures convey an otherwise positive bias. Advancers led decliners by a better than 2-to-1 margin at the NYSE and by a nearly 13-to-9 margin at the Nasdaq.

• S&P 500: +0.5% YTD
• Nasdaq: -0.7% YTD
• DJIA: -0.8% YTD
• S&P 400: -3.5% YTD
• Russell 2000: -7.0% YTD

Reviewing today's data:

• Initial jobless claims for the week ending May 24 increased by 16,000 to 240,000 (Briefing.com consensus 230,000), while continuing jobless claims for the week ending May 17 increased by 26,000 to 1.919 million, hitting their highest level since November 13, 2021.
  • The key takeaway from the report was the tandem jump in initial and continuing jobless claims, which denotes some increased layoff activity and some increased difficulty in finding a new job after being laid off.
• The second estimate for the Q1 GDP report showed a 0.2% decline in real GDP (Briefing.com consensus -0.3%) versus the 0.3% decline reported in the advance estimate. The GDP Price Deflator was unrevised at 3.7% (Briefing.com consensus 3.7%) following a 2.3% increase in Q4.
  • The key takeaway from the report is that it featured a downward revision to personal spending to 1.2% from 1.8% in the advance estimate, underscoring how the tariff uncertainty and inflation angst tempered consumer spending activity.
• April Pending Home Sales -6.3% (Briefing.com consensus -1.1%) versus downwardly revised 5.5% increase (from 6.1%) for March