Stock Market Update

[BRIEFING.COM] The S&P 500 started today's session 0.9% from its all-time high, and after six-and-a-half hours of trading, that's where it remained. There was no real push today to hit a new record, as most stocks fell prone to some profit-taking interest. Nonetheless, because a handful of key stocks did not, the market cap-weighted S&P 500 and Nasdaq Composite stood their ground.

That would include NVIDIA (NVDA 154.31, +6.41, +4.33%), Alphabet (GOOG 171.49, +3.75, +2.24%), Apple (AAPL 201.56, +1.26, +0.63%), and Microsoft (MSFT 492.27, +2.16, +0.44%). Collectively, those four stocks have a market cap of approximately $12.2 trillion, which was weighty enough at the index level to offset the loss in FedEx (FDX 222.00, -7.51, -3.27%), which has a market cap of just $55 billion, following its earnings report and disappointing outlook.

It was even enough to cancel out the weakness in Tesla (TSLA 327.55, -12.92, -3.79%), which dropped on a report that its European car sales declined 27.9% yr/yr in May. Market breadth, though, told the real story of today's trade. Decliners led advancers by a better than 2-to-1 margin at the NYSE and by a 7-to-4 margin at the Nasdaq.

The Russell 2000 was down 1.2%; the S&P Midcap 400 was down 0.8%; the equal-weighted S&P 500 was down 0.7%; and eight of the 11 S&P 500 sectors finished lower with losses ranging from 0.4% (financials) to 2.5% (real estate). Today's session was, more or less, a day of attrition, but it still ended with the Nasdaq 100 extending its reach into record territory.

It did so on the leadership of the aforementioned mega-cap stocks, which propped up the information technology (+1.2%) and communication services (+0.5%) sectors. The health care sector (+0.1%) was the only other sector to record a gain. Separately, the Philadelphia Semiconductor Index gained 1.0%, leaving it up 28.6% for the quarter.

There weren't a lot of "new" news drivers to jumpstart the market. Fed Chair Powell didn't say anything consequential on the rate cut front before the Senate Banking Committee today, NATO confirmed its commitment to a 5% defense spending target, and things were relatively quiet on the Israel-Iran front. 

There was news in the Fed's proposal to lower the supplemental leverage ratio for GSIBs, as had been speculated. That news lent support to the Treasury market, which had been digesting a much weaker-than-expected new home sales report for May and a $70 billion 5-yr note auction that was met with okay, but not strong, demand.

The 2-yr note yield settled the session down three basis points at 3.78%, while the 10-yr note yield dropped one basis point to 4.29% after skimming 4.33% earlier in the day.

• S&P 500: +3.6% YTD
• Nasdaq: +3.4% YTD
• DJIA: +1.0% YTD
• S&P 400: -2.1% YTD
• Russell 2000: -4.2% YTD

Reviewing today's data:

• New home sales declined 13.7% month-over-month in May to a seasonally adjusted annual rate of 623,000 units (Briefing.com consensus 700,000) from a downwardly revised 722,000 (from 743,000) in April. That was the weakest pace of sales since October 2024. On a year-over-year basis, new home sales were down 6.3%.
  • The key takeaway from the report is that there is an ample supply of new homes for sale, yet overall sales were weak in May, with high prices and high mortgage rates crimping demand.
• MBA Mortgage Applications Index +1.1% wk/wk, with refinance applications up 3% and purchase applications down 0.4%.