Stock Market Update

[BRIEFING.COM] The major averages trade at their best levels at midday with the S&P 500 (+0.6%) continuing its hunt for a fresh record high, which resides about 0.2% above the current level.

The market found some resistance in record territory yesterday, but it has been undeterred, drawing some encouragement from Micron's (MU 124.76, -2.49, -1.96%) strong quarterly report and news that President Trump is looking to nominate the next Fed Chairman, who would likely be in support of more dovish policy, in the coming months.

Nine sectors sport midday gains with five groups up at least 1.0% and energy (+1.6%), materials (+1.4%), communication services (+1.3%), and industrials (+1.1%) in the lead.

Chipmakers have been boosted by Micron's results even though Micron itself is on the defensive as participants take profits after the stock's 34.7% June rally leading into last evening's report. The PHLX Semiconductor Index (+0.7%) has extended its June advance to 16.2% with NVIDIA (NVDA 155.36, +1.05, +0.68%) reaching a fresh record while the broader technology sector (+0.4%) is trailing the market as third-largest component—Apple (AAPL 199.92, -1.64, -0.81%)—lags after JP Morgan lowered its price target for the stock to $230 from $245.

The energy sector is rebounding from a poor start to the week thanks to an extension of yesterday's bounce in the price of oil, which is up $0.93, or 1.4%, at $65.85/bbl.

Elsewhere, basic materials have received support from a rising price of copper and strength in steel names like Steel Dynamics (STLD 131.49, +3.01, +2.34%) after Worthington Steel (WS 30.47, +4.21, +16.03%) beat quarterly expectations.

Treasuries have spent the day in positive territory with the 10-yr falling three basis points to 4.26%, seeking its lowest settlement since early May.

Reviewing today's economic data:

• Durable goods orders surged 16.4% month-over-month in May (Briefing.com consensus 6.6%) on a 230.8% increase in orders for nondefense aircraft and parts. Excluding transportation, durable goods orders were up 0.5% month-over-month (Briefing.com consensus 0.1%).
  • The key takeaway, however, is that new orders for nondefense capital goods, excluding aircraft -- a proxy for business spending -- increased 1.7% on the heels of a 1.4% decline in April, reflecting a strong rebound after the reciprocal tariff pause announcement.
• Initial jobless claims for the week ending June 21 decreased by 10,000 to 236,000 (Briefing.com consensus 247,000), while continuing jobless claims for the week ending June 14 increased by 37,000 to 1.974 million, which is the highest level since November 6, 2021.
  • The key takeaway from the report is that initial jobless claims -- a leading indicator -- remain entrenched at fairly low levels that are not associated with a recession or even a significant slowdown for that matter, but to be fair, continuing jobless claims are elevated and do point to some softening in the labor market. Businesses may not be laying off a lot of employees, but it has gotten more challenging to find a new job after losing a job.
• The third estimate for Q1 GDP featured a downward revision to -0.5% (Briefing.com consensus -0.2%) from the second estimate of -0.2% that was driven by downward revisions to consumer spending and exports that were partly offset by a downward revision to imports. The GDP Price Deflator increased to 3.8% (Briefing.com consensus 3.7%) from the second estimate of 3.7%.
  • The key takeaway is that this report is very much "dated," given that we are just a few days away from the end of the second quarter, so it shouldn't have much cachet as a mover for a market that has been cheered since early April by the arrival of hard economic data that has quieted recession concerns.
• Pending Home Sales rose 1.8% in May (Briefing.com consensus 0.4%) after falling 6.3% in April.
• The advance goods trade deficit widened to $96.6 billion in May from a revised deficit of $87.0 billion (from -$87.6 billion) in April.
• Advance Wholesale Inventories were down 0.3% in May after increasing a revised 0.1% (from 0.0%) in April.
• Advance Retail Inventories were up 0.3% in May after a revised unchanged reading (from -0.1%) in April.