Stock Market Update

[BRIEFING.COM] The stock market rebounded from opening losses, with the S&P 500 and Nasdaq Composite climbing to new record highs in today’s session.

Though there was some early selling off yesterday's bullish action, the market displayed a positive growth outlook that was reflected in the outperformance of the small-cap and mid-cap stocks, cyclical sectors, and gains in nine of the 11 S&P 500 sectors.

Small-cap and mid-cap stocks led the recovery from session lows this morning, as did “other” stocks in the S&P 500. That trend continued throughout the day. The Russell 2000 finished with a gain of 0.5%, as did the S&P Mid Cap 400 . The equal-weighted S&P 500 closed 0.6% higher. The market cap-weighted S&P 500 rose 0.3%.

The Invesco S&P High Beta ETF (+1.3%) outperformed, reflecting a bull market attitude.

While mega-cap stocks started sluggishly, they ultimately held their ground as a cohort. The Vanguard Mega Cap Growth ETF closed unchanged for the day. The mega-cap underperformance largely contributed to the communication services (-0.5%) and information technology sectors (-0.1%) finishing in negative territory.

The consumer discretionary sector (+1.0%) led the other nine sectors, bolstered by leadership from travel names after Delta Air Lines (DAL 56.79, +6.09, +12.0%) beat quarterly expectations and reinstated its guidance for the year. Many airlines had paused their guidance following the tariff announcements in early April.

Additionally, Tesla (TSLA 309.87, +13.99, +4.7%) traded sharply higher amid reports that the company is awaiting approval for a Robotaxi service in San Francisco, while also planning an expansion into Arizona, according to a Bloomberg report. McDonald’s (MCD 298.39, +5.37, +1.83%), which jumped on a Goldman Sachs upgrade to Buy from Neutral, also provided some sector support.

U.S. Treasuries finished close to where they settled in yesterday's session. There was some modest selling early today following a sturdy initial jobless claims report that is expected to keep a July rate cut on ice, but there was no follow-through.

Yields started to dip in front of today's $22 billion 30-yr bond auction results at 1:00 p.m. ET, and they continued to move lower in its wake. The auction was met with decent demand, and it concluded a week that saw the market absorb $119 billion in new supply without much problem. That fostered a bit of a relief trade that contributed to the recovery effort, which transpired amid a seeming lack of concern for tariff-induced inflation pressures.

• Nasdaq: +6.8% YTD
• S&P 500: +6.8% YTD
• DJIA: +5.0% YTD
• S&P 400: +2.5% YTD
• Russell 2000: +1.5% YTD

Reviewing today's data:

• Initial jobless claims decreasing by 5,000 for the week ending July 5 to 227,000 (Briefing.com consensus: 245,000). Continuing jobless claims for the week ending June 28 increased by 10,000 to 1.965 million, which is the highest level since November 13, 2021.
  • The key takeaway from the report continues to be that businesses have been slow to let employees go, but that it has become more difficult to find a job after losing one. This dynamic reflects a softening labor market, but not a truly weak labor market.