Stock Market Update

[BRIEFING.COM] Investors were buoyed by stellar earnings reports from Microsoft (MSFT 536.44, +23.20, +4.5%) and Meta Platforms (META 778.84, +83.63, +12.0%), which propelled the S&P 500 (+0.5%) and Nasdaq Composite (+0.8%) to fresh record highs just after the open. That positive momentum continues to drive gains in the Nasdaq Composite and the market-cap-weighted S&P 500, although the broader market has not shared equally in the upside.

Unsurprisingly, mega-cap stocks are outperforming the market, with the Vanguard Mega Cap Growth ETF up 1.1% today. 

Meanwhile, the equal-weighted S&P 500 is down 0.2%, the Russell 2000 has slipped 0.1%, and the S&P Mid Cap 400 is down 0.3%.

Notably, semiconductor stocks (with the exception of NVIDIA (NVDA 181.20, +1.93, +1.1%)) are underperforming. Disappointing earnings and guidance from Qualcomm (QCOM 149.29, -9.77, -6.1%), Arm Holdings plc (ARM 143.64, -19.68, -12.1%), and Lam Research (LRCX 94.35, -4.74, -4.8%), along with weaker-than-expected results from Samsung Electronics, have weighed heavily on chipmakers. The Philadelphia Semiconductor Index is currently down 1.9%.

Still, Microsoft is bolstering the broader information technology sector (+0.7%) after it reached a new record-high level that saw the company surpass $4 trillion in market capitalization. 

Shares of Apple (AAPL 209.06, +0.01, +0.0%) trade flat ahead of its earnings release after the close, which in conjunction with earnings from Amazon (AMZN 234.98, +4.79, +2.1%), will likely keep mega-cap earnings a driving factor through the week. 

The communications services sector (+2.6%) is the top-performing S&P 500 sector, powered by Meta's surge. Other sectors, however, are showing mixed performance, with the health care (-0.7%), real estate (-0.6%), materials (-0.4%), and energy (-0.1%) sectors trading in negative territory. 

Though not as influential as Microsoft or Meta's moves, there is still a cohort of stocks trading higher in reaction to earnings, including eBay (EBAY 91.94, +14.38, +18.5%), Carvana (CVNA 392.90, +59.32, +17.8%), and Roblox (RBLX 139.95, +15.01, +12.0%).

In addition, trade headlines are influencing sentiment. News of a trade agreement with South Korea featuring a 15% tariff on imported goods kicked things off.

Reports followed that tariff rates will revert to April 2 levels for countries lacking a framework agreement or those already issued a tariff letter.

Meanwhile, Mexico has been granted a 90-day extension on the 25% tariff rate.

Reviewing today's data:

• June Personal Income 0.3% (Briefing.com consensus 0.3%); Prior -0.4%, June Personal Spending 0.3% (Briefing.com consensus 0.4%); Prior was revised to 0.0% from -0.1%, June PCE Prices 0.3% (Briefing.com consensus 0.3%); Prior was revised to 0.2% from 0.1%, June PCE Prices - Core 0.3% (Briefing.com consensus 0.3%); Prior 0.2%
  • The key takeaway from the report is that real personal spending was up a modest 0.1% in June. That isn't much, although it does show that consumers continue to have the capacity to spend in the face of higher prices.
• Weekly Initial Claims 218K (Briefing.com consensus 220K); Prior 217K, Weekly Continuing Claims 1.946 mln; Prior was revised to 1.946 mln from 1.955 mln
  • The key takeaway from the report is the recognition that employers still remain reluctant to lay off employees, but employees that do get laid off are facing a tougher time finding a new job.
• Q2 Employment Cost Index 0.9% (Briefing.com consensus 0.8%); Prior 0.9%
  • The key takeaway from the report is that compensation costs have moderated, which could serve to lower some of the inflation temperature at the Fed.
• July Chicago PMI 47.1 (Briefing.com consensus 42.1); Prior 40.4