Stock Market Update

[BRIEFING.COM] Stocks are in the midst of a choppy session amid a plethora of macro developments today. The S&P 500 (+0.5%), Nasdaq Composite (+0.8%), and DJIA (+0.1%) are currently rebounding from a pullback, though the action remains volatile. 

Stocks opened mostly lower in reaction to some disappointing economic data this morning. Notably, the December PCE Price Index (0.4%; Briefing.com consensus 0.3%) came in hotter than expected, and while the core figure (0.4%; Briefing.com consensus 0.4%) was in line with expectations, the year-over-year PCE Price Index remains elevated at 3.0%. 

Additionally, the advance Q4 GDP figure (1.4%; Briefing.com consensus 3.0%) was well below expectations, though the recent government shutdown likely played a role in that. 

Stocks quickly shook off the early weakness as the Supreme Court ruled against President Trump's sweeping IEEPA tariffs. The initial reaction spurred sharp gains across growth stocks, particularly companies in select cyclical sectors and tech companies that rely on heavy imports. 

However, that early enthusiasm has somewhat waned as the process of issuing tariff refunds, which The Wall Street Journal reported will likely be handled by the lower courts, will be a messy process to say the least. 

The market is currently awaiting the commencement of a press briefing from President Trump to address the Supreme Court ruling.

Seven S&P 500 sectors remain higher, though there has been some volatility in some of the early outperformers. 

In particular, the consumer discretionary sector (+0.7%) has seen roughly half of its early strength eroded. lululemon athletica (LULU 184.28, +1.40, +0.77%) has ceded the bulk of its gains, while NIKE (NKE 63.91, -1.70, -2.59%) moves into negative territory after sporting a gain wider than 3.0%. 

A solid gain in Amazon (AMZN 208.70, +3.84, +1.87%) helps keep the sector in positive territory. 

The information technology sector (+0.4%) is also well off of its session highs. Corning (GLW 138.25, +8.26, +6.35%) is an outperformer, while Akamai Tech (AKAM 97.52, -12.07, -11.01%) sinks after earnings. 

Elsewhere, the communication services sector (+2.7%) has been relatively immune to the broader market volatility. Alphabet (GOOG 315.82, +12.26, +4.04%) and Meta Platforms (META 657.09, +12.31, +1.91%) both sport solid gains after a tough start to the year that was defined by massive capital expenditure plans. 

Losses are relatively modest, with the exception of the energy sector (-1.0%), which faces some profit taking after several days of outperformance. Crude oil is down $0.06 (-0.1%) to $66.34 per barrel. Tensions between the U.S. and Iran remain high, with President Trump telling reporters he is weighing an attack on Iran within the next 10-15 days. 

With plenty of catalysts in the mix, it is no surprise that the market has been susceptible to some considerable swings throughout the session. Still, solid performances across mega-cap names keep the major averages higher shortly after midday. 

The market now cautiously awaits President Trump's commentary in response to the Supreme Court's tariff ruling for further clarification on how the situation will play out. 

Reviewing today's data:

• December Personal Income 0.3% (Briefing.com consensus 0.3%); Prior was revised to 0.4% from 0.3%, December Personal Spending 0.4% (Briefing.com consensus 0.2%); Prior was revised to 0.4% from 0.5%, December PCE Prices 0.4% (Briefing.com consensus 0.3%); Prior 0.2%, December PCE Prices - Core 0.4% (Briefing.com consensus 0.4%); Prior 0.2%
  • The key takeaway from the report, other than the fact that spending outpaced income in December, is that the core PCE Price Index sported a 3-handle on a year-over-year basis. This is a key inflation gauge for the Fed, and it doesn't hold the key to a near-term rate cut.
• Q4 GDP-Adv. 1.4% (Briefing.com consensus 3.0%); Prior 4.4%, Q4 Chain Deflator-Adv. 3.6% (Briefing.com consensus 3.3%); Prior 3.8%
  • The key takeaway from the report was the combination of weak growth and stubbornly high inflation in the fourth quarter, both of which run afoul of a market narrative that has been concentrated on stronger growth and lower inflation.
• February S&P Global U.S. Manufacturing PMI - Prelim 51.2; Prior 52.4
• February S&P Global U.S. Services PMI - Prelim 52.3; Prior 52.7
• December New Home Sales 745K (Briefing.com consensus 714K); Prior 758K
  • The key takeaway from the report is that the weakest growth was concentrated in the nation's largest new home market--the South--underscoring the prevailing weakness in the housing market that has coincided with affordability constraints driven by higher prices and higher mortgage rates.
• February Univ. of Michigan Consumer Sentiment - Final 56.6 (Briefing.com consensus 57.3); Prior 57.3
  • The key takeaway from the report is that there were stark differences in sentiment among consumers with stock holdings (large increase in sentiment) and consumers without stock holdings (a decline in sentiment).