Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.6%), Nasdaq Composite (+1.2%), and DJIA (-0.3%) are mostly higher shortly after midday as a rebound in tech and mega-cap names helps offset mixed action in the broader market. The S&P 500 and Nasdaq Composite have reclaimed yesterday's losses and set new all-time intraday highs.

Action was choppy at the open following the release of the April PPI report. Both headline PPI (1.4%; Briefing.com consensus 0.4%) and core PPI (1.0%; Briefing.com consensus 0.3%) came in hotter than expected, reviving concerns that the Fed may need to keep policy restrictive for longer. Treasuries remain under pressure, with the 10-year note yield up two basis points to 4.48%.

Despite the early volatility, investors quickly stepped in to buy yesterday's dip across semiconductor names. onsemi (ON 115.08, +10.97, +10.54%) is one of the best-performing S&P 500 components, while NVIDIA (NVDA 226.82, +6.04, +2.74%) holds a solid gain after Bloomberg reported that CEO Jensen Huang is joining President Trump on his trip to China.

The PHLX Semiconductor Index is up 2.5%, which keeps the top-weighted information technology sector (+1.0%) near the top of the leaderboard.

Strength in other mega-cap names, such as Alphabet (GOOG 396.40, +12.58, +3.28%) and Tesla (TSLA 449.78, +16.33, +3.77%), supports growth in the communication services (+2.1%) and consumer discretionary (+1.0%) sectors. The Vanguard Mega Cap Growth ETF is up 1.0%, with strength in the market's largest names helping the market-weighted S&P 500 (+0.6%) outperform the S&P 500 Equal Weighted Index (-0.5%).

Elsewhere in the consumer discretionary sector, Ford Motor (F 13.52, +1.53, +12.76%) is the best-performing S&P 500 component after Morgan Stanley issued positive analyst commentary, laying out a bull case for the company's energy storage business that could see $500-$600 million of EBIT potential.

Strength in the broader market is mixed, with six S&P 500 sectors trading lower. Rate-sensitive sectors such as utilities (-1.3%) and real estate (-0.8%) are among the worst performers as treasury yields rise, while the financials sector (-1.0%) also lags, with particular weakness across financial services names.

Despite hotter-than-expected producer inflation data and another rise in Treasury yields, investors continue to show a strong appetite for AI-driven and mega-cap growth names. The rebound across semiconductor stocks and renewed leadership from the market's largest companies have been enough to push the S&P 500 and Nasdaq Composite back to fresh record highs, even as participation beneath the surface remains mixed.

Reviewing today's data:

• Weekly MBA Mortgage Applications 1.7%; Prior -4.4%
• April PPI 1.4% (Briefing.com consensus 0.4%); Prior was revised to 0.7% from 0.5%, April Core PPI 1.0% (Briefing.com consensus 0.3%); Prior was revised to 0.2% from 0.1%
  • The key takeaway from the report is that the surge in producer prices in April wasn't just energy-related. That surge accounted for the bulk of the 2.0% increase in the index for final demand goods, but two-thirds of the "broad-based advance" in the index for final demand services was attributed to a 2.7% increase in margins for final demand trade services.