Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.6%), and DJIA (-0.2%) are modestly lower early in the afternoon after a surge in oil prices, and several notable post-earnings moves made for a relatively choppy morning.

NVIDIA's (NVDA 219.44, -4.04, -1.81%) earnings release yesterday afternoon included a massive jump in revenues and impressive forward guidance, which is exactly what the market has come to expect from the company. The stock trades lower, though the broader PHLX Semiconductor Index (+0.2%) is now up modestly as memory storage names move higher, which helps the information technology sector (-0.4%) recover from its session lows.

The sector is also supported by a sharp gain in IBM (IBM 241.47, +16.47, +7.32%) after the company and the U.S. Department of Commerce confirmed plans to build America's first purpose-built quantum foundry, supported by a proposed $1 billion CHIPS award.

Meanwhile, Walmart (WMT 120.89, -9.96, -7.61%) turned in a somewhat disappointing earnings report, with EPS coming in just in line while issuing Q2 EPS guidance below expectations. The consumer staples sector (-2.0%) is sharply lower as a result.

Post-earnings weakness in Deere (DE 530.27, -30.19, -5.39%) weighs on the industrials sector (-0.8%), while losses are more modest elsewhere.

The defensive utilities (+0.8%) and health care (+0.1%) sectors trade higher, while the materials sector (+0.1%) also holds a modest gain. 

While weakness remains relatively broad, stocks are considerably improved from their worst levels this morning. Oil prices and Treasury yields surged higher this morning following a report from Reuters that Iran's Supreme Leader called for the country's enriched uranium to remain in Iran, which has cast doubt over yesterday's claim of negotiation progress. The report has been disputed by several reporters and outlets, which has contributed to a steady easing across both yields and oil prices since their worst levels of the session.

Crude oil is currently up $2.18 (+2.2%) to $100.44 per barrel, and the 10-year note yield is up three basis points to 4.60%.

Stocks now trade in a relatively stable range, with the major averages taking a modest step back from yesterday's rally. While there are a few notable post-earnings moves, including NVDIA, which lags despite a blowout earnings report, the market has stabilized from this morning's macro-driven volatility, keeping action relatively subdued in the early afternoon.

Reviewing today's data

• April Housing Starts 1.465 mln (Briefing.com consensus 1.420 mln); Prior was revised to 1.507 mln from 1.502 mln, April Building Permits 1.442 mln (Briefing.com consensus 1.380 mln); Prior was revised to 1.363 mln from 1.372 mln
  • The key takeaway from the report is that there was broad-based weakness across all regions for both single-family starts and single-family building permits, underscoring the headwind posed for builders by rising costs for financing, materials, and labor.
• Weekly Initial Claims 209K (Briefing.com consensus 210K); Prior was revised to 212K from 211K, Weekly Continuing Claims 1.782 mln; Prior was revised to 1.776 mln from 1.782 mln
  • The key takeaway from the report is that there is nothing to see here, meaning there is nothing in these latest numbers that would suggest there has been a sea change in a labor market environment that remains characterized by low firing and low hiring activity.
• May Philadelphia Fed Index -0.4 (Briefing.com consensus 15.5); Prior 26.7
• May S&P Global U.S.Manufacturing PMI - Prelim 55.3; Prior 54.5
• May S&P Global U.S. Services PMI - Prelim 50.9; Prior 51.0