Stock Market Update

[BRIEFING.COM] The stock market is mixed just after midday, with strength in select large-cap technology stocks helping offset weakness in the broader market. The S&P 500 (+0.2%), Nasdaq Composite (+0.5%), and DJIA (-0.3%) are mostly higher, trading in a relatively stable range throughout the session as the market's most important drivers came before the open.

The primary catalyst today is a surge in crude oil prices after reports that Iran has stopped messaging the U.S. in protest of Israel's strikes in Lebanon. Axios reported that Hezbollah has signaled readiness for a full ceasefire with Israel, but crude oil remains $6.93 (+7.9%) higher at $94.29 per barrel.

Technology stocks are providing an important offset. NVIDIA (NVDA 221.83, +10.69, +5.06%) and Microsoft (MSFT 462.04, +11.80, +2.62%) are higher after announcing a partnership to build a secure Windows platform for on-device AI agents as part of NVIDIA's push deeper into the personal computer market. The news is also driving strength in Dell (DELL 454.33, +33.42, +7.94%), while software stocks broadly continue their recent rebound effort.

Outside of technology sector (+1.9%), however, participation remains limited, with many mega-cap stocks trading lower and broader market measures, including small- and mid-cap stocks, underperforming. The consumer discretionary (-2.4%) and utilities (-2.4%) are among the weakest groups as the jump in oil prices pressures sentiment, though nine total S&P 500 sectors trade lower.

The major averages have traded within a relatively stable range since the open, although several M&A-related headlines have generated notable stock-specific moves. MGM Resorts (MGM 50.52, +6.84, +15.67%) is sharply higher after confirming it received an acquisition proposal from IAC, while Taylor Morrison Home (TMHC 71.64, +13.14, +22.47%) is surging following news that Berkshire Hathaway Inc. (BRK-B 468.86, -5.62, -1.18%) agreed to acquire the company in an $8.5 billion all-cash transaction.

Separately, FedEx (FDX 334.52, -77.22, -18.76%) completed the spin-off of FedEx Freight (FDXF 156.52, -3.85, -2.40%), which began regular-way trading today as an independent publicly traded company.

In sum, strong gains in a handful of AI-related technology stocks are helping offset the broader headwinds created by the sharp spike in oil prices and renewed geopolitical uncertainty.

Reviewing today's data:

• May S&P Global U.S. Manufacturing PMI - Final 55.1 (May Prelim was 55.3)
• April Construction Spending: 0.4% vs Briefing.com consensus of 0.3%; March was revised to 0.2% from 0.6%
  • The key takeaway from the report is that it included a sharp downward revision to growth rate from March (0.2%), resulting in a weak report overall. New single-family construction spending increased a solid 1.4% in April but was still down 2.9% year-over-year.
• May ISM Manufacturing Index 54.0% vs Briefing.com consensus of 53.1%; April was 52.7
  • The key takeaway from the report is that it continued showing some stagflationary elements for the second consecutive month, as employment remained in contraction—though at a slower rate—while the prices index only dipped slightly from its sharpest increase since early 2022.