Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.4%) and Nasdaq Composite (+1.0%) remain higher just after midday, while the DJIA (-0.1%) lags amid a busy session featuring earnings reports from major banks, a softer-than-expected inflation reading, and continued geopolitical developments. Despite the numerous headlines, trading continues to be largely dictated by the market's familiar back-and-forth across semiconductor stocks.

The information technology sector (+1.4%) leads the advance as investors continue buying back yesterday's weakness across chipmakers. The PHLX Semiconductor Index is up 2.9%, while NVIDIA (NVDA 210.82, +7.29, +3.58%) is a "Magnificent Seven" standout. The rebound across semiconductor stocks has helped growth-oriented names outperform more broadly, with the Vanguard Mega Cap Growth ETF up 0.9%.

IBM (IBM 218.62, -71.61, -24.67%) remains a significant drag on the sector after issuing downside guidance, losing nearly a quarter of its market value.

The stock's plunge contributes to the underperformance of the DJIA, though much of that weakness has been offset by a sharp gain in Goldman Sachs (GS 1125.98, +80.07, +7.66%), which delivered perhaps the strongest earnings beat among this morning's slate of major bank reports. Elsewhere in the financials sector (+0.4%), JPMorgan Chase (JPM 340.40, +5.87, +1.75%) and Bank of America (BAC 60.60, +1.10, +1.86%) also trade higher following earnings, while Wells Fargo (WFC 85.79, -1.88, -2.14%) and Citigroup (C 134.39, -6.32, -4.49%) lag despite both topping expectations.

Today's June CPI report has also provided meaningful support for equities. Headline CPI fell 0.4% month over month (Briefing.com consensus: -0.1%), helping ease concerns after Fed Governor Christopher Waller (voting FOMC member) suggested yesterday that another hot inflation reading could warrant a near-term rate hike. The CME FedWatch Tool now assigns an 83.4% probability to the Fed holding rates steady at its July meeting, up from 58.3% yesterday, although markets continue to expect a rate hike in September. The market also heard from Fed Chair Kevin Warsh today as he testified before the House Financial Services Committee. Mr. Warsh reaffirmed his commitment to delivering price stability, and his comments did not deliver any market-moving surprises.

Oil prices remain volatile as geopolitical headlines continue to develop. WTI crude oil is up $1.21 (+1.5%) to $79.32 per barrel, near its earlier highs that followed President Trump's formal notification of Congress that the U.S. is at war with Iran. Just before midday, President Trump announced that the U.S. naval blockade would apply only to ships departing Iranian ports, which sent oil below its baseline, though it has steadily crept back up.

Participation in the broader market has deteriorated since the open. Four S&P 500 sectors trade higher, as investors rotate away from more defensive areas of the market. The health care sector (-1.9%) is the weakest performer, housing several of today's worst-performing S&P 500 components (outside of IBM). HCA (HCA 360.10, -30.64, -7.84%) lowered its 2026 earnings guidance and Biogen (BIIB 193.32, -15.72, -7.52%) fell following disappointing clinical trial data. The consumer staples sector (-1.0%) also lags, weighed down in part by Brown-Forman Corporation (BF-B 24.98, -1.27, -4.84%) after the company announced its CEO plans to retire.

So far, today's session illustrates that despite a crowded news calendar, the market continues to weigh competing forces. Softer inflation data has fueled renewed buying across growth stocks, while elevated oil prices temper enthusiasm elsewhere, leaving the semiconductor trade at the center of the market's direction.

Reviewing today's data:

• June NFIB Small Business Optimism 97.4 (Briefing.com consensus 95.6); Prior 95.3
• June CPI -0.4% (Briefing.com consensus -0.1%); Prior 0.5%, June Core CPI 0.0% (Briefing.com consensus 0.2%); Prior 0.2%
  • The key takeaway from the report is the softening in core inflation and the added softening in super core inflation, which excludes food, energy, and shelter. That component was up just 2.1% year-over-year. Inflation has not been slayed, but this report should be enough to keep the FOMC on hold at its July 28-29 meeting.

(Correction: The original version said there was a 16.6% probability yesterday of the Fed holding steady at its July meeting. The probability of holding steady a day ago was 58.3%.)