Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.3%), Nasdaq Composite (-0.6%), and DJIA (-0.2%) are moving lower just after midday as higher oil prices and widening losses across mega-cap stocks weigh on the major averages following another subdued morning.

Stocks currently sit at session lows, coinciding with oil's move toward its highs of the day. Crude initially retreated from its overnight highs after Bloomberg reported that Pakistan's Defense Minister Khawaja Asif said the U.S. and Iran are close to "some sort of an arrangement." More recent reports, however, indicate that Iran will not reopen the Strait of Hormuz until its demands are met, with WTI crude currently up $0.95 (+1.2%) to $83.10 per barrel. The energy sector (+0.9%) is the best performing S&P 500 sector as a result.

Much of the weakness at the index level stems from the market's largest stocks. The Vanguard Mega Cap Growth ETF is down 0.5%, with Alphabet (GOOG 346.89, -8.95, -2.52%) and Amazon (AMZN 271.89, -6.20, -2.23%) weighing heavily on the communication services (-1.3%) and consumer discretionary (-0.8%) sectors, respectively. SpaceX (SPCX 131.65, -7.09, -5.11%) is another notable laggard, falling back below its $135 IPO price after closing above that level yesterday for the first time in weeks.

The information technology sector (-0.4%) also contributes to the modest retreat as software stocks give back some of yesterday's gains. Oracle (ORCL 144.81, -6.24, -4.13%) is among the laggards, and the iShares GS Software ETF (IGV) is down 1.0%.

Semiconductor stocks are providing some offsetting support after opening firmly higher, though the group has steadily surrendered much of its early advance. The PHLX Semiconductor Index (+0.4%) is at session lows as NVIDIA (NVDA 217.65, +0.10, +0.05%) gives back most of its opening gain. The stock initially rebounded from yesterday's late selloff, which followed news of its initiative with several major asset managers to mobilize up to $500 billion in financing for AI compute infrastructure.

KKR (KKR 111.08, +7.25, +6.98%) and Apollo Global Management (APO 140.56, +8.54, +6.47%), both participants in the initiative, are among today's best-performing S&P 500 components.

The industrials sector (+0.6%) has followed the semiconductor group higher, with the usual collection of electrical equipment names outperforming alongside a solid gain in Caterpillar (CAT 845.83, +8.25, +0.98%) after several consecutive weaker showings.

Elsewhere, the S&P 500 Equal Weight Index (+0.3%) remains higher, while the Russell 2000 (+0.4%) and S&P MidCap 400 (+0.4%) outperform amid some modest easing in Treasury yields.

So far, today's action remains relatively subdued ahead of tomorrow's July Consumer Price Index. Renewed uncertainty surrounding the Strait of Hormuz and weakness across several mega-cap stocks are keeping the headline indices modestly lower, though strength across several cyclical areas and the broader market points to a steadier tone beneath the surface.

Reviewing today's data:

• July NFIB Small Business Optimism 99.8 (Briefing.com consensus 97.1); Prior 97.4
• July Existing Home Sales 4.06 mln (Briefing.com consensus 4.07 mln); Prior was revised to 4.13 mln from 4.09 mln
  • The key takeaway from the report is that mortgage rates above 6.00%, limited inventory, and elevated prices continue to work against stronger existing home sales activity.