After Hours Report

The stock market turned in a far more mixed performance this week, with the major averages masking notable weakness beneath the surface. The S&P 500 (+0.1%) and Nasdaq Composite (+0.1%) finished little changed after repeatedly trading at fresh record highs earlier in the week, while the DJIA (-0.2%) ended modestly lower. Broader market participation deteriorated considerably as the week progressed, with the Russell 2000 (-2.4%) and S&P Mid Cap 400 (-2.4%) posting steep losses amid renewed pressure on economically sensitive and rate-sensitive areas of the market.

The macro backdrop remained a key headwind throughout the week. Hotter-than-expected CPI and PPI reports reinforced concerns that inflation remains stubbornly elevated, while renewed geopolitical tensions surrounding Iran pushed crude oil prices sharply higher by week's end. Treasury yields climbed steadily throughout the week as investors continued to scale back expectations for Fed rate cuts and increasingly entertain the possibility that rates could remain restrictive well into next year.

Technology stocks once again provided much of the market's support. The information technology sector rose 1.2%, while the PHLX Semiconductor Index surged 11.1% higher as investors consistently bought pullbacks across AI-linked chipmakers throughout the week. NVIDIA (NVDA) remained a central leadership name, while semiconductor stocks repeatedly rebounded from bouts of profit-taking despite the increasingly difficult rate backdrop.

However, leadership narrowed considerably beneath the surface. The Vanguard Mega Cap Growth ETF climbed 4.0%, significantly outperforming the broader market, while the equal-weighted indices lagged notably throughout the week. Software stocks also displayed relative resilience, with the iShares Expanded Tech-Software ETF advancing 0.7%.

Meanwhile, several economically sensitive groups struggled under the pressure of rising yields and higher oil prices. The consumer discretionary sector fell 3.1%, real estate dropped 2.6%, materials lost 2.3%, and utilities declined 2.1%. Homebuilders were particularly weak as higher Treasury yields pressured housing affordability, sending the iShares U.S. Home Construction ETF tumbling 7.0% for the week.

Elsewhere, the energy sector (+6.8%) was the clear outperformer as crude oil prices surged amid renewed fears surrounding the U.S.-Iran conflict and potential disruptions tied to the Strait of Hormuz.

Overall, the week highlighted the increasingly fragile balance supporting the broader market. AI-driven enthusiasm and continued strength across mega-cap technology stocks helped keep the major averages near record territory, but narrowing breadth, rising Treasury yields, persistent inflation pressures, and surging oil prices created growing headwinds beneath the surface. The market has repeatedly shown a willingness to buy pullbacks across technology and semiconductor names, though this week's action suggested investors are becoming less willing to extend that same enthusiasm across the broader market.

sorry we have to redo, PHLX retreated 1.6%

The stock market turned in a far more mixed performance this week, with the major averages masking notable weakness beneath the surface. The S&P 500 (+0.1%) and Nasdaq Composite (+0.1%) finished little changed after repeatedly trading at fresh record highs earlier in the week, while the DJIA (-0.2%) ended modestly lower. Broader market participation deteriorated considerably as the week progressed, with the Russell 2000 (-2.4%) and S&P Mid Cap 400 (-2.4%) posting steep losses amid renewed pressure on economically sensitive and rate-sensitive areas of the market.

The macro backdrop remained a key headwind throughout the week. Hotter-than-expected CPI and PPI reports reinforced concerns that inflation remains stubbornly elevated, while renewed geopolitical tensions surrounding Iran pushed crude oil prices sharply higher by week's end. Treasury yields climbed steadily throughout the week as investors continued to scale back expectations for Fed rate cuts and increasingly entertain the possibility that rates could remain restrictive well into next year.

Technology stocks still provided relative support, though leadership became more selective as the week progressed. The information technology sector rose 1.2%, supported by continued strength across mega-cap and AI-linked names. NVIDIA (NVDA) remained a central leadership stock throughout the week, while software stocks also displayed relative resilience, with the iShares Expanded Tech-Software ETF advancing 0.7%.

However, semiconductor stocks turned increasingly volatile as rising yields pressured valuations and investors took profits following recent outsized gains. The PHLX Semiconductor Index slipped 1.6% for the week after several sharp swings in both directions, reflecting a more cautious tone beneath the surface even as investors continued stepping in on pullbacks across select AI-related names.

Leadership also narrowed considerably across the broader market. The Vanguard Mega Cap Growth ETF climbed 4.0%, significantly outperforming the broader market, while equal-weighted indices lagged notably throughout the week.

Meanwhile, several economically sensitive groups struggled under the pressure of rising yields and higher oil prices. The consumer discretionary sector fell 3.1%, real estate dropped 2.6%, materials lost 2.3%, and utilities declined 2.1%. Homebuilders were particularly weak as higher Treasury yields pressured housing affordability, sending the iShares U.S. Home Construction ETF tumbling 7.0% for the week.

Elsewhere, the energy sector (+6.8%) was the clear outperformer as crude oil prices surged amid renewed fears surrounding the U.S.-Iran conflict and potential disruptions tied to the Strait of Hormuz.

Overall, the week highlighted the increasingly fragile balance supporting the broader market. AI-driven enthusiasm and continued resilience across mega-cap technology stocks helped keep the major averages near record territory, but narrowing breadth, rising Treasury yields, persistent inflation pressures, and surging oil prices created growing headwinds beneath the surface. The market has repeatedly shown a willingness to buy pullbacks across leading technology names, though this week's action suggested investors are becoming less willing to extend that same enthusiasm across the broader market.

• S&P 500: +0.1%
• Nasdaq Composite: -0.1%
• DJIA: -0.2%
• Russell 2000: -2.4%
• S&P Mid Cap 400: -2.4%

Monday:

The stock market had a somewhat choppy start to the week, with mixed strength in the broader market weighing against another session of semiconductor leadership. The S&P 500 (+0.2%), Nasdaq Composite (+0.2%), and DJIA (+0.1%) finished modestly higher, though it was enough to secure record highs for the S&P 500 and Nasdaq Composite.

The PHLX Semiconductor started the week with a 2.3% gain, helping the top-weighted information technology sector (+0.8%) secure a higher finish. Lumentum (LITE 1053.09, +149.29, +16.52%) was the best-performing S&P 500 component after headlines that the stock will join the Nasdaq 100 Index next Monday, May 18, while Coherent (COHR 379.69, +44.43, +13.25%) and Qualcomm (QCOM 237.53, +18.44, +8.42%) advanced after Bloomberg reported executives from both companies were invited to President Trump's China trip later this week.

Memory names also posted impressive gains, and NVIDIA (NVDA 219.44, +4.24, +1.97%) was a "magnificent seven" standout amid a mostly lower session for the group. Tesla (TSLA 445.08, +16.73, +3.91%) was another notable exception to this trend, limiting broad losses in the consumer discretionary sector (-0.6%).

Electronic production equipment names such as Vertiv (VRT 367.92, +27.95, +8.22%) also traded higher as investors increasingly view the AI-buildout cycle as a catalyst for the group, helping the industrials sector (+1.0%) notch a solid gain today.

The materials sector (+1.4%) was another top mover as chemical and precious metal companies outperformed, while the energy sector (+2.6%) captured the widest gain amid an increase in oil prices.

President Trump lamented Iran's response to the latest U.S. peace proposal as "totally unacceptable", later telling reporters that the ceasefire with Iran is now on "massive life support." Crude oil futures settled today's session $2.68 higher (+2.8%) at $98.07 per barrel.

Five S&P 500 sectors traded lower today, though the losses were relatively modest. Only the communication services sector (-2.3%) finished with a loss of 1.0% or wider, facing pressure across multiple notable components. Alphabet (GOOG 386.77, -10.28, -2.59%) was a mega-cap laggard, while Netflix (NFLX 85.45, -2.04, -2.33%) moved lower after the Texas Attorney General filed a suit against the company, and The Trade Desk (TTD 21.52, -1.56, -6.76%) faced pressure after HSBC downgraded the stock to Reduce from Hold.

Meanwhile, Fox (FOX 61.18, +4.58, +8.09%) outperformed after topping earnings estimates.

This week is notably lighter on the earnings front, with only 11 S&P 500 companies set to report results. While earnings growth has largely exceeded expectations and provided the market with a major tailwind, focus could shift back towards geopolitical volatility and energy prices, especially given tomorrow's release of the April CPI report (Briefing.com consensus 0.6%). Despite the relatively subdued finish, continued semiconductor leadership and resilience at the index level kept the broader uptrend intact.

U.S. Treasuries started the week on a lower note with the belly leading a Monday slide that lifted yields back to levels from last Tuesday. The U.S. Treasury kicked off this week's note auction slate with a weak sale of $58 bln in 3-year notes ahead of tomorrow's $42 bln 10-year note auction. The 2-year note yield settled up six basis points to 3.95%, and the 10-year note yield settled up five basis points to 4.41%.

Reviewing today's data:

• April Existing Home Sales 4.02 mln (Briefing.com consensus 4.05 mln); Prior was revised to 4.01 mln from 3.98 mln
  
  • The key takeaway from the report is that affordability conditions improved, with mortgage rates lower than a year ago and average income gains exceeding home price gains, yet overall sales activity remained tepid. The exact reason why is hard to pinpoint. A range of factors could be pertinent, from tight supply and not being able to find the right home to a bet that mortgage rates will come down more or to fraying confidence in job security.

Tuesday:

The stock market had an eventful session today, with firm inflation readings, rising Treasury yields, and higher oil prices pressuring tech and select mega-cap names, though solid rotational buying across the broader market helped the major averages finish well above their session lows. The Nasdaq Composite (-0.7%) lagged amid the weakness in growth stocks, while the S&P 500 (-0.2%) finished modestly lower, and strength in the broader market pushed the DJIA (+0.1%) to a slight gain late in the session.

Stocks opened to broad losses following the release of the April CPI report, which showed headline CPI (0.6%; Briefing.com consensus 0.6%) and Core CPI (0.4%; Briefing.com consensus 0.4%) in line with month-over-month expectations, though the year-over-year rates increased to 3.6% for headline CPI and 2.8% for core CPI, both remaining well above the Fed's 2.0% target. The increase in year-over-year inflation put upward pressure on Treasury yields, which was compounded by another surge in oil prices today (crude oil futures settled today's session $4.23 higher (+4.3%) at $102.30 per barrel).

Growth-oriented pockets of the stock market lagged as a result. In particular, the information technology sector (-1.0%) faced considerable pressure across its semiconductor components, which saw the PHLX Semiconductor Index (-3.0%) give back yesterday's gain. Qualcomm (QCOM 210.31, -27.22, -11.46%), Intel (INTC 120.61, -8.83, -6.82%), and Sandisk (SNDK 1451.94, -95.62, -6.18%) were among the worst-performing S&P 500 components after surging in yesterday's session.

However, it is worth noting that both the Semiconductor Index and the broader technology sector roughly halved their losses from session lows as investors bought into this morning's dip during the afternoon.

A late push back into positive territory from NVIDIA (NVDA 220.91, +1.47, +0.67%) added support and helped the Vanguard Mega Cap Growth ETF (-0.3%) finish well off its earlier lows.

There was some lingering weakness in Tesla (TSLA 433.44, -11.56, -2.60%) and Amazon (AMZN 265.82, -3.17, -1.18%) that kept the consumer discretionary sector (-1.0%) firmly lower, but that was the extent of considerable losses at the sector level.

The industrials (-0.4%) and materials (-0.1%) sectors also finished with losses that were tame compared to their earlier levels.

Seven S&P 500 sectors finished higher, which is relatively impressive considering eight sectors traded lower this morning. The health care (+1.9%) and consumer staples (+1.6%) sectors led the advance as investors sought more defensive holdings, padding their gains throughout the session even as the rotational buying broadened and growth stocks improved from their worst levels.

Investors also did some bargain hunting in the financials sector (+0.7%), which remains the worst-performing S&P 500 sector so far this year, while the energy sector (+0.7%) was supported by the increase in oil prices.

Outside of the S&P 500, the Russell 2000 (-1.0%) and S&P Mid Cap 400 (-0.7%) also finished well off their session lows, though both still underperformed as the market displayed a risk-off tone for much of the session.

All told, today's session felt somewhat like two distinct trading days in one. Early selling pressure tied to oil-driven inflation concerns and rising yields sent stocks sharply lower, particularly across growth and semiconductor names, but the tone improved considerably as rotational buying broadened and investors stepped back into many of the market's recent leaders. Despite the early weakness, the S&P 500 and Nasdaq Composite still finished not far below yesterday's record highs, leaving the broader uptrend largely intact and suggesting another rebound in semiconductor stocks could quickly fuel a renewed push into record territory.

U.S. Treasuries saw a continuation of Monday's poor start to the week, resulting in the highest settlement for the 30-year yield in nearly a year while yields on 10s and shorter tenors also finished at levels from last May, though they remained below their intraday highs from late March. The complex extended its losses during the final couple hours of action after the U.S. Treasury followed yesterday's weak 3-year note offering with a poor $42 billion 10-year note sale.

The 2-year note yield settled up five basis points to 4.00%, the 10-year note yield settled up five basis points to 4.46%, and the 30-year note yield settled up five basis points to 5.03%. 

Reviewing today's data:

• April NFIB Small Business Optimism 95.9 (Briefing.com consensus 96.1); Prior 95.8
• April CPI 0.6% (Briefing.com consensus 0.6%); Prior 0.9%, April Core CPI 0.4% (Briefing.com consensus 0.4%); Prior 0.2%
  • The key takeaway from the report is the elevated inflation readings, which are well above the Fed's 2.0% inflation target and a signal not to expect a rate cut anytime soon.
• The Treasury Department reported a $215.0 billion surplus for April (Briefing.com consensus: $202.5 bln), which was $43 billion less than the surplus reported for April 2025. Receipts totaled $837.3 billion, while outlays reached $622.3 billion.
  
  • The key takeaway from the report is the recognition that a healthy level of tax receipts helped fuel a narrowing in the fiscal year-to-date deficit versus the year-ago period. Moreover, the deficit for the 12-month period ending in April is down 16% from the same period a year ago.

Wednesday:

The major averages finished mostly higher today as a rebound across mega-cap and tech names pushed the S&P 500 (+0.6%) and Nasdaq Composite (+1.2%) to fresh record highs, while mixed strength in the broader market following another hotter-than-expected inflation reading kept the DJIA (-0.1%) modestly lower.

Stocks opened lower following the release of the April PPI report, as 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. The year-over-year readings also accelerated, with headline PPI rising to 6.0% from 4.3% in March and core PPI increasing to 5.2% from 4.0%, reviving concerns that the Fed may need to keep policy restrictive for longer.

There was some upward pressure on longer-dated treasuries, and rate-sensitive pockets of the market generally lagged, but it did not take long for buyers to step in on yesterday's weakness across the tech stocks.

Semiconductors were primed for a rally after yesterday's retreat, and the PHLX Semiconductor Index (+2.6%) handily recovered its losses and extended higher. onsemi (ON 115.71, +11.60, +11.14%) was one of the best-performing S&P 500 components, while NVIDIA (NVDA 225.83, +5.05, +2.29%) provided solid leadership after Bloomberg reported that CEO Jensen Huang will join President Trump on his trip to China.

Elsewhere in the information technology sector (+1.0%), Apple (AAPL 298.87, +4.07, +1.38%) traded to new all-time highs, while software names finished mostly lower.

Mega-cap leadership extended beyond the technology sector, with Alphabet (GOOG 399.06, +15.24, +3.97%) and Meta Platforms (META 616.63, +13.63, +2.26%) pushing the communication services sector (+2.7%) to the top of the leaderboard, while strength in Amazon (AMZN 270.13, +4.31, +1.62%) and Tesla (TSLA 445.17, +11.72, +2.70%) outweighed broad weakness in the consumer discretionary sector (+0.8%).

The Vanguard Mega Cap Growth ETF finished 1.0% higher, and the market-weighted S&P 500 (+0.6%) decidedly outperformed the S&P 500 Equal Weighted Index (-0.4%).

Elsewhere in the consumer discretionary sector, Ford Motor (F 13.58, +1.60, +13.30%) finished as the top-performing S&P 500 component following positive analyst commentary from Morgan Stanley around the company's new energy storage business.

Gains across the broader market were generally more modest, though the health care sector (+0.7%) meaningfully expanded upon yesterday's gains.

Meanwhile, four S&P 500 sectors finished lower. The rate-sensitive utilities (-1.3%) and real estate (-0.9%) sectors were among the worst-performers amid rising Treasury yields, while the financials sector (-1.1%) faced broad weakness and underperformance across financial services names.

Headlines surrounding the U.S.-Iran conflict were relatively muted today as President Trump arrived in Beijing for a summit with Chinese President Xi Jinping, where the leaders are expected to discuss tariffs, the Iran war, and Taiwan over the coming days. Crude oil futures settled today's session $1.29 lower (-1.3%) at $101.01 per barrel. 

Ultimately, strong leadership from mega-cap and AI-linked tech names was enough to push the major indices to fresh record highs, with investors largely brushing off the hotter inflation data and firmer rate backdrop. Even with participation still fairly narrow, the market's largest components continue to do the heavy lifting and keep the broader uptrend intact.

Longer-dated U.S. Treasuries recorded their third consecutive day of losses, while the short end resisted even though the market received a much hotter-than-expected PPI report for April. The U.S. Treasury sold $25 bln in 30-year bonds to weak demand, but the market held its ground after the auction. The 2-year note yield settled down one basis point to 3.99%, the 10-year note yield settled up two basis points to 4.48%, and the 30-year note yield settled up two basis points to 5.05%.

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.

Thursday:

Sustained enthusiasm across the AI trade sent the S&P 500 (+0.8%) and Nasdaq Composite (+0.9%) to fresh record highs again today, while the DJIA (+0.8%) reclaimed and closed above the 50,000 mark.

There was relatively firmer participation across the broader market today, which helped the DJIA keep pace with the other major indices, but its gain is also largely due to an impressive post-earnings rally from Cisco (CSCO 115.53, +13.66, +13.41%). The company decidedly topped earnings expectations and issued much better-than-expected Q4 guidance driven by accelerating AI infrastructure demand and broad-based networking strength.

Cisco's gain made it the top-performing component of the information technology sector (+1.9%) and the S&P 500 as a whole.

The world's largest company by market capitalization, NVIDIA (NVDA 235.74, +9.92, +4.39%), also posted a solid gain today that leaves it on the doorstep of a double-digit gain for the week. Reuters reported that the U.S. approved sales of the company's H200 chip to ten Chinese companies, while UBS raised its price target on the stock to $275 from $245.

NVIDIA's gain helped the PHLX Semiconductor Index (+0.5%) finish higher despite some profit-taking after yesterday's rally. Meanwhile, software stocks outperformed, sending the iShares GS Software ETF 2.3% higher. 

The eagerly anticipated IPO of Cerebras Systems (CBRS 311.07, +126.07, +68.15%) added to today's AI momentum, with the upsized 30.0 million-share deal pricing at $185 per share, well above the already raised $150-$160 range, before opening at $350 for an 89% first-trade gain. The deal underscores the huge appetite for pure-play AI infrastructure exposure, but it also leaves investors staring at a nose-bleed valuation with a market cap near $70 billion and a price-to-sales multiple close to 140x.

Elsewhere, gains were more modest, with six total S&P 500 sectors finishing higher. The energy sector (+0.8%) was a top performer amid a modest increase in oil prices, though geopolitical headlines remained muted today, with the summit between President Trump and Chinese President Xi producing little in the way of surprises.

Mega-cap stocks outside of the technology sector faced some profit-taking after yesterday's rally, which contributed to weakness in the consumer discretionary (-0.3%) and communication services (-0.2%) sectors.

The materials (-0.8%) and real estate (-0.6%) sectors underperformed.

Outside of the S&P 500, the Russell 2000 (+0.7%) and S&P Mid Cap 400 (+0.4%) captured decent gains.

Overall, it was another winning session for stocks as the AI trade was supported by several catalysts, while the broader market fared better than in recent sessions marked by narrow leadership. Weaker breadth has prompted some analyst concerns around stretched valuations and the potential for speculative excess across AI-linked names, but the exceptionally strong Q1 earnings season and continued flow of supportive catalysts have helped reinforce confidence in the rally and provide meaningful fundamental support for many of the market's leaders. Additionally, investors have consistently stepped in to buy recent pullbacks across semiconductors and mega-cap tech stocks, reinforcing the market's momentum and helping keep the major averages near record territory.

U.S. Treasuries finished Thursday on a mostly higher note, though intraday action saw a pullback in shorter tenors while the long end outperfo rmed, hanging onto the bulk of today's starting gains. The 2-year note yield finished unchanged at 3.99%, and the 10-year note yield settled down two basis points to 4.46%.  

Reviewing today's data:

• April Retail Sales 0.5% (Briefing.com consensus 0.4%); Prior was revised to 1.6% from 1.7%, April Retail Sales, ex-auto 0.7% (Briefing.com consensus 0.4%); Prior 1.9%
  • The key takeaway from the report is that solid spending activity was seen across most retail categories in April, which is when consumers were digesting the gas price shock from the Iran war. Excluding auto and gasoline station sales, retail sales were up 0.5% month-over-month.
• Weekly Initial Claims 211K (Briefing.com consensus 208K); Prior was revised to 199K from 200K, Weekly Continuing Claims 1.782 mln; Prior was revised to 1.758 mln from 1.766 mln
  • The key takeaway from the report is that, even though initial and continuing jobless claims were up in the latest week, neither has risen to a level that would ring alarm bells about a serious deterioration in the labor market.
• April Import Prices 1.9%; Prior was revised to 0.9% from 0.8%
• April Import Price ex-oil 0.8%; Prior was revised to 0.2% from 0.6%
• April Export Prices 3.3%; Prior was revised to 1.5% from 1.6%
• April Export Prices ex-ag. 3.4%; Prior was revised to 1.6% from 1.7%
• March Business Inventories 0.9% (Briefing.com consensus 0.3%); Prior 0.4%

Friday:

Stocks ended a record-setting week on a lower note, with the S&P 500 (-1.2%), Nasdaq Composite (-1.5%), and DJIA (-1.1%) retreating from recent record highs amid a surge in oil prices and Treasury yields.

Crude oil futures settled today's session $4.33 higher (+4.3%) at $105.49 per barrel amid fears that the U.S. could re-engage in military operations against Iran after the summit between President Trump and President Xi failed to produce any meaningful policy changes.

The lack of surprises from the summit also included no mention of NVIDIA (NVDA 225.32, -10.42, -4.42%) H200 chip sales to China, while China's pledge to purchase 200 Boeing (BA 220.49, -8.72, -3.80%) jets was largely in line with expectations.

More important than any individual stock move, though, was the upward pressure on Treasuries that sent yields to fresh highs for the year amid renewed inflation concerns tied to the rise in oil prices. The 2-year note yield settled up nine basis points to 4.08%, while the 10-year note yield settled up 13 basis points to 4.60%.

Higher interest rates reduce the present value of future cash flows, and the market has clearly been placing a significant premium on the long-term earnings potential tied to the AI buildout.

The PHLX Semiconductor Index finished 4.0% lower today, ending the week with a loss after several choppy sessions. Corning (GLW 191.92, -16.36, -7.85%) and Micron (MU 724.66, -51.35, -6.62%) were among the worst-performing components of the information technology sector (-1.6%).

However, the sector was supported somewhat by relative strength in software stocks, with the iShares GS Software ETF finishing 1.3% higher. Microsoft (MSFT 421.92, +12.49, +3.05%) was a "Magnificent Seven" standout after CNBC reported that Pershing Square has built a position in the company.

Meanwhile, Tesla (TSLA 422.04, -21.26, -4.79%) was a notable laggard, which pressured the consumer discretionary sector (-1.8%).

The sector also faced weakness across its homebuilder components due to rising interest rates, which weighed on building products names in the industrials sector (-1.8%) as well.

The rate-sensitive utilities (-2.4%) and real estate (-1.6%) sectors also underperformed, while the materials sector (-2.7%) finished with the widest loss amid broad weakness in metals and mining names.

Only the energy sector (+2.3%) managed to finish higher amid the surge in oil prices today.

Outside of the S&P 500, the Russell 2000 (-2.4%) and S&P Mid Cap 400 (-1.7%) underperformed amid the broad risk-off tone and renewed pressure on economically-sensitive and rate-sensitive stocks.

Overall, today's session was a reminder that the macro backdrop remains a meaningful headwind for equities even after a strong AI-fueled earnings season helped drive the market to repeated record highs in recent weeks. The market entered the year expecting roughly two Fed rate cuts in 2026, but persistent inflation pressures and the recent surge in oil prices have now shifted expectations toward the possibility of a rate hike next January. The question now is whether investors will once again step in to buy today's weakness across tech and semiconductor stocks, or if rising yields and inflation concerns begin to weigh more meaningfully on the market's momentum.

Reviewing today's data:

• May Empire State Manufacturing 19.6 (Briefing.com consensus 6.2); Prior 11.0
• April Industrial Production 0.7% (Briefing.com consensus 0.2%); Prior was revised to -0.3% from -0.5%, April Capacity Utilization 76.1% (Briefing.com consensus 75.7%); Prior 75.7%
  
  • The key takeaway from the report is that it was underpinned by solid manufacturing output that was led by the production of durables. Excluding motor vehicles and parts, manufacturing output was up 0.3% month-over-month.