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Briefing.com Summary:
*Former leadership stocks remain confronted with selling interest.
*Elevated bond yields and oil prices are acting as a headwind.
*Home Depot topped fiscal Q1 expectations, but comparable store sales were underwhelming.
The stock market was struggling yesterday under the weight of the semiconductor and mega-cap stocks, but President Trump came in for the save in the afternoon session when he said he had called off an attack on Iran at the request of three Middle East leaders and because "serious negotiations are now taking place."
The algorithms feasted on the headline, and what had been a bad day ended up being a less bad day by the close. The market cap-weighted S&P 500 shed less than 0.1%; meanwhile, the equal-weighted S&P 500 added 0.6%.
The stock market, however, finds itself in similar straits as yesterday morning. The equity futures market is weaker, with eyes on elevated bond yields and oil prices and on continuing weakness in the semiconductor space and among the mega-cap stocks.
Currently, the S&P 500 futures are down 23 points and are trading 0.3% below fair value, the Nasdaq 100 futures are down 166 points and are trading 0.5% below fair value, and the Dow Jones Industrial Average futures are down 67 points and are trading 0.1% below fair value.
This is not to say that there won't be yet another buy-the-dip effort, but the tell right now is that the major indices will start the session on a lower note.
Dow component Home Depot (HD) is a factor in this regard. It is down 0.9% in pre-market action despite topping fiscal Q1 expectations. Comparable store sales and comparable transactions were both underwhelming, though, with the former up just 0.6% and the latter down 1.3%.
Generally speaking, there isn't much in the way of corporate news that is registering with the stock market. That will soon change with NVIDIA's (NVDA) earnings report after Wednesday's close.
The items registering more strongly at the moment include the elevated price of oil (WTI at $108.18/bbl), the elevated level of Treasury yields (2-yr at 4.08% and 10-yr at 4.61%), and the elevated selling interest in leadership stocks.
This is the indigestion phase after the feast that saw the S&P 500 and Nasdaq Composite gain as much as 19% and 29%, respectively, from their March lows.
