Stock Market Update

[BRIEFING.COM] The stock market had a somewhat lackluster session after last week's volatile price action. The S&P 500 closed less than one point above its prior closing level while the Dow Jones Industrial Average (-0.4%) and Nasdaq Composite (+0.2%) closed slightly lower and slightly higher than Friday's settlement.

The muted action was due to hesitation in front of market-moving economic releases. The Producer Price Index (Tuesday), the Consumer Price Index (Wednesday), Retail Sales (Thursday), and Housing Starts (Friday) are among the influential reports.

Only three of the S&P 500 sectors settled higher while the real estate (-0.6%) and communication services (-0.6%) sectors logged the biggest declines. The information technology sector led the pack, rising 0.9%, followed by energy (+0.5%) and utilities (+0.2%).

The info tech sector was boosted by gains in Apple (AAPL 217.53, +1.54, +0.7%), Microsoft (MSFT 406.81, +0.79, +0.2%), NVIDIA (NVDA 109.02, +4.27, +4.1%), and Broadcom (AVGO 148.62, +0.36, +0.2%).

The energy sector reacted to a jump in oil prices ($79.91/bbl, +3.13, +4.1%) on geopolitical angst after the recent death of Hamas political leader Ismail Haniyeh stirred concerns about a retaliation from Iran (and/or its proxies) against Israel. 

Separately, the New York Fed's Survey of Consumer Expectations showed that median one- and five-year-ahead inflation expectations were unchanged in July at 3.0% and 2.8%, respectively, while median three-year-ahead inflation expectations declined by 0.6 percentage point to 2.3%. This was the lowest level since the survey's started in June 2013.

The 10-yr note yield settled three basis points lower at 3.91% and the 2-yr note yield fell three basis points to 4.02%.

• S&P 500: +12.1% YTD
• Nasdaq Composite:+11.8% YTD
• S&P Midcap 400: +4.8% YTD
• Dow Jones Industrial Average: +4.4% YTD
• Russell 2000: +1.7% YTD

Reviewing today's economic data:

• The Treasury Budget for July showed a deficit of $243.7 billion compared to a deficit of $220.8 billion in the same period a year ago. The July deficit resulted from outlays ($574.1 billion) exceeding receipts ($330.4 billion). The Treasury Budget data is not seasonally adjusted so the July deficit cannot be compared to the June deficit, which was revised higher to $70.9 billion (from -$66.0 billion).
  • The key takeaway from the report is that the U.S. government continues to run large budget deficits, driven in part by net interest costs that are outweighing defense spending.

Tuesday's economic lineup features:

• 6:00 ET: July NFIB Small Business Optimism (prior 91.5)
• 8:30 ET: July PPI (Briefing.com consensus 0.1%; prior 0.2%) and Core PPI (Briefing.com consensus 0.2%; prior 0.4%)