Stock Market Update

[BRIEFING.COM] The major equity indices closed higher for a third consecutive session. This price action pushed the S&P 500 further above its 200-day moving average (5,754). The moves were modest, however, and mostly driven by gains in the mega cap space.

There was an overall negative bias under the index surface as participants continue to weigh worries about US trade policy and economic growth. The latter was piqued by this morning's economic releases. 

The Consumer Confidence Index showed a fourth consecutive decline, and the Expectations Index fell to its lowest level (65.2) in 12 years, with worries about future employment prospects and inflation pacing that downturn. Separately, new home sales increased a modest 1.8% month-over-month in February, yet higher-priced homes made up a smaller percentage of sales than the prior month.

In housing market-related news, KB Home's (KBH 58.57, -3.22, -5.2%) disappointing earnings and guidance contributed to the downside bias today. Shares hit a 52-week low after the homebuilder reported below-consensus Q1 earnings and lowered its FY25 housing revenue outlook, piling onto concerns of an intensifying housing market slowdown. This comes less than one week after competitor Lennar (LEN 117.74, +0.18, +0.2%) issued soft 2Q25 EPS and deliveries guidance.

Treasuries settled higher in another manifestation of growth concerns. The 10-yr yield dropped two basis points to 4.31%, and the 2-yr yield dropped three basis points to 4.00%. On a related note, today's $69 billion 2-yr note sale met strong demand. 

• Dow Jones Industrial Average: +0.1% YTD
• S&P 500: -1.8% YTD
• S&P Midcap 400: -3.6% YTD
• Nasdaq Composite: -5.4% YTD
• Russell 2000: -6.0% YTD

Reviewing today's economic data:

• January FHFA Housing Price Index 0.2%; Prior was revised to 0.5% from 0.4%
• January S&P Case-Shiller Home Price Index 4.7% (Briefing.com consensus 4.6%); Prior 4.5%
• March Consumer Confidence 92.9 (Briefing.com consensus 94.2); Prior was revised to 100.1 from 98.3
  • The key takeaway from the report is that the drop in confidence was guided primarily by the decline in consumers' outlook, which was driven by worries about inflation and future employment prospects, the latter of which hit a 12-year low. This can be a combination for a pullback in discretionary spending.
• February New Home Sales 676K (Briefing.com consensus 680K); Prior was revised to 664K from 675K
  • The key takeaway from the report is that new home sales in February were aided by the drop in mortgage rates, yet affordability constraints remained a headwind as sales of higher-priced homes accounted for a smaller percentage of new home sales in February than the prior month.

Wednesday's economic lineup features: 

• 7:00 ET: Weekly MBA Mortgage Index (prior -6.2%)
• 8:30 ET: February Durable Orders (Briefing.com consensus -1.2%; prior 3.1%) and Durable Orders ex-transport (Briefing.com consensus 0.1%; prior 0.0%)
• 10:30 ET: Weekly crude oil inventories (prior +1.75 mln)