Stock Market Update

[BRIEFING.COM] The stock market has been in a steady decline through most of the session. Losses are sizable, yet haven't wiped out all of yesterday's substantial gains. The S&P 500 trades about 260 points above Tuesday's close.

The narrative hasn't changed much from yesterday, but the market bias shifted markedly. Investors are using yesterday's surge to sell at a more favorable level, cognizant that the 90-day tariff pause that ignited markets yesterday will only last until July 9 unless countries make a trade deal with the U.S.

Participants are also worried about the significant rate on imports from China, which still stands at 145% (125% reciprocal tariff + existing 20% tariff related to fentanyl). 

With tariff concerns still play, inflation concerns are also lingering. Comments from some Fed officials today indicated that the Fed is worried about tariffs driving up inflation and isn't inclined to cut rates soon.

Losses in the mega cap space have an outsized impact on index performance after many of them logged double-digit percentage gains yesterday. NVIDIA (NVDA 107.39, -6.95, -6.0%), Apple (AAPL 187.93, -10.89, -5.5%), and Microsoft (MSFT 375.75, -16.19, -4.1%) are standouts from the space.

The aforementioned factors have overshadowed a positive March CPI report, which showed slowing inflation. 

Reviewing today's economic data:

• March CPI -0.1% (Briefing.com consensus 0.1%); Prior 0.2%, March Core CPI 0.1% (Briefing.com consensus 0.3%); Prior 0.2%
  • The key takeaway from the report is that, while better than expected, it will be discounted as a lasting improvement given the tariff actions that are now taking root across supply chains.
• Weekly Initial Claims 223K (Briefing.com consensus 225K); Prior 219K, Weekly Continuing Claims 1.850 mln; Prior was revised to 1.893 mln from 1.903 mln
  • The key takeaway from the report is that the relatively low level of initial jobless claims remains consistent with an otherwise solid labor market and an economy still in expansion mode.