Stock Market Update

[BRIEFING.COM] The stock market trades lower at the index level. The S&P 500 (-1.3%), the Nasdaq Composite (-2.1%), and the Dow Jones Industrial Average (-0.6%) sit near their worst levels of the session.

NVIDIA (NVDA 103.63, -8.45, -7.6%) has an outsized impact on index performance after saying it expects Q1 results to include up to $5.5 billion of charges associated with H20 products due to export restrictions for China. AMD (AMD 88.55, -6.74, -7.1%) also announced an expected impact of $800 million. Other chipmakers have underperformed as well, leading the PHLX Semiconductor Index (SOX) to trade 4.0% lower.

The announcements have kept tariff concerns top of mind for investors, yet the broader equity market is holding up okay. The Invesco S&P 500 Equal Weight ETF (RSP) is 0.3% lower and market breadth is positive at the NYSE. Advancing issues outpace declining issues by an 11-to-10 margin.

This morning's economic data provided a support catalyst for stocks. Total retail sales increased 1.4% month-over-month in March (Briefing.com consensus 1.3%) following an unrevised 0.2% increase in February. Excluding autos, retail sales rose 0.5% month-over-month (Briefing.com consensus 0.2%) following an upwardly revised 0.7% increase (from 0.3%) in February.

Some enthusiasm around the report has been tempered by the sense that there is likely a drive to get in front of tariff actions, which may have inflated the results. 

United Airlines (UAL 68.02, +.00, +1.5%) is a notable winner after reporting earnings. The company also issued two sets of EPS guidance for FY25, citing heightened uncertainty in the macro environment. 

Other names that reported earnings garnered negative responses. ASML (ASML 646.57, -36.43, -5.3%), J.B. Hunt Transport (JBHT 125.51, -9.60, -7.1%), Interactive Brokers (IBKR 157.16, -16.27, -9.4%), and Omnicom (OMC 72.78, -4.05, -5.3%) were among the standouts in that respect.

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index -8.5%; Prior 20.0%
• March Retail Sales 1.4% (Briefing.com consensus 1.3%); Prior 0.2%, March Retail Sales ex-auto 0.5% (Briefing.com consensus 0.2%); Prior was revised to 0.7% from 0.3%
  • The complicated element -- and key takeaway from the report -- is that the strength has a lot to do ostensibly with getting ahead of the tariff actions, which is to say the strength may not be sustained. If there is a counterargument to that point, it is that sales at food services and drinking places were up a robust 1.8% in March after declining 0.8% in February.
• March Industrial Production -0.3% (Briefing.com consensus -0.3%); Prior was revised to 0.8% from 0.7%, March Capacity Utilization 77.8% (Briefing.com consensus 77.9%); Prior 78.2%
  • The key takeaway from the report is that the large decline in the output of utilities overshadowed the increase in manufacturing output and mining output, so the headline decline isn't as bad as it looks at first blush.
• February Business Inventories 0.2% (Briefing.com consensus 0.3%); Prior 0.3%
• April NAHB Housing Market Index 40 (Briefing.com consensus 39); Prior 39