Stock Market Update

[BRIEFING.COM] The S&P 500 trades higher by 1.5%.

Last week was quiet on the economic front, but the market already received a couple noteworthy reports this morning.

Total durable goods orders decreased 6.3% month-over-month in April (Briefing.com consensus -8.1%) following a downwardly revised 7.6% increase (from 9.2%) in March, with a 17.1% decline in transportation equipment orders acting as the key drag. Excluding transportation, durable goods orders rose 0.2% month-over-month (Briefing.com consensus 0.0%) following a downwardly revised 0.2% decline (from 0.0%) in March.

The key takeaway from the report is that there was a big dropoff in business spending, evidenced by the 1.3% decline in new orders for nondefense capital goods excluding aircraft.

Separately, the Conference Board's Consumer Confidence Index jumped to 98.0 in May (Briefing.com consensus 87.0) from a downwardly revised 85.7 (from 86.0) in June, breaking a string of five consecutive months of decline.

The key takeaway from the report is that there was a clear connection between the increase in consumer confidence and the pause in the reciprocal tariff rates, which triggered a material rally in stock prices and improved forecasts for the economic outlook. Note: roughly half of the responses came after the May 12 news that the U.S. and China were pausing their respective reciprocal tariff rates.

Longer-dated Treasuries continue holding the bulk of their early gains with the 10-yr yield down five basis points at 4.46% while the 2-yr yield is down two basis points at 3.98%.