Stock Market Update

[BRIEFING.COM] The major averages are on track to end May on a lower note with the S&P 500 and Nasdaq down a respective 1.1% and 1.7% at midday while the Dow (-0.6%) outperforms.

The first half of the final session of May has been sloppy with the market ranging near yesterday's lows before giving in to additional selling pressure in recent trade. There was some early pressure on sentiment after President Trump said that China has violated the preliminary trade agreement, which invited speculation about the potential for more restrictions on trade with China. On a somewhat related note, The Wall Street Journal reported that the Trump administration is preparing to impose stopgap tariffs of up to 15% for 150 days after the Court of International Trade blocked the broader tariff effort.

Nine sectors display midday losses, giving in to some profit taking after a big month that saw the Nasdaq jump 8.1% while the S&P 500 has gained 5.1% since the end of April.

Top-weighted technology (-1.9%) has lagged from the start, but it is still up 9.1% for the month. NVIDIA (NVDA 133.52, -6.67, -4.1%) is among today's worst performers as it continues its reversal from yesterday's post-earnings high, contributing to relative weakness in the PHLX Semiconductor Index (-3.8%).

Software stocks, however, are a pocket of some relative strength with Palantir (PLTR 124.83, +2.51, +2.1%) returning to record territory and the iShares Expanded Tech-Software Sector ETF (IGV 101.92, -0.43, -0.4%) hovers near yesterday's low after giving up an earlier gain.

On the earnings front, Dell (DELL 109.55, -4.08, -3.6%) is back at its 200-day moving average (111.10) after a failed morning push to its best level since late February, which followed the release of below-consensus Q1 EPS, combined with above-consensus guidance for Q2 and above-consensus EPS guidance for FY26.

Elsewhere, Costco (COST 1045.23, +36.49, +3.6%) has helped keep the consumer staples sector (+1.0%) atop today's leaderboard after the company beat Q3 EPS expectations.

Treasuries hold modest gains with the 10-yr yield down three basis points at 4.40% today, but still up 22 basis points since the end of April.

Reviewing today's economic data:

• Personal income increased a robust 0.8% month-over-month in April (Briefing.com consensus 0.3%) following an upwardly revised 0.7% increase (from 0.5%) in March. Personal spending rose 0.2% month-over-month, as expected, following an unrevised 0.7% increase in March. The PCE Price Index was up 0.1% month-over-month, as expected, which left it up a palatable 2.1% year-over-year versus 2.3% in March. The core-PCE Price Index was also up 0.1%, as expected, leaving it up 2.5% year-over-year versus 2.7% in March.
  • The key takeaway from the report is manifold: inflation rates are moderating, personal income growth is strong, and the personal savings rate picked up to 4.9% from 4.3% in March, which points to pent-up spending potential that will keep the economy on a growth track in the second quarter.
• The final University of Michigan Index of Consumer Sentiment for May increased to 52.2 (Briefing.com consensus 50.8) from the preliminary reading of 50.8. The final reading for April was also 52.2. In the same period a year ago, the index stood at 69.1.
  • The key takeaway from the report is that it ends four consecutive months of plunging declines in sentiment, although consumers still have concerns about their current personal finances and the future, with inflation expectations weighing.
• The Chicago PMI hit 40.5 in May (Briefing.com consensus 45.0) down from 44.6 in April.
• The advance goods trade deficit narrowed to $87.6 bln in April from a deficit of $162.3 bln in March.
• Advance Retail Inventories decreased by 0.1% in April after decreasing by 0.3% in March.
• Advance Wholesale Inventories were unchanged in April after increasing 0.3% in March.