Stock Market Update

[BRIEFING.COM] The major averages are little changed at midday with the S&P 500 hovering right below its unchanged level after backpedaling from its opening high.

The S&P 500 and Nasdaq (+0.2%) started today's session within a striking distance of their respective record highs from February, but they ran into resistance immediately after the start. The profit taking is not all that surprising, considering the looming end of Q2, which was underscored by a big rally off April lows with the S&P 500 and Nasdaq up a respective 26.0% and 35.0% over the past 11 weeks.

Three sectors trade in the green at midday, led by technology (+0.9%) after the top-weighted group gained nearly 21.0% since the end of Q1. Chipmakers have fared even better with the PHLX Semiconductor Index (+0.5%) up 28.0% for the quarter, though the industry group is trailing the broader sector today ahead of Micron's (MU 126.45, -1.46, -1.14%) quarterly results that will be released after the close.

Like the broader market, chip giant NVIDIA (NVDA 152.72, +4.82, +3.26%) also approached its record high, but unlike the broader market, NVIDIA has been able to sustain its early gain with help from a price target hike to $250 from $175 at Loop Capital.

The energy sector (+0.3%) has turned positive in recent trade after two days of notable underperformance following the ceasefire agreement between Israel and Iran. Today's advance has been assisted by a rebound in the price of oil, which is up 2.3% at $65.82/bbl, extending its gain after the release of a bullish inventory report from the EIA.

Besides the increase in the price of oil, the energy sector has benefited from a Wall Street Journal report that Shell (SHEL 69.52, -0.62, -0.88%) is in discussions to acquire BP (BP 30.41, +0.58, +1.93%).

Eight sectors hold midday losses with consumer staples (-1.1%) among the laggards after General Mills (GIS 51.23, -2.18, -4.09%) beat Q4 EPS expectations and increased its dividend by 2%, but also issued a cautious outlook for FY26.

In other earnings of note, FedEx (FDX 224.92, -4.58, -2.00%) also trades lower as concerns about the lack of specific EPS guidance overshadow a Q4 beat. TD Cowen lowered its target for the stock to $269 from $310 after the Q4 report.

Treasuries are back near their starting levels after spending the past couple hours in a steady rise off their lows with the 10-yr yield remaining up two basis points at 4.31%.

Reviewing today's economic data:

• New home sales declined 13.7% month-over-month in May to a seasonally adjusted annual rate of 623,000 units (Briefing.com consensus 700,000) from a downwardly revised 722,000 (from 743,000) in April. That was the weakest pace of sales since October 2024. On a year-over-year basis, new home sales were down 6.3%.
  • The key takeaway from the report is that there is an ample supply of new homes for sale, yet overall sales were weak in May, with high prices and high mortgage rates crimping demand.
• The weekly MBA Mortgage Index rose 1.1% to follow last week's 2.6% decrease. The Refinance Index rose 3.0% while the Purchase Index was down 0.4%.