Stock Market Update

[BRIEFING.COM] The stock market got on a winning track this morning and it showed little intention of getting off it once it did, largely dismissing an afternoon contention from Elon Musk that the "one big, beautiful bill" is a "disgusting abomination" since it will massively increase the budget deficit. Small-cap stocks, mega-cap stocks, and semiconductor issues led today's gains, which had some grounding in growth optimism and continued backing from momentum buyers.

Today's start was a bit sluggish, with some consolidation interest in the air. The indices gained some traction around 10:00 a.m. ET, however, following an April JOLTS - Job Openings Report that showed a pickup in openings.

That was viewed as a good indication for the labor market, which conveyed some encouraging thoughts about the growth outlook in spite of the OECD downgrading its 2025 global GDP growth forecast to 2.9% from 3.1% and its U.S. GDP growth forecast to 1.6% from 2.2% and China's Caixin Manufacturing PMI for May registering its weakest reading (48.3) since 2022.

Today's best-performing sector was the information technology sector (+1.5%), which was led by NVIDIA (NVDA 141.40, +4.02, +2.9%) and the semiconductor stocks. The energy sector (+1.1%) was next in line, followed by the materials (+1.0%) and industrials (+0.8%) sectors, exposing today's pro-cyclical orientation.

The Russell 2000 (+1.6%), led by its banking and energy components, outpaced the other major indices. Today's buying efforts, though, were broad-based.

Advancers led decliners by a better than 2-to-1 margin at the NYSE and Nasdaq. Like yesterday, today's advance unfolded on below-average trading volume at the NYSE and Nasdaq.

Separately, Treasuries were little changed from Monday's settlement levels but saw some intraday movement. The 10-yr note yield, which dipped below 4.41% in the overnight futures trade, settled unchanged at 4.46%, while the 30-yr bond yield, which slipped to 4.93%, settled at 4.98%, down two basis points. 

• S&P 500: +1.5% YTD
• Nasdaq: +0.5% YTD
• DJIA: -0.05% YTD
• S&P 400: -2.8% YTD
• Russell 2000: -5.7% YTD

Reviewing today's data:

• Factory orders declined 3.7% month-over-month in April (Briefing.com consensus -3.1%) following a downwardly revised 3.4% increase (from 4.3%) in March. Excluding transportation, factory orders declined 0.5% for the second straight month. Shipments of manufactured goods dropped 0.3% on the heels of a 0.2% decline in March.
  • The key takeaway from the report is that April activity was devoid of strength, with declines in durable goods orders, nondurable goods orders, and business spending.
• The April JOLTS - Job Openings Report showed there were 7.391 mln job openings versus an upwardly revised 7.200 mln (from 7.192 mln) in March.