Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.7%) and NASDAQ Composite (+0.9%) cruise to fresh record highs after building on their opening gains.

Positive economic data releases have been a key driver of this morning's strong performance, most recently the ISM Services PMI hit 50.8% in June (Briefing.com consensus 50.3%) from 49.9% in May. The dividing line between expansion and contraction is 50.0%, so the June reading reflects services sector activity returning to an expansion mode.

The key takeaway from the report is that services sector activity returned to growth mode, albeit a growth mode that is still modest at best, while the prices index dipped slightly from May. This is not a report exuding a lot of strength for the largest economic sector, but the direction of travel between May and June (up in activity and down in prices) marks a step in the right direction.

Factory orders surged 8.2% month-over-month in May (Briefing.com consensus 7.9%) following a downwardly revised 3.9% decline (from -3.7%) in April. Excluding transportation, factory orders increased a more modest 0.2%, following a 0.6% decline in April. Shipments of manufactured goods increased 0.1% on the heels of a 0.3% decline in April.

The key takeaway from the report is that business spending picked up markedly in May, reflecting the improved activity that followed the pause on reciprocal tariffs announced in April and the subsequent de-escalation in the U.S.-China tariff measures.

The technology sector (+1.3%) is today's best performer, receiving an added boost from a Bloomberg report that the U.S. pulled back restrictions on sales of chip design software to China. Currently, the PHLX Semiconductor Index is up 0.9%.