Stock Market Update

[BRIEFING.COM] The stock market faces broad pressure today, with the S&P 500 (-0.8%), Nasdaq Composite (-1.0%), and DJIA (-1.0%) lower across the board. The Russell 2000 (-1.8%) and S&P Mid Cap 400 (-1.2%) face wider retreats as the market displays a clear risk-off positioning today. 

The market had an eventful morning before the opening bell. Notably, President Trump confirmed that former Fed Governor Kevin Warsh will be his nomination for the Fed Chair role. There was nothing to indicate that the market disapproves of the selection, but it had no material effect on the market's implied expectations for policy easing, which remains several months away. 

Additionally, the December PPI (0.5%; Briefing.com consensus: 0.2%) and Core PPI (0.6%; Briefing.com consensus: 0.3%) readings both came in hotter than expected, keeping year-over-year changes elevated (3.0% for PPI, 3.2% for Core PPI). 

The market also continues to face some pressure on the earnings front from its largest components. 

Apple (AAPL 254.93, -3.35, -1.30%) delivered an impressive earnings report, though it moved lower amid concerns about supply constraints.  Microsoft (MSFT 432.08, -1.42, -0.33%) has also failed to garner any "buy the dip" interest after shedding nearly 10% yesterday.

The information technology sector (-1.1%) faces a considerable retreat, with a 2.4% slide in the PHLX Semiconductor Index adding to the weakness.

Sandisk (SNDK 597.30, +58.00, +10.75%) is a rare bright spot, trading sharply higher after topping estimates and issuing impressive guidance.

Tesla (TSLA 438.94, +22.38, +5.37%) is another notable mover, regaining yesterday's retreat and then some following a Bloomberg report that Elon Musk's SpaceX is considering a merger with the EV giant or xAI as an alternative to a traditional IPO.

The consumer discretionary sector (+0.2%) holds a slight gain as a result. Only the defensive health care (+0.1%) and consumer staples (+0.1%) sectors also hold slight gains. 

Meanwhile, losses across the eight S&P 500 sectors in negative territory have generally widened throughout the session. Seven of those sectors now hold losses of 0.7% or wider.

The materials sector (-2.2%) faces the widest loss as gold and silver prices plummet today. 

Elsewhere, earnings continue to be the main driver of price action at the individual level. Dow components American Express (AXP 345.96, -12.54, -3.50%) and Visa (V 324.11, -7.69, -2.32%) put pressure on the financials sector (-0.6%), while Verizon (VZ 43.48, +3.68, +9.23%) prevents further losses in the communication services sector (-0.3%). 

So far, broad-based selling has the major averages on the retreat in the final session of the month. The major averages currently hold gains of roughly 1.0% month-to-date heading into the afternoon trade. 

Reviewing today's data:

• December PPI 0.5% (Briefing.com consensus 0.2%); Prior 0.2%, December Core PPI 0.6% (Briefing.com consensus 0.3%); Prior 0.0%
  • The key takeaway from the report is the lingering 3-handle on the year-over-year changes, which will keep alive concerns about pass-through (to the consumer) and possible margin compression (for wholesalers and retailers) if they don't pass through their higher costs.
• January Chicago PMI 54.0 (Briefing.com consensus 43.0); Prior was revised to 42.7 from 43.5