Stock Market Update

[BRIEFING.COM] Stocks are facing a considerable pullback today, with the S&P 500 (-1.0%), Nasdaq Composite (-1.0%), and DJIA (-1.5%) all more than 1% lower. Participation is weak in the broader market, and renewed fears of AI disruption continue to wreak havoc on software names, bleeding into other parts of the market. 

The financial sector (-3.4%) is the worst-performing S&P 500 sector, facing pressure on multiple fronts. 

Asset managers such as KKR (KKR 92.88, -8.30, -8.20%) and Blackstone (BX 112.62, -8.65, -7.13%) are under renewed pressure after an initial move lower last week that followed a Financial Times report that Blue Owl Capital (OWL 10.28, -0.54, -4.95%) is restricting redemptions. For PE firms with meaningful general partner stakes in portfolio companies tied to traditional enterprise software, uncertainty around future earnings and exit prospects is weighing on sentiment.

Elsewhere in the sector, stocks across the payment landscape such as American Express (AXP 319.96, -26.22, -7.57%) and Visa (V 310.79, -10.16, -3.17%) slide on concerns that AI disruption could slow high-income spending. 

Though software names recouped a chunk of recent weakness in last week's trade, the group faces heightened pressure today, sending the iShares GS Software ETF 5.0% lower. 

CrowdStrike (CRWD 348.69, -39.91, -10.27%) and Datadog (DDOG 104.05, -11.61, -10.04%) are among the worst-performing stocks, both in the information technology sector (-0.9%) and the S&P 500 as a whole. 

Meanwhile, the consumer discretionary sector (-2.9%) also faces a sharp retreat today. Lingering uncertainty around tariffs after President Trump announced he will increase the global Section 122 tariffs to 15% pressures some names, while travel-related and casino stocks are under pressure following nice gains last week. 

Additionally, Tesla (TSLA 395.44, -16.38, -3.98%) and Amazon (AMZN 204.12, -6.00, -2.85%) are both "magnificent seven" laggards amid a tough day for mega-caps that has the Vanguard Mega Cap Growth ETF down 1.2%

There is some rotational interest into more defensive sectors today as growth stocks lag. The consumer staples sector (+1.1%) holds the widest gain, with Walmart (WMT 125.72, +2.73, +2.22%) rebounding nicely from some post-earnings weakness. 

The health care sector (+0.9%) holds a similar gain, as Eli Lilly (LLY 1055.18, +45.66, +4.52%) is boosted by underwhelming results from competitor Novo Nordisk A/S (NVO 40.04, -7.38, -15.57%) latest weight-loss drug trial. 

Outside of the S&P 500, the Russell 2000 (-2.3%) and S&P Mid Cap 400 (-2.2%) are both firmly lower as the broader market faces pronounced weakness today. 

The CBOE Volatility Index is up 12.9% to 21.6, reflecting a heightened sense of uncertainty across equities. Stocks weathered some tariff-related volatility on Friday to finish the week with solid gains, though a resurgence in weakness across software and mega-cap names coupled with broad weakness proves to be too much for the major averages, sending the S&P 500 below its 50-day moving average (6,895.83).

Reviewing today's data:

• December Factory Orders -0.7% (Briefing.com consensus 0.9%); Prior 2.7%
  
  • The key takeaway from the report is that the weakness was concentrated in the transportation industry; otherwise, it was a decent month of order activity for durable goods.