Stock Market Update

[BRIEFING.COM] Stocks are under relatively broad pressure today as new reports of strikes against tankers and cargo ships in the Strait of Hormuz have resulted in another sharp increase in oil prices. The S&P 500 (-1.1%), Nasdaq Composite (-1.3%), and DJIA (-1.2%) are improving from their session lows amid a modest dip in oil prices that followed comments from Iran's foreign minister that it is not laying mines in the Strait of Hormuz. 

Still, oil has made a renewed push toward $100 per barrel despite yesterday's announcement from the IEA that 400 million barrels of oil will be released from reserves. The market remains eager to see how fast the reserves will be released, which has not been clarified. Currently, oil is up $7.30, or 8.4%, to $94.54 per barrel. 

Similar to yesterday's action, the energy sector (+1.8%) is the top performer as Phillips 66 (PSX 176.92, +7.42, +4.38%), Chevron (CVX 198.23, +6.44, +3.36%), and Marathon Petroleum (MPC 234.02, +7.28, +3.21%) all rise to fresh record highs. 

However, the market is without yesterday's relative strength across the tech space, which weighs on the major averages. The information technology sector (-1.4%) lags today as chipmakers, including NVIDIA (NVDA 184.00, -2.03, -1.09%), come under pressure. The PHLX Semiconductor Index is down 2.6%. 

Other mega-cap names, including Meta Platforms (META 639.95, -14.91, -2.28%) and Tesla (TSLA 400.46, -7.36, -1.80%), are also underperforming, weighing on the consumer discretionary (-1.6%) and communication services (-1.6%) sectors.

Similar to recent sessions, lines such as Carnival (CCL 24.36, -1.61, -6.20%) are among some of the worst performers in the consumer discretionary sector as oil prices rise. 

Higher fuel prices continue to weigh on airline and trucking names as well, which seats the industrials sector (-2.0%) with the widest loss. 

Elsewhere, the financials sector (-1.5%) continues to be weighed down by weakness in its asset manager components. Bloomberg reported that Morgan Stanley (MS 154.18, -6.71, -4.17%) and Cliffwater are capping withdrawals from private credit funds after investors rushed to redeem funds.

The utilities sector (+1.5%) sees some rotational strength amid the weakness in growth stocks, while the consumer staples sector (+0.1%) also holds a narrow gain. Dollar General (DG 137.88, -6.96, -4.81%) lags after issuing cautious guidance despite topping earnings estimates. 

Outside of the S&P 500, the Russell 2000 (-1.5%) and S&P Mid Cap 400 (-1.2%) are also firmly lower, though modestly improved from their worst levels. 

For now, the market’s direction remains closely tied to developments in the energy market, with investors watching whether oil can stabilize after its recent surge. Continued volatility in crude prices is likely to remain a key driver of broader market sentiment in the near term.

Reviewing today's data:

• January Housing Starts 1.487 mln (Briefing.com consensus 1.340 mln); Prior was revised to 1.387 mln from 1.404 mln, January Building Permits 1.376 mln (Briefing.com consensus 1.392 mln); Prior was revised to 1.455 mln from 1.448 mln
  • The key takeaway from the report is that it beat expectations thanks to strong growth in multi-unit starts while single-unit housing starts were down 2.8% month-over-month.
• January Trade Balance -$54.5 bln (Briefing.com consensus -$67.9 bln); Prior was revised to -$72.9 bln from -$70.3 bln
  • The key takeaway from the report is that the monthly trade deficit returned to the $50 billion range, which has been a familiar zone since last year's implementation of tariffs.
• Weekly Initial Claims 213K (Briefing.com consensus 215K); Prior was revised to 214K from 213K, Weekly Continuing Claims 1.850 mln; Prior was revised to 1.871 mln from 1.868 mln
  • The key takeaway from the report is that claims remain just above the 200,000 mark, reflecting a low-firing environment.