Stock Market Update

[BRIEFING.COM] Equities are under continued pressure following yesterday’s sell-off, with all three major averages now slipping below their 50-day moving averages. The S&P 500 (-0.7%), Nasdaq Composite (-0.9%), and DJIA (-0.9%) are trading in a relatively tight range, while the Russell 2000 (-0.2%) and S&P Mid Cap 400 (-0.4%) hold more modest losses. 

The weakness is broad as investors reassess the outlook for monetary policy in the wake of yesterday's FOMC meeting, which significantly pushed back the market's expectations for its next rate cut. The CME FedWatch tool indicates that a 25-basis-point rate cut to 3.25-3.50% is not priced in with greater than 50% probability until the September 2027 meeting.

The shift in the macro outlook has been exacerbated by rising oil prices, which are on the move again today after oil closed modestly lower yesterday. Crude oil is currently up $1.74 (+1.8%) to $97.20 per barrel. The Wall Street Journal reported that Iranian missiles caused extensive damage at a key hub for liquefied natural gas in Qatar.

Similar to recent sessions, the energy sector (+1.5%) is a standout, though the rise in oil prices and downbeat macro outlook are keeping the other ten S&P 500 sectors below their baselines. 

The materials sector (-2.2%) faces the widest loss, with Newmont Corporation (NEM 97.26, -9.28, -8.72%) and Freeport-McMoRan (FCX 52.69, -2.76, -4.98%) among the worst-performing S&P 500 names today as precious metal prices retreat sharply. Gold is down about 6.5% while silver is down roughly 10%. 

Micron (MU 444.80, -16.93, -3.67%) is another underperformer today, seeing choppy price action following its earnings report. The company delivered a stellar beat-and-raise report, though it was priced for perfection after a massive rally to start the year. The information technology sector (-0.5%) is actually one of the better-performing sectors today, with mixed strength across its components. 

The same cannot be said for the consumer discretionary sector (-1.3%), which faces more broad pressure and weak leadership from Tesla (TSLA 381.97, -10.81, -2.75%). 

Elsewhere, the industrials sector (-1.4%) also lags as aerospace and defense names continue to face some "sell-the-news" pressure after the war in Iran initially sent the group higher. The iShares DJ Aerospace ETF is down 2.1%. 

So far, stocks have seen a continuation in recent pressures tied to developments on the macro and energy fronts. While the major averages have traded within a relatively tight range, the lack of meaningful buying interest suggests investors remain cautious as expectations shift away from rate cuts this year after entering 2026 anticipating multiple.

Reviewing today's data:

• Weekly Initial Claims 205K (Briefing.com consensus 215K); Prior 213K, Weekly Continuing Claims 1.857 mln; Prior was revised to 1.847 mln from 1.850 mln
  • The key takeaway from the report is that the low level of initial jobless claims will keep the Fed preoccupied for now with the inflation side of its mandate, which is to say it won't be inclined to cut rates.
• March Philadelphia Fed Index 18.1 (Briefing.com consensus 4.7); Prior 16.3
• January New Home Sales 587K (Briefing.com consensus 719K); Prior was revised to 712K from 745K
  • The key takeaway from the report is that sharp declines were registered in all regions, despite declines in both median and average selling prices, which suggests some demand attrition in the face of elevated mortgage rates and perhaps burgeoning concerns about job security.
• January Wholesale Inventories -0.5% (Briefing.com consensus 0.2%); Prior was revised to -0.1% from 0.2%
• January Leading Economic Index -0.1%; Prior -0.2%