Stock Market Update

[BRIEFING.COM] The stock market is seeing a continuation of recent strength in mega-cap and tech names that pushes the S&P 500 (+0.4%) and Nasdaq Composite (+0.9%) higher, though the S&P 500 has run into resistance just below its all-time high of 7,002.28. Meanwhile, weakness in the broader market keeps the DJIA (-0.4%) in negative territory, while the small-cap Russell 2000 (flat) and S&P Mid Cap 400 (-0.3%) lag modestly.

Mega-cap stocks are doing the heavy lifting again today, with the Vanguard Mega Cap Growth ETF (+1.3%) extending its week-to-date gain to 4.9%. The consumer discretionary sector (+1.1%) now holds the widest gain, boosted by a rally in Tesla (TSLA 387.73, +23.53, +6.46%).

The information technology sector (+1.0%) holds a similar gain, with software names resuming their recent rebound effort after a more subdued showing yesterday. Microsoft (MSFT 408.69, +15.58, +3.96%) is another mega-cap standout while Datadog (DDOG 119.20, +8.63, +7.81%) and ServiceNow (NOW 93.52, +5.73, +6.53%) hold even wider gains, pushing the iShares GS Software ETF 3.3% higher.

Meanwhile, the PHLX Semiconductor Index is down 1.5%. Though not a component of the S&P 500, European semiconductor giant ASML (ASML 1418.82, -99.48, -6.55%) topped earnings estimates but lowered its Q2 guidance, which weighs on related stocks such as KLA Corporation (KLAC 1681.60, -114.31, -6.37%) and Lam Research (LRCX 255.49, -16.92, -6.21%).

However, Broadcom (AVGO 389.13, +8.35, +2.19%) trades higher after announcing an expanded partnership with Meta Platforms (META 673.10, +10.60, +1.60%) to support the company's rapidly scaling artificial intelligence compute infrastructure, with Meta's gain contributing to strength in the communication services sector (+0.7%).

The financials sector (+0.8%) also holds a solid gain, supported by strength in Morgan Stanley (MS 191.03, +7.69, +4.19%) after topping earnings estimates, while asset managers such as Ares Management (ARES 119.49, +6.88, +6.11%) continue to rebound from recent lows. Robinhood Markets (HOOD 85.15, +6.06, +7.66%) is the best-performing S&P 500 name today after the SEC approved a proposal from FINRA to eliminate the current day trading margin requirements.

As for today's laggards, the industrials sector (-1.8%) holds the widest loss as machinery bellwethers such as Caterpillar (CAT 758.86, -35.39, -4.46%) and Lennox Int'l (LII 474.88, -45.54, -8.75%) are notably weaker today. The downturn coincides with a push higher in interest rates following comments from Cleveland Fed President Beth Hammack, who stated that rates are in a "good place" and that her base case is for them to remain on hold for "some time."

Elsewhere, the materials sector (-1.6%) sees a continuation of recent weakness, while the defensive health care (-1.0%), utilities (-0.8%), and consumer staples (-0.3%) sectors lag as the market favors more growth-oriented holdings today.

On the geopolitical front, reports continue to indicate that the U.S. and Iran are progressing with negotiations, with Bloomberg reporting that the U.S. and Iran are considering extending their ceasefire by two weeks. Oil prices have stayed relatively calm today, and crude oil is hovering around the $92 per barrel mark.

The S&P 500 briefly came within 0.5 points of its all-time high earlier in the session before easing off modestly, though it remains well within striking distance, supported by recent strength across the market's largest components and a more favorable geopolitical backdrop.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 1.8%; Prior -0.8%
• April Empire State Manufacturing 11.0 (Briefing.com consensus 0.0); Prior -0.2 March Import Prices 0.8%; Prior was revised to 0.9% from 1.3%
• March Import Prices ex-oil 0.6%; Prior was revised to 0.8% from 1.1%
• March Export Prices 1.6%; Prior was revised to 1.9% from 1.5% March Export Prices ex-ag. 1.7%; Prior was revised to 2.1% from 1.7%
• April NAHB Housing Market Index 34 (Briefing.com consensus 38); Prior 38