Stock Market Update

[BRIEFING.COM] Stocks are looking to end a record-setting week on a higher note, as solid leadership from semiconductor and mega-cap names pushes the S&P 500 (+0.8%) and Nasdaq Composite (+1.5%) to new record highs. Meanwhile, the DJIA is flat amid mixed strength in the broader market.

The top-weighted information technology sector (+2.2%) is sharply higher, supported by a rebound across semiconductor names after yesterday's weakness. Micron (MU 732.08, +85.46, +13.22%) and Advanced Micro Devices (AMD 442.20, +33.74, +8.26%) both set all-time highs and are just two of many stocks in the PHLX Semiconductor Index (+4.1%) that trade higher.

Software stocks are facing some pressure after yesterday's rally, though Akamai Tech (AKAM 139.39, +22.70, +19.45%) is one of the best-performing S&P 500 components after earnings, and the iShares GS Software ETF (-0.5%) has significantly narrowed its loss for the day.

The consumer discretionary sector (+0.8%) is another outperformer, supported by an extension of recent strength in TSLA. The Vanguard Mega Cap Growth ETF is up 1.1%, and the market-weighted S&P 500 (+0.8%) outperforms the S&P 500 Equal Weighted Index (+0.3%).

Outside of the mega-cap space, the consumer staples sector (+0.7%) is supported by Monster Beverage's (MNST 87.16, +11.20, +14.74%) impressive post-earnings rally, while the materials (+0.7%) and real estate (+0.6%) sectors hold similar gains. Losses are generally modest across the remaining six S&P 500 sectors, though the health care sector (-0.9%) is a laggard.

Crude oil is currently $1.14 (+1.2%) higher at $95.95 per barrel as the U.S. awaits Iran's response to the latest peace proposal.

Overall, today's action reflects continued enthusiasm around AI-driven leadership and semiconductor strength, with investors largely looking past geopolitical uncertainty as the major indices continue to press deeper into record territory.

Reviewing today's data:

• The April Employment Situation Report featured a 115,000 increase in nonfarm payrolls, a 4.3% unemployment rate, and a bump in the average workweek to 34.3 hours (from 34.2). This was not an indisputably strong employment report, however. Average hourly earnings growth was weaker than expected, the labor force participation rate dipped, and the U-6 unemployment rate, which accounts for unemployed and underemployed workers, increased.
  
  • The key takeaway from the report, though, may just be found in a number that looks good on the surface but could be a harbinger of lower spending activity if inflation pressures aren't controlled. We're talking about the 3.6% year-over-year increase in average hourly earnings, which leaves real earnings up just 0.3% when pitted against the March CPI report or up just 0.1% when measured against the latest PCE Price Index. That doesn't provide a lot of discretionary spending cushion without taking on debt or dipping into savings.
• The preliminary reading for the University of Michigan Consumer Sentiment Index for May dropped to 48.2 (Briefing.com consensus: 50.5) from the final reading of 49.8 for April. In the same period a year ago, the index stood at 52.2.
  
  • The key takeaway from the report is that consumers are clearly concerned about rising costs and their ability to out-earn the inflation.
• Wholesale inventories increased 1.3% in March (Briefing.com consensus 1.4%), from the revised previous increase of 0.9% (from 0.8%).