Stock Market Update

[BRIEFING.COM] Stocks are attempting a rebound following two consecutive weaker sessions, with investors buying the recent dip across semiconductor stocks while the broader market continues to tilt mostly higher. The S&P 500 (+0.2%), Nasdaq Composite (+0.4%), and DJIA (+0.6%) currently sit closer to their session lows than their session highs, while the Russell 2000 (+1.4%) and S&P Mid Cap 400 (+1.0%) outperform.

The PHLX Semiconductor Index is currently up 3.1%, which moves it back into positive territory for the week. Notably, the index has traded in a relatively stable range so far, unlike the prior sessions which featured considerable intraday retreats. KLA Corporation (KLAC 2304.98, +169.34, +7.93%) and Lam Research (LRCX 345.60, +23.80, +7.39%) lead the advance, while Intel (INTC 111.49, +4.45, +4.16%) also trades higher after Bank of America Securities upgraded the stock to Buy from Underperform.

The bounce across semiconductor names results in a solid gain for the information technology sector (+0.4%), though it has experienced some choppy action so far. Oracle (ORCL 176.30, -24.96, -12.40%) leads software names lower after beating earnings expectations but issuing muted guidance, while action across mega-cap stocks remains bumpy.

Microsoft (MSFT 385.98, -11.38, -2.86%) is caught in the crossfire of both developments, but even NVIDIA (NVDA 200.38, -0.04, -0.02%) has spent time in negative territory despite the broad chipmaker strength.

Analyst commentary continues to suggest that investors may be pulling funds from some of the market leaders to reallocate capital ahead of SpaceX's IPO tomorrow. The Vanguard Mega Cap Growth ETF is down 0.3%.

To that end, Alphabet (GOOG 344.42, -8.90, -2.52%) is another "magnificent seven" laggard, keeping the communication services sector (-1.9%) pinned firmly lower despite EchoStar (b125.47, +10.23, +8.88%) leading all S&P 500 names as the SpaceX IPO adds enthusiasm to space and rocket stocks.

The real estate (-0.5%) and financials (-0.2%) sectors also move lower, but that is the extent of today's weakness at the sector level.

Meanwhile, the industrials sector (+1.5%) holds the widest gain as electrical product names such as Generac (GNRC 251.23, +12.12, +5.07%) and trucking names such as FedEx Freight (FDXF 180.74, +5.39, +3.07%) both rebound from weaker showings across the groups yesterday.

On the geopolitical front, the market's reaction remains relatively muted. While Washington continues to signal that additional military action against Iran remains possible, oil prices are just modestly higher today.

Reviewing today's data:

• May PPI 1.1% (Briefing.com consensus 0.7%); Prior was revised to 1.1% from 1.4%, May Core PPI 0.4% (Briefing.com consensus 0.4%); Prior was revised to 0.7% from 1.0%
  • The key takeaway from the report is that producers aren't finding much price relief; hence, consumers won't find much price relief in the near-term either, unless producers choose to absorb the higher costs.
• Weekly Initial Claims 229K (Briefing.com consensus 222K); Prior was revised to 225K from 215K, Weekly Continuing Claims 1.795 mln; Prior was revised to 1.771 mln from 1.786 mln
  • Jobless claims were higher in the latest week, but the key takeaway remains that they are not at levels that would connote a material degradation of the labor market.