Stock Market Update

[BRIEFING.COM] The S&P 500 (-0.2%), Nasdaq Composite (-0.4%), and DJIA (+1.0%) sit mostly lower just after midday as tech stocks face some profit-taking following yesterday's sharp rally. It has been a relatively quiet session from a news flow perspective, though oil prices continue to move lower, prompting gains across the broader market that have the DJIA pushing deeper into record territory.

While details surrounding the U.S.-Iran peace agreement that sent oil sharply lower yesterday remain limited, The Wall Street Journal reported that the U.S. plans to incentivize Iran's participation by allowing the country to immediately resume oil exports once the agreement is signed. Crude oil is currently down $5.08 (-6.3%) to $75.67 per barrel. The energy sector (-0.5%) is unsurprisingly a laggard, though the retreat in oil prices remains a tailwind for the broader market.

Nine S&P 500 sectors trade higher, with other cyclical sectors among the top performers. The financials sector (+1.6%) holds the widest gain as investors increasingly bet that energy prices are heading back toward levels seen before the military campaign against Iran, easing concerns about economic growth and providing a more favorable backdrop for bank profitability. JPMorgan Chase (JPM 330.99, +11.59, +3.63%) is the best performing Dow component after L3Harris (LHX 309.16, +4.98, +1.64%) tapped the bank, along with Morgan Stanley (MS 220.99, +3.01, +1.38%), to lead up to a $2 billion IPO of its missile unit Axyv, according to Bloomberg.

The industrials sector (+1.3%) is another top mover, supported by broad strength, while construction material names outperform amid another drop in Treasury yields, sending the materials sector (+0.8%) higher.

Despite the strength in the broader market, the top-weighted information technology sector (-1.5%) moves firmly lower, capping gains at the index level. The PHLX Semiconductor Index (-3.3%) is facing some profit-taking after yesterday's advance, with Lumentum (LITE 891.96, -65.28, -6.82%) the worst-performing S&P 500 component today, while Intel (INTC 120.06, -7.80, -6.10%) is a large chipmaker laggard.

Relative weakness across mega-cap tech names has the Vanguard Mega Cap Growth ETF down 0.8%. The pullback across the market's largest names has not yet affected SpaceX (SPCX 216.58, +24.08, +12.51%), which moves sharply higher on its third trading day.

Even with today's weakness, the technology sector advanced 3.4% yesterday, which keeps it firmly higher on a week-to-date basis. Oil-driven enthusiasm in the broader market has the S&P 500 Equal Weighted Index (+0.2%) sitting with a modest gain for the day, keeping the broader tone constructive as the major averages remain firmly higher for the week.

Reviewing today's data:

• May Housing Starts 1.177 mln (Briefing.com consensus 1.440 mln); Prior was revised to 1.392 mln from 1.465 mln, May Building Permits 1.413 mln (Briefing.com consensus 1.410 mln); Prior was revised to 1.423 mln from 1.442 mln
  • The key takeaway from the report is that the weakness in starts was concentrated on the multi-unit side, as starts there were down 40.2% month-over-month, yet it would be remiss not to mention that single-unit starts in the South—the largest homebuilding region—were down 5.2% month-over-month.
• May Import Prices 1.9%; Prior was revised to 2.0% from 1.9%
• May Import Prices ex-oil 0.8%; Prior was revised to 0.6% from 0.8%
• May Export Prices 1.3%; Prior was revised to 3.5% from 3.3%
• May Export Prices ex-ag. 1.2%; Prior was revised to 3.7% from 3.4%