Stock Market Update

[BRIEFING.COM] A sharp intraday reversal across tech and mega-cap stocks wiped out a solid start to the session, with the S&P 500 (-1.5%), Nasdaq Composite (-2.8%), and DJIA (-0.8%) now firmly lower just after midday.

The information technology sector (-4.4%) is pacing the losses, extending its month-to-date decline in June to 8%. The sector traded 1% higher this morning as semiconductors opened to an extension of yesterday's rebound but has steadily charted a lower course after reaching its best levels within the first hour of the session.

The PHLX Semiconductor Index (-6.6%) was up nearly 2% before whipsawing sharply lower. Losses are broad across the group and include large chipmakers such as Intel (INTC 102.16, -8.10, -7.35%) and NVIDIA (NVDA 202.78, -5.86, -2.81%), memory names such as Micron (MU 885.66, -63.62, -6.70%), and infrastructure names such as Corning (GLW 169.09, -18.45, -9.84%).

Elsewhere in the technology sector, Apple (AAPL 290.10, -11.44, -3.79%) continues to lag after underwhelming investors with its AI Siri and other updates yesterday at WWDC.

Tesla (TSLA 390.13, -18.82, -4.60%) and Alphabet (GOOG 358.38, -2.79, -0.77%) are among the other mega-cap laggards, weighing on the consumer discretionary (-1.0%) and communication services (-0.5%) sectors after solid early gains.

The Vanguard Mega Cap Growth ETF is down 2.5%. Unsurprisingly, the S&P 500 Equal Weighted Index (-0.7%) is outperforming the market-weighted S&P 500 (-1.5%) by a considerable margin.

Despite the pressure in tech, many rate-sensitive and oil-sensitive pockets of the market continue to outperform amid the retreat in oil prices today. The iShares U.S. Home Construction ETF is up 2.6%.

Additionally, there has been strong rotational interest in defensive sectors throughout the session, with the consumer staples (+1.5%), utilities (+1.2%), and health care (+0.9%) sectors all outperforming after a sluggish start. J.M. Smucker (SJM 112.76, +10.99, +10.80%)is the best-performing S&P 500 name after topping earnings estimates and issuing upside EPS guidance.

Meanwhile, the real estate sector (+2.1%) posts the widest gain, building on its Q2 strength as investors continue to rotate into lower-volatility, income-oriented areas of the market.

With the CBOE Volatility Index up 20.6% to 22.81, volatility has surged sharply intraday, reflecting the abrupt shift from early-session optimism to broad-based risk-off positioning, particularly within high-beta growth and technology stocks.

Reviewing today's data:

• May NFIB Small Business Optimism 95.3; Prior 95.9
• April Trade Balance -$55.9 bln (Briefing.com consensus -$55.5 bln); Prior was revised to -$56.6 bln from -$60.3 bln
  • The key takeaway from the report is that the export strength was concentrated in crude oil exports (+$6.4 billion), fuel oil exports (+$1.3 billion), and other petroleum products (+$1.0 billion), which were boosted by the supply disruptions tied to the difficulties traversing the Strait of Hormuz.
• May Existing Home Sales 4.17 mln (Briefing.com consensus 4.07 mln); Prior was revised to 4.04 mln from 4.02 mln
  • The key takeaway from the report is that existing home sales hit their highest level since December, bolstered by lower mortgage rates (versus the year-ago period) and income gains outpacing home price growth, which led to improving affordability conditions across all regions.
• April Wholesale Inventories 0.6% (Briefing.com consensus 0.5%); Prior 1.3%