Stock Market Update

[BRIEFING.COM] The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite are all higher. The common link between those standings is the standing of Amazon (AMZN 271.03, +35.53, +15.09%), which is a component in all of them and is soaring after a Q2 earnings report that featured the strongest year-over-year growth for AWS (+36.7%) in 18 quarters. 

It would be remiss not to mention that Apple (AAPL 300.45, -32.98, -9.89%) is a component in all of them as well, only it is plunging after issuing disappointing fiscal Q4 revenue guidance that it attributed to supply constraints and negative FX effects.

In brief, Apple is a key reason why the Dow, S&P 500, and Nasdaq Composite are not even higher than they are. Other reasons include a jump in the 10-yr note yield to 4.74% and a 1.2% increase in WTI crude futures to $84.56/bbl. There are some nebulous reasons for those moves, but they have acted as a governor of sorts for a market that is being steered by a concentration in mega-cap stocks as opposed to a saturation of buying interest.

To that end, breadth favors decliners at the NYSE and Nasdaq; the Russell 2000 is down 0.6%; the S&P MidCap 400 is flat; the equal-weighted S&P 500 is down 0.1%; and seven of the 11 S&P 500 sectors are trading lower.

The weakest links are the materials (-2.6%), information technology (-1.1%), and health care (-0.5%) sectors. On the flip side, Amazon is steering a 5.9% increase in the consumer discretionary sector, while Alphabet (GOOG 353.12, +19.44, +5.83%) is spearheading a 3.8% jump in the communication services sector.

Alpahabet, along with NVIDIA (NVDA 198.37, +3.33, +1.71%), Microsoft (MSFT 462.14, +11.04, +2.45%), and Amazon, has effectively offset Apple's drag.

Elsewhere, the semiconductor stocks have been relative strength leaders, riding the coattails of a massive gain in South Korea's Kospi Index (+17.9%) that was led by SK Hynix and Samsung Electronics. The Philadelphia Semiconductor Index is up 1.0%.

The S&P 500, for its part, has traded between 7,400 and 7,490. It currently sits near the upper end of that zone, with fund flows favoring many of its biggest components.

Reviewing today's data:

• The Q2 Employment Cost Index increased 0.9% (Briefing.com consensus: 0.8%) on the heels of a 0.9% increase in Q1, with wages and salaries up 0.9% and benefit costs up 1.0%.
  • The key takeaway from the report is that wages and salaries for civilian workers, up 3.2% year-over-year, are not keeping up with inflation. That could eventually lead to reduced discretionary spending activity.
• The final reading for the University of Michigan Consumer Sentiment Index for July increased to 55.2 (Briefing.com consensus: 54.4) from the preliminary reading of 54.4 and the final reading of 49.5 for June. In the same period a year ago, the index stood at 61.7.
  • The key takeaway from the report is that sentiment held okay in July, even as gas prices started to rise again amid increased military hostilities between the U.S. and Iran.
• July Chicago PMI 57.6 vs. 56.5 Briefing.com consensus; prior 56.7