Stock Market Update

[BRIEFING.COM] The stock market had a relatively quiet morning in its first session back from the long holiday weekend, with the S&P 500 (+0.7%), Nasdaq Composite (+1.3%), and DJIA (flat) trading in a range-bound fashion.

A solid rebound across semiconductor names is driving gains in the S&P 500 and Nasdaq Composite as investors rotate back into the key leadership group after a slide in the back half of last week. Headlines are relatively quiet, suggesting the gains are driven by investors buying the recent dip as opposed to a corporate news item or industry-specific catalyst. Advanced Micro Devices (AMD 558.36, +40.54, +7.83%), however, is a standout after Goldman Sachs reiterated its Buy rating on the stock and increased its target price to $640 from $450.

The PHLX Semiconductor Index is up 3.2%, pushing the information technology sector (+1.7%) firmly higher as well.

Mega-cap stocks outside of the semiconductor space are also improving as the session progresses. The Vanguard Mega Cap Growth ETF is now up 1.5%, helping the market-weighted S&P 500 (+0.7%) comfortably outperform the S&P 500 Equal Weighted Index (-0.1%). The communication services (+1.0%) and consumer discretionary (+0.8%) sectors hold solid gains as a result, with Tesla's (TSLA 418.78, +25.33, +6.44%) outsized gain lifting the consumer discretionary sector despite the vast majority of its components trading lower.

The industrials (+0.7%) and financials (+0.5%) sectors also hold decent gains, while six S&P 50 sectors trade lower.

Losses are widest across the defensive consumer staples (-1.4%), utilities (-1.2%), and health care (-1.1%) sectors, as investors rotate back into semiconductors and mega-cap stocks. Constellation Brands (STZ 129.44, -8.03, -5.84%) is a particular laggard, continuing to slide after its latest earnings release.

Outside of the S&P 500, smaller-cap indices are rebounding from a lower showing last week. The Russell 2000 (+0.9%) and S&P Mid Cap 400 (+0.5%) hold solid gains.

So far, investors' willingness to buy into the recent weakness across semiconductor stocks is driving solid gains at the index level, at least for the market-capitalization-weighted S&P 500 and Nasdaq Composite. While there is a bit of rotational action out of more defensive pockets of the market, enthusiasm across mega-cap tech and AI-related stocks has the S&P 500 on pace for its first close above the 7,500 mark since June 18.

Reviewing today's data:

• June S&P Global U.S. Services PMI - Final 51.2; Prior 51.3
• June ISM Non-Manufacturing Index 54.0% (Briefing.com consensus 54.2%); Prior 54.5%
  • The key takeaway from the report is that activity in the services sector is still running at a good pace despite ongoing price pressures. The June reading was 0.9 percentage points above the 12-month average of 53.1%.