Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.7%), Nasdaq Composite (+1.0%), and DJIA (+0.3%) are higher across the board today, supported by continued strength across semiconductor stocks and a retreat in oil prices following yesterday's surge.

The top-weighted information technology sector (+1.6%) leads the advance, with a 4.4% gain in the PHLX Semiconductor Index helping offset weakness among the sector's "Magnificent Seven" components. Nikkei reported that Applied Materials (AMAT 608.23, +37.73, +6.61%) CEO Gary Dickerson said chipmakers are preparing for years of expansion, adding enthusiasm to the group as investors continue buying yesterday's dip.

The strongest pockets of today's rally are memory names such as Micron (MU 1014.45, +65.65, +6.92%) and Sandisk (SNDK 1879.67, +152.49, +8.83%), semiconductor equipment names such as Lam Research (LRCX 356.77, +23.62, +7.09%), and AI compute/networking names such as Advanced Micro Devices (AMD 551.70, +34.30, +6.63%), suggesting investors are rotating back into the highest-conviction AI beneficiaries rather than defensive areas.

Performance is mixed outside of the technology sector, with six S&P 500 sectors trading higher. Several cyclical sectors are rebounding from a weaker showing in the previous session as oil prices, and in turn Treasury yields, retreat from yesterday's highs. WTI crude oil is currently down $1.48 (-2.0%) to $72.04 per barrel despite the U.S. and Iran exchanging fire again today.

The consumer discretionary sector (+0.4%) is supported by gains in cruise operators such as Norwegian Cruise Line (NCLH 19.88, +1.41, +7.63%), while trucking companies, including FedEx Freight (FDXF 153.27, +9.97, +6.96%), along with airlines, are lifting the industrials sector (+0.8%).

The financials sector (+1.2%) is another standout, reflecting a more supportive backdrop today along with some buy-the-dip interest after yesterday's particularly weak showing.

Similarly, the Russell 2000 (+1.2%) and S&P Mid Cap 400 (+1.8%) are outperforming.

Unsurprisingly, the energy sector (-1.3%) is a laggard amid the pullback in oil prices, while more defensive-oriented sectors generally underperform as semiconductor stocks surge higher. The consumer staples sector (-1.6%) is particularly weak, with Costco (COST 912.68, -40.45, -4.24%) moving lower after its June adjusted comparable sales (+7%) trailed May's (+8%), while PepsiCo (PEP 137.87, -4.62, -3.25%) lags after narrowly beating EPS expectations, though its North America results were softer than expected.

While today's gains have broadened beyond technology, semiconductor stocks continue to drive the market's leadership. The combination of easing oil prices and renewed AI enthusiasm has helped investors look past ongoing geopolitical tensions for now.

Reviewing today's data:

• Weekly Initial Claims 215K (Briefing.com consensus 220K); Prior was revised to 217K from 215K, Weekly Continuing Claims 1.814 mln; Prior was revised to 1.806 mln from 1.814 mln
  • The key takeaway from the report is the same key takeaway as other recent reports: the low level of initial jobless claims continues to reinforce the understanding that layoff activity remains quite low overall.
• June Existing Home Sales 4.09 mln (Briefing.com consensus 4.20 mln); Prior was revised to 4.19 mln from 4.17 mln
  • The key takeaway from the report is that affordability conditions improved across all regions as wage growth outpaced home price growth; however, overall sales were still pressured by high prices and elevated mortgage rates.