Stock Market Update

[BRIEFING.COM] After opening the week with two powerful rallies, stocks are encountering some resistance today, with the major averages mixed just after midday. The S&P 500 (flat) and DJIA (+0.8%) both notched fresh record intraday highs this morning before surrendering much of their early gains, while the Nasdaq Composite (-0.4%) is pressured by some weakness across semiconductor stocks and several mega-cap technology names following the latest round of earnings reports. The Russell 2000 (-0.3%) and S&P MidCap 400 (-0.3%) also reached fresh record highs earlier in the session, though both are now charting a lower course.

The market is largely without the recent momentum across mega-cap tech and semiconductor stocks that drove the major averages to recent record highs, with several notable earnings reports and headlines weighing on sentiment. Alphabet (GOOG 360.75, -14.60, -3.89%) is a notable laggard after The Wall Street Journal recently reported that Google Chief Scientist Jeff Dean will depart to launch his own startup focused on scientific discovery. Meta Platforms (META 583.19, -4.75, -0.81%) turned negative intraday as well, and the communication services sector (-3.6%) is now the worst-performing S&P 500 sector despite a post-earnings gain in Walt Disney (DIS 99.89, +1.71, +1.74%).

The consumer discretionary sector (-0.4%) also lags amid weaker showings from Amazon (AMZN 272.57, -4.85, -1.75%) and Tesla (TSLA 323.60, -3.76, -1.15%) today.

Meanwhile, the information technology sector (+0.7%) remains higher despite a subdued showing from semiconductor stocks after yesterday's rally. The PHLX Semiconductor Index is flat, with Advanced Micro Devices (AMD 487.87, -30.71, -5.92%) facing some sell-the-news pressure after a strong run into its Q2 earnings report. Despite the choppiness across chipmakers today, NVIDIA (NVDA 221.39, +9.45, +4.46%) is a mega-cap standout after SpaceX (SPCX 115.71, -9.62, -7.68%), which also trades lower after earnings, said on its earnings call that the company plans to build exclusively on NVIDIA's Vera Rubin architecture.

Outside of more technology-focused sectors, action at the sector level is similar to that of recent sessions. The materials sector (+1.5%) continues to outperform, with Newmont Corporation (NEM 104.66, +6.93, +7.09%) among the best-performing S&P 500 components amid another increase in gold and silver prices today.

The industrials sector (+0.2%) also remains modestly higher as broad strength across the group outweighs a sharp post-earnings decline in Uber (UBER 67.16, -4.84, -6.72%).

Elsewhere, the defensive utilities (-1.3%) and consumer staples (-0.3%) sectors continue to underperform, though the health care sector (+0.9%) is a standout following strong earnings from Eli Lilly (LLY 1152.00, +36.32, +3.26%) and Amgen (AMGN 407.31, +17.29, +4.43%), with the latter contributing to the outperformance of the DJIA.

The energy sector (-1.5%) once again sits near the bottom of the standings as crude oil retreats modestly following steeper declines to start the week. The Associated Press reported that negotiators have finalized the draft of a deal to reopen the Strait of Hormuz, but it needs to be approved by Iran's Supreme Leader.

After two powerful sessions to start the week, today's mixed action appears more characteristic of consolidation than a broader shift in sentiment. With earnings season still in full swing and geopolitical headlines continuing to influence oil prices, investors remain focused on whether the market can regain its recent upward momentum.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -2.9%; Prior -6.4%
• July ADP Employment Change 44K (Briefing.com consensus 75K); Prior was revised to 95K from 98K
• July S&P Global U.S. Services PMI - Final 54.6; Prior 53.6
• July ISM Non-Manufacturing Index 54.1% (Briefing.com consensus 54.7%); Prior 54.0%
  • The key takeaway from the report is the understanding that services sector activity continues to run at a solid pace despite the persistence of ongoing cost pressures.