Weekly Wrap

The major averages moved lower this week as an extended unwind across semiconductor stocks overshadowed a generally constructive macro backdrop and the start of second-quarter earnings season. The Nasdaq Composite fell 2.9%, while the S&P 500 declined 1.6% and the DJIA lost 0.9%. Although cooler-than-expected inflation data and generally solid early earnings periodically improved sentiment, investors remained focused on the momentum reversal across AI-related semiconductor stocks, while escalating tensions between the U.S. and Iran fueled another sharp advance in oil prices and added to the market's cautious tone.

Semiconductor stocks remained the dominant influence on trading throughout the week. The PHLX Semiconductor Index tumbled 10.0% as investors continued taking profits across one of the market's strongest-performing groups, leaving the index in correction territory from its June high. Memory stocks bore the brunt of the selling pressure, though weakness broadened to encompass much of the AI hardware ecosystem. Several favorable company-specific developments—including better-than-expected results from Taiwan Semiconductor Manufacturing and ASML, along with encouraging long-term industry commentary—failed to reverse the trend, underscoring that investors were reducing exposure despite an outlook that remained fundamentally constructive. The information technology sector fell 3.8%, while the Vanguard Mega Cap Growth ETF declined 2.5%.

Weakness also spread beyond semiconductors as the week progressed. The communication services sector fell 2.4%, pressured by declines in several mega-cap internet names and a disappointing earnings reaction from Netflix. The consumer discretionary sector lost 1.3% as weakness across several of its largest components offset isolated pockets of strength. Even on sessions when broader market participation remained constructive, concentrated selling across large-cap growth stocks repeatedly dictated the direction of the major averages.

Outside of technology, leadership shifted toward areas that benefited from rising oil prices or offered a more defensive profile. WTI crude oil climbed roughly 9% for the week as escalating military activity involving the U.S. and Iran, along with the possibility of additional strikes, kept energy markets on edge. The energy sector rose 5.0%, easily leading the market. Real estate gained 2.3%, consumer staples advanced 1.4%, financials added 1.0%, and health care edged 0.1% higher, reflecting continued rotation away from the market's recent momentum leaders. Even so, those gains were not enough to offset the outsized drag created by the technology sector's decline.

The week's economic data generally came in better than feared. Both the June CPI and PPI reports showed further easing in inflation pressures, reducing expectations that the Federal Reserve would need to tighten policy in the near term. Retail sales excluding gasoline stations pointed to continued resilience in consumer spending, while weekly jobless claims remained historically low. Early earnings season also produced a number of better-than-expected results, particularly among the large banks, although investor reactions increasingly centered on forward guidance and company-specific outlooks rather than headline earnings beats.

Overall, the week's trading illustrated that favorable macroeconomic developments were not enough to overcome the ongoing rotation away from semiconductor stocks. Investors repeatedly looked past encouraging inflation data, solid earnings reports, and resilient economic indicators as the AI trade continued to unwind and geopolitical tensions pushed oil prices higher. While strength across energy, financials, real estate, and other defensive areas helped cushion the broader market, persistent selling across semiconductors and other large-cap growth stocks remained the defining theme of the week.

• S&P Mid Cap 400: -0.1% week-to-date
• Russell 2000: -0.5% week-to-date
• DJIA: -0.9% week-to-date
• S&P 500: -1.6% week-to-date
• Nasdaq Composite: -2.9% week-to-date

Monday:

The major averages finished near their session lows as technology stocks extended their recent weakness and another sharp surge in crude oil prices reinforced two of the market's dominant themes from last week. The S&P 500 (-0.8%), Nasdaq Composite (-1.6%), and DJIA (-0.3%) all finished lower, with the technology-heavy Nasdaq bearing the brunt of the selling pressure.

Semiconductor stocks remained at the center of today's weakness, with the information technology sector (-2.1%) finishing near its session low as the PHLX Semiconductor Index fell 4.8. The group's recent trading has been notably volatile, though the short-term trend has turned increasingly negative, leaving the semiconductor benchmark down over 13% since the start of July.

Memory names such as Sandisk (SNDK 1673.97, -241.95, -12.63%) were among the weakest performers after SK hynix Inc. (SKHY 152.35, -15.66, -9.32%) pulled back following Friday's strong Nasdaq ADR debut.

Taiwan Semiconductor Manufacturing (TSM 421.58, -12.53, -2.89%) held up relatively well after reporting another month of robust revenue growth. Elsewhere in technology, Microsoft (MSFT 390.99, +5.89, +1.53%) outperformed its mega-cap peers, though it did little to offset broader weakness across the group.

The technology-led selling spilled into other growth-oriented areas of the market, pressuring the consumer discretionary (-0.7%) and communication services (-1.0%) sectors. The Vanguard Mega Cap Growth ETF fell 1.5%, while the market-weighted S&P 500 (-0.8%) significantly underperformed the S&P 500 Equal Weight Index (-0.1%), underscoring the outsized influence of the market's largest technology companies.

Geopolitical developments added another headwind as crude oil climbed steadily throughout the session. U.S. Central Command announced that forces will resume blockading maritime traffic entering and exiting Iranian ports beginning July 14 at 4:00 p.m. ET. WTI crude oil futures settled up $6.73 (+9.4%) at $78.42 per barrel, lifting the energy sector (+3.2%) well ahead of the broader market as Valero Energy (VLO 295.79, +15.10, +5.38%) and Diamondback Energy (FANG 191.60, +8.21, +4.48%) ranked among the S&P 500's top performers. Even so, the broader impact of higher energy prices weighed on sentiment.

Outside of energy, investors rotated toward more defensive areas of the market. The consumer staples (+0.6%), utilities (+0.7%), health care (+0.3%), and real estate (+0.5%), sectors all finished higher.

The financials sector (+0.6%) also advanced despite modest weakness across several large banks ahead of tomorrow's slate of earnings reports.

The Russell 2000 (-0.8%) and S&P Mid Cap 400 (-0.6%) finished with losses similar to those of the major averages.

Today's action reinforced the market's recent tendency to swing alongside semiconductor stocks and oil prices, with renewed geopolitical tensions overwhelming the rotational buying interest that emerged earlier in the session. Attention now shifts to tomorrow's June CPI report and the unofficial start of second-quarter earnings season, where inflation data and guidance from several major banks are likely to determine whether those themes continue to dominate or give way to a broader set of market catalysts.

U.S. Treasuries began the week with losses across the curve, sending yields on the 5-year note and shorter tenors to fresh closing highs for the year while yields on the 10-year and 30-year notes approached their highs from May. The 2-year note yield settled up five basis points to 4.26%, and the 10-year note yield settled up four basis points to 4.61%.

Reviewing today's data:

• The Treasury Department reported a $120.3 billion deficit for June versus a surplus of $27.0 billion for the same period in June 2025. Receipts totaled $495.8 billion, while outlays reached $616.1 billion.
  • The key takeaway from the report is the recognition that tariff refunds are cutting into government receipts at the same time the amount spent on net interest is going up. The results is a 12-month budget deficit that exceeds the 12-month deficit registered in May.

Tuesday:

The stock market absorbed a crowded slate of developments today, allowing the S&P 500 (+0.4%) and Nasdaq Composite (+0.9%) to recover some of yesterday's losses while the DJIA finished flat. As in the previous session, swings in semiconductor stocks and crude oil remained central to the market's direction, while investors also digested a softer inflation report, Fed commentary, and earnings from several major banks.

Stocks opened to relatively broad gains following the release of the June CPI report, which showed headline deflation (-0.4%; Briefing.com consensus: -0.2%) and a flat core CPI reading (Briefing.com consensus: +0.2%), slowing the year-over-year CPI rate to 3.5% from 4.2% and the core rate to 2.6% from 2.9%. The release had a tangible impact on the market's implied expectations of the Fed's policy path, with CME FedWatch now assigning an 83.4% probability to the FOMC leaving rates unchanged at the July meeting, up from 58.3% yesterday. However, the FedWatch tool still assigns a greater than 50% probability (56.5%) to a rate hike at the September meeting.

Treasury yields moved lower in response to the release, which was a welcome sight for a market that faced another surge in energy prices today. WTI crude oil surged past the $80 per barrel mark this morning after President Trump formally notified Congress that the U.S. is at war with Iran. President Trump announced just before midday that the U.S. naval blockade would apply only to ships departing Iranian ports, which briefly sent oil lower, though it steadily rose throughout the afternoon. Crude oil futures settled today's session $0.98 higher (+1.3%) at $79.40 per barrel.

Additionally, the improved rate backdrop helped support gains across mega-cap technology stocks, which were largely the driver of today's index-level gains. The top-weighted information technology sector (+1.3%) finished with the widest gain as investors stepped in to buy yesterday's dip across semiconductor stocks, sending the PHLX Semiconductor Index 2.5% higher. NVIDIA (NVDA 211.81, +8.28, +4.07%) was a "Magnificent Seven" standout, while memory names rebounded alongside another sharp gain in SK hynix Inc.'s (SKHY 194.16, +41.81, +27.44%) ADRs. Bloomberg reported that the premium of the ADRs over the company's Korean-listed shares widened to nearly 50% as options on the ADRs began trading in the U.S.

Strength across semiconductor names helped offset a massive slide in IBM (IBM 217.07, -73.16, -25.21%) after the company issued disappointing Q2 guidance that fell short of expectations on both EPS and revenue. Commentary around temporary customer spending shifts gave a boost to cybersecurity stocks, helping CrowdStrike (CRWD 210.73, +22.82, +12.14%) finish as the best-performing S&P 500 component.

Goldman Sachs (GS 1140.00, +94.09, +9.00%) finished with the second-widest gain in the S&P 500, which also helped offset IBM's weakness in the DJIA. The company delivered perhaps the strongest earnings beat among this morning's slate of major bank reports. JPMorgan Chase (JPM 342.89, +8.36, +2.50%) and Bank of America (BAC 60.62, +1.12, +1.88%) also moved higher after earnings, while Citigroup (C 133.30, -7.41, -5.27%) and Wells Fargo (WFC 85.52, -2.14, -2.45%) moved lower despite also topping expectations, limiting the financials sector's (+0.2%) gain.

Elsewhere, the communication services sector (+1.1%) was an outperformer, supported by a solid gain in Alphabet (GOOG 357.33, +6.66, +1.90%) after the company broke ground on its largest solar and battery storage project to date to help power data centers.

The Vanguard Mega Cap Growth ETF finished 1.0% higher, contributing to the outperformance of the market-weighted S&P 500 (+0.4%) over the S&P 500 Equal Weighted Index (-0.4%).

Meanwhile, the defensive health care (-1.9%) and consumer staples (-1.4%) sectors were the biggest laggards as investors rotated back into more growth-oriented pockets of the market.

Outside the S&P 500, the Russell 2000 (+0.4%) and S&P Mid Cap 400 (+0.5%) captured similar gains to the S&P 500.

Despite a crowded slate of earnings, inflation data, Fed commentary, and geopolitical developments, today's market action remained heavily influenced by the familiar back-and-forth across semiconductor stocks and oil prices. Softer-than-expected inflation helped investors look past another surge in crude oil, making it easier for growth-oriented technology stocks to reclaim leadership and the major averages to recover a portion of yesterday's losses.

U.S. Treasuries rebounded from two days of losses on Wednesday with relative strength in shorter tenors pressuring their yields from highest settlement levels of the year while longer tenors lagged but still ended in positive territory. The 2-year note yield settled down seven basis points to 4.19%, and the 10-year note yield settled down two basis points to 4.59%.

Reviewing today's data:

• June NFIB Small Business Optimism 97.4 (Briefing.com consensus 95.6); Prior 95.3
• June CPI -0.4% (Briefing.com consensus -0.1%); Prior 0.5%, June Core CPI 0.0% (Briefing.com consensus 0.2%); Prior 0.2%
  • The key takeaway from the report is the softening in core inflation and the added softening in super core inflation, which excludes food, energy, and shelter. That component was up just 2.1% year-over-year. Inflation has not been slayed, but this report should be enough to keep the FOMC on hold at its July 28-29 meeting.

Wednesday:

The major averages finished higher across the board today, with the S&P 500 (+0.4%), Nasdaq Composite (+0.6%), and DJIA (+0.3%) overcoming another bout of weakness across semiconductor stocks as encouraging inflation data and continued strength among several other mega-cap technology names supported the broader market. Investors also digested another slate of earnings reports, Fed commentary, and geopolitical developments.

Semiconductor stocks remained a notable source of weakness, though they recovered well off their session lows into the close. The PHLX Semiconductor Index finished down 2.1% after falling more than 4% earlier in the session. ASML (ASML 1815.27, +39.63, +2.23%) delivered a beat-and-raise earnings report before the open, but the stock and the broader semiconductor space reversed course after initially pointing toward another day of gains, though the afternoon saw a solid intraday recovery.

Memory names such as Micron (MU 904.28, -78.84, -8.02%), Sandisk (SNDK 1615.00, -142.82, -8.12%), and, outside the S&P 500, SK hynix Inc. (SKHY 176.46, -17.46, -9.00%) were among the group's biggest laggards.

The information technology sector (-0.1%) also rebounded sharply from its intraday lows, finishing just shy of unchanged as strength across several of its largest components helped offset semiconductor weakness. Microsoft (MSFT 395.63, +10.70, +2.78%) and Apple (AAPL 327.50, +12.64, +4.01%) were "Magnificent Seven" standouts, with Apple benefiting from a report from The Information that the company is exploring acquisitions to bolster its AI chip capabilities.

Alphabet (GOOG 370.21, +12.88, +3.60%) and Amazon (AMZN 254.96, +7.47, +3.02%) also posted solid gains, helping lift the communication services (+2.8%) and consumer discretionary (+1.4%) sectors. The Vanguard Mega Cap Growth ETF rose 1.0%, underscoring continued leadership across growth-oriented stocks outside of the semiconductor space.

The financials sector (+0.7%) was another relative outperformer following another busy round of corporate news. BlackRock (BLK 1093.40, +67.96, +6.63%) finished sharply higher after earnings, while Morgan Stanley (MS 228.42, +0.75, +0.33%) ended flattish despite also topping expectations.

Elsewhere, PayPal (PYPL 55.52, +8.15, +17.20%) was the best-performing S&P 500 component after Reuters reported that Stripe and Advert International have offered to acquire the company for approximately $53 billion.

The industrials sector (-0.2%) recovered alongside semiconductor stocks during the afternoon, though Pentair (PNR 64.33, -11.35, -15.00%) remained a notable drag after sharply lowering its second-quarter and full-year guidance, citing weaker pool equipment demand driven by a more pronounced inventory realignment and deteriorating business conditions.

The energy sector (-0.8%) gave back a portion of its gains from earlier in the week as WTI crude oil futures settled today's session $0.22 higher (+0.3%) at $79.62 per barrel following a relatively quiet day of geopolitical headlines involving the U.S. and Iran. Oil prices moved higher after the settlement, however, after U.S. Central Command announced a second wave of strikes against Iran.

The utilities sector (-1.0%) was another laggard as investors continued rotating away from more defensive areas of the market in favor of growth-oriented stocks.

On the policy front, another favorable inflation reading reinforced yesterday's encouraging CPI report, as the June PPI fell 0.3% month-over-month (Briefing.com consensus: 0.1%). The report further reduced the market's expectations for a near-term rate hike, with the CME FedWatch Tool's implied probability of the FOMC leaving rates unchanged at its September meeting rising to 51.9% from 41.9% yesterday. New York Fed President John Williams (FOMC voting member) said there are encouraging reasons to believe inflation has peaked, while Fed Governor Lisa Cook (FOMC voting member) reiterated that she would support tighter policy if inflation fails to show further signs of cooling.

Despite another volatile session for semiconductor stocks, today's trading demonstrated that investors remained willing to reward other growth-oriented areas of the market when the inflation backdrop improved. While chipmakers remained an important source of day-to-day volatility, strength across the broader mega-cap technology complex ultimately proved sufficient to lift the major averages higher.

U.S. Treasuries had a solid showing today, primarily shorter-dated securities, which were bolstered by a market-friendly PPI reading this morning that kept rate-hike concerns for the July FOMC meeting in check. The 2-year note yield settled down six basis points to 4.13%, and the 10-year note yield settled down four basis points to 4.55%. 

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -2.7%: Prior -2.2%
• June PPI -0.3% (Briefing.com consensus 0.1%); Prior was revised to 0.6% from 1.1%, June Core PPI 0.2% (Briefing.com consensus 0.4%); Prior was revised to 0.1% from 0.4%
  • The key takeaway from the report is that it is an encouraging monthly marker of how the inflation data can improve with a decline in energy prices; however, it also reveals on a year-over-year basis that wholesalers are still dealing with high prices. Net-net, this report conveys the need for more improvement in bringing down wholesale prices, but it was better-than-feared when also factoring in the downward revisions to the prior month.
• July Empire State Manufacturing 15.6 (Briefing.com consensus 8.5); Prior 5.7

Thursday:

The major averages finished lower today, with the S&P 500 (-0.5%), Nasdaq Composite (-1.5%), and DJIA (-0.2%) retreating as another bout of weakness across semiconductor stocks, coupled with late selling in several other mega-cap technology names, outweighed continued rotational strength elsewhere in the market. While underlying participation remained relatively constructive, concentrated weakness across growth-oriented stocks ultimately dictated the direction of the major averages.

Semiconductor stocks remained the primary source of weakness throughout the session, with the PHLX Semiconductor Index falling 4.3%. Today's selling followed another double-digit overnight decline in SK hynix Inc.'s (SKHY 152.31, -24.15, -13.69%) Korean-listed shares, while Taiwan Semiconductor Manufacturing (TSM 410.06, -9.42, -2.25%) faced sell-the-news pressure despite delivering a beat-and-raise earnings report.

Memory stocks again bore the brunt of the weakness, with Sandisk (SNDK 1411.08, -203.92, -12.63%) and Seagate Tech (STX 745.49, -82.81, -10.00%) ranking among the worst-performing S&P 500 components.

Apple (AAPL 333.26, +5.76, +1.76%) and Microsoft (MSFT 401.10, +5.47, +1.38%) posted solid gains that helped cushion some of the pressure on the information technology sector (-1.8%), though they were not enough to offset the broader weakness across chipmakers.

Selling broadened across other mega-cap growth stocks as the afternoon progressed. The communication services sector (-3.0%) finished as the worst-performing S&P 500 sector after Alphabet (GOOG 353.81, -16.40, -4.43%) moved sharply lower on a Bloomberg report that the launch of its Gemini 3.5 Pro model has been delayed after missing internal performance targets. Meta Platforms (META 664.54, -16.77, -2.46%) also finished lower, while Netflix (NFLX 74.35, +0.67, +0.91%)edged higher ahead of its earnings report after the close.

Amazon (AMZN 249.89, -5.07, -1.99%) added to the weakness in the consumer discretionary sector (-0.3%), and the Vanguard Mega Cap Growth ETF fell 1.4%.

Even so, underlying participation remained stronger than the major averages suggested. The consumer staples sector (+2.9%) finished with the widest gain as broad-based strength, including solid advances in Coca-Cola (KO 84.92, +2.47, +3.00%) and Walmart (WMT 114.95, +2.42, +2.15%), helped cushion losses in the DJIA.

The health care sector (+2.2%) was another standout, supported by strong post-earnings gains in UnitedHealth (UNH 423.38, +4.86, +1.16%) and Abbott Labs (ABT 98.82, +9.55, +10.70%).

The real estate sector (+2.1%) also outperformed, while the S&P 500 Equal Weight Index (+1.0%) substantially outpaced the market-weighted S&P 500 (-0.5%).

The industrials sector finished little changed after a mixed slate of earnings reactions. GE Aerospace (GE 345.73, -14.62, -4.06%) traded lower despite delivering a beat-and-raise earnings report, while United Airlines (UAL 118.84, -2.13, -1.76%)declined after third-quarter guidance came in just below consensus despite a second-quarter earnings beat. Offsetting some of that weakness, J.B. Hunt Transport (JBHT 298.41, +22.13, +8.01%) rallied to a fresh record high after delivering a sizable earnings beat and offering encouraging commentary on its earnings call.

Meanwhile, the energy sector (+1.0%) extended this week's relative outperformance even as crude oil settled modestly lower following a comparatively quiet day of geopolitical headlines surrounding the U.S. and Iran.

Outside the S&P 500, the Russell 2000 (-0.3%) gave back its earlier gains, while the S&P Mid Cap 400 (+0.4%) managed to finish modestly higher.

Although today's session initially featured encouraging rotational strength outside of technology, renewed weakness across semiconductor stocks and late selling in several other mega-cap growth names ultimately overwhelmed that trend. Defensive sectors and the equal-weighted S&P 500 continued to demonstrate healthy underlying participation, but persistent pressure on the market's largest growth stocks remained the dominant influence on index-level performance.

U.S. Treasuries had a soft overnight session that was driven by selling across the curve that was mirrored by losses in other sovereign bond markets. The losses for the Treasury market dissipated as the cash session progressed, aided by a faltering stock market, a retreat in oil prices despite more saber rattling by Iran, and some technical resistance as the 10-yr note yield challenged the 4.60% level. The 2-year note yield settled up three basis points to 4.16%, and the 10-year note yield settled up two basis points to 4.57%. 

Reviewing today's data:

• July Philadelphia Fed Index 41.4 (Briefing.com consensus 11.0); Prior 10.3
• June Retail Sales 0.2% (Briefing.com consensus 0.3%); Prior was revised to 1.0% from 0.9%, June Retail Sales, ex-auto -0.2% (Briefing.com consensus 0.1%); Prior was revised to 1.0% from 0.8%
  • The key takeaway from the report is that the headline disappointments are misleading, as they were driven primarily by gasoline station sales (-5.3%). Excluding gasoline stations, retail sales were up a solid 0.7% in June on the heels of a 0.9% increase in May.
• Weekly Initial Claims 208K (Briefing.com consensus 219K); Prior was revised to 216K from 215K, Weekly Continuing Claims 1.805 mln; Prior was revised to 1.821 mln from 1.814 mln
  • The key takeaway from the report is that initial jobless claims remain historically low and a signpost for a labor market that is still light overall on layoff activity.
• May Business Inventories 0.3% (Briefing.com consensus 0.3%); Prior was revised to 0.6% from 0.5%
• July NAHB Housing Market 34 (Briefing.com consensus 37); Prior was revised to 36 from 35
• June Pending Home Sales -5.4% (Briefing.com consensus 0.4%); Prior was revised to 3.5% from 3.8%

Friday:

The major averages finished near their session lows as afternoon selling broadened across the market, overwhelming an earlier recovery in semiconductor stocks. The S&P 500 (-1.0%), Nasdaq Composite (-1.4%), and DJIA (-0.8%) all ended firmly lower, both for the session and the week.

Semiconductor stocks briefly erased nearly all of their early losses around midday before turning lower again into the close. The PHLX Semiconductor Index fell 1.6%, while the information technology sector declined 1.1%. Cadence Design (CDNS 330.11, -34.54, -9.47%) was among the group's weakest performers after Bloomberg reported that Moonshot AI's Kimi K3 model designed a functional semiconductor chip in just 48 hours using open-source tools rather than proprietary electronic-design-automation software. Synopsys (SNPS 384.28, -32.76, -7.85%) was another laggard, while memory-related stocks held up comparatively well after recovering from sharp opening losses.

Weakness remained especially pronounced across mega-cap growth stocks. The communication services sector (-2.3%) finished with the widest loss as Meta Platforms (META 646.01, -18.53, -2.79%) and Alphabet (GOOG 346.12, -7.69, -2.17%) saw an extension of yesterday's losses. Elsewhere in the sector, Netflix (NFLX 68.95, -5.40, -7.26%) plunged lower after a disappointing earnings report.

The Vanguard Mega Cap Growth ETF fell 1.5%, reflecting additional weakness across several of the market's largest technology-oriented names.

The consumer discretionary sector (-1.6%) also finished among the laggards. Its mega-cap components traded lower, while travel-related stocks and homebuilders faced additional pressure as oil prices surged. The iShares U.S. Home Construction ETF fell 2.9%.

The deterioration was not confined to growth stocks. Early gains of more than 1% across several defensive sectors were fully erased, with health care (-0.4%), utilities (-0.7%), and consumer staples (-0.8%) all finishing lower. Intuitive Surgical (ISRG 345.42, -56.91, -14.15%) was the worst-performing S&P 500 component despite topping second-quarter estimates, as investors focused on an unchanged outlook that implies slower da Vinci procedure growth during the second half of the year.

The energy sector (+0.8%) was the only S&P 500 sector to post a gain as crude oil futures settled $2.69 higher (+3.4%) at $81.67 per barrel. Oil extended its advance after Axios reported that President Trump could decide within days whether to escalate military action against Iran, with options reportedly including strikes on Iranian infrastructure, nuclear facilities, and the underground Pickaxe Mountain site.

Ultimately, the semiconductor group's midday recovery briefly offered some support, but it failed to alter the market's broader trajectory. Renewed weakness in chipmakers, sustained pressure on mega-cap growth stocks, and a sharp reversal across previously stronger defensive areas left the major averages at their lows as rising oil prices and mounting geopolitical uncertainty weighed on sentiment.

U.S. Treasuries finished the week with modest gains in the 5-year note and longer tenors while the short end ended slightly lower after backtracking from early highs. The 2-year note yield settled up one basis point to 4.17% (-4 bais points this week), and the 10-year note yield settled down three basis points to 4.54% (-3 basis points this week). 

Reviewing today's data:

• June Housing Starts 1.427 mln (Briefing.com consensus 1.328 mln); Prior was revised to 1.199 mln from 1.177 mln, June Building Permits 1.367 mln (Briefing.com consensus 1.403 mln); Prior was revised to 1.410 mln from 1.413 mln
  • The key takeaway from the report is that there wasn't any growth in single-unit starts or permits, which isn't a positive read for a housing market pinched by affordability issues.
• June Import Prices 0.3%; Prior was revised to 1.7% from 1.9%
• June Import Prices ex-oil 0.4%; Prior was revised to 0.7% from 0.8%
• June Export Prices -0.6%; Prior was revised to 1.2% from 1.3%
• June Export Price ex-ag -0.7%; Prior 1.2%
• June Industrial Production 0.1% (Briefing.com consensus 0.3%); Prior 0.1%, June Capacity Utilization 76.1% (Briefing.com consensus 76.2%); Prior was revised to 76.1% from 76.2%
  • The key takeaway from the report is that there was no increase in manufacturing output, something that hasn't happened since January.
• July Univ. of Michigan Consumer Sentiment - Prelim 54.4 (Briefing.com consensus 50.7); Prior 49.5
  • The key takeaway from the report was the correlation between lower gas prices and higher sentiment, the latter of which was pervasive across groups by age, wealth, income, and political party. Gas prices, though, have started to increase again with the military action between the U.S. and Iran, so it remains to be seen if this improved sentiment can be sustained.