The stock market had an eventful session today, with firm inflation readings, rising Treasury yields, and higher oil prices pressuring tech and select mega-cap names, though solid rotational buying across the broader market helped the major averages finish well above their session lows. The Nasdaq Composite (-0.7%) lagged amid the weakness in growth stocks, while the S&P 500 (-0.2%) finished modestly lower, and strength in the broader market pushed the DJIA (+0.1%) to a slight gain late in the session.

Stocks opened to broad losses following the release of the April CPI report, which showed headline CPI (0.6%; Briefing.com consensus 0.6%) and Core CPI (0.4%; Briefing.com consensus 0.4%) in line with month-over-month expectations, though the year-over-year rates increased to 3.6% for headline CPI and 2.8% for core CPI, both remaining well above the Fed's 2.0% target. The increase in year-over-year inflation put upward pressure on Treasury yields, which was compounded by another surge in oil prices today (crude oil futures settled today's session $4.23 higher (+4.3%) at $102.30 per barrel).

Growth-oriented pockets of the stock market lagged as a result. In particular, the information technology sector (-1.0%) faced considerable pressure across its semiconductor components, which saw the PHLX Semiconductor Index (-3.0%) give back yesterday's gain. Qualcomm (QCOM 210.31, -27.22, -11.46%), Intel (INTC 120.61, -8.83, -6.82%), and Sandisk (SNDK 1451.94, -95.62, -6.18%) were among the worst-performing S&P 500 components after surging in yesterday's session.

However, it is worth noting that both the Semiconductor Index and the broader technology sector roughly halved their losses from session lows as investors bought into this morning's dip during the afternoon.

A late push back into positive territory from NVIDIA (NVDA 220.91, +1.47, +0.67%) added support and helped the Vanguard Mega Cap Growth ETF (-0.3%) finish well off its earlier lows.

There was some lingering weakness in Tesla (TSLA 433.44, -11.56, -2.60%) and Amazon (AMZN 265.82, -3.17, -1.18%) that kept the consumer discretionary sector (-1.0%) firmly lower, but that was the extent of considerable losses at the sector level.

The industrials (-0.4%) and materials (-0.1%) sectors also finished with losses that were tame compared to their earlier levels.

Seven S&P 500 sectors finished higher, which is relatively impressive considering eight sectors traded lower this morning. The health care (+1.9%) and consumer staples (+1.6%) sectors led the advance as investors sought more defensive holdings, padding their gains throughout the session even as the rotational buying broadened and growth stocks improved from their worst levels.

Investors also did some bargain hunting in the financials sector (+0.7%), which remains the worst-performing S&P 500 sector so far this year, while the energy sector (+0.7%) was supported by the increase in oil prices.

Outside of the S&P 500, the Russell 2000 (-1.0%) and S&P Mid Cap 400 (-0.7%) also finished well off their session lows, though both still underperformed as the market displayed a risk-off tone for much of the session.

All told, today's session felt somewhat like two distinct trading days in one. Early selling pressure tied to oil-driven inflation concerns and rising yields sent stocks sharply lower, particularly across growth and semiconductor names, but the tone improved considerably as rotational buying broadened and investors stepped back into many of the market's recent leaders. Despite the early weakness, the S&P 500 and Nasdaq Composite still finished not far below yesterday's record highs, leaving the broader uptrend largely intact and suggesting another rebound in semiconductor stocks could quickly fuel a renewed push into record territory.

U.S. Treasuries saw a continuation of Monday's poor start to the week, resulting in the highest settlement for the 30-year yield in nearly a year while yields on 10s and shorter tenors also finished at levels from last May, though they remained below their intraday highs from late March. The complex extended its losses during the final couple hours of action after the U.S. Treasury followed yesterday's weak 3-year note offering with a poor $42 billion 10-year note sale.

The 2-year note yield settled up five basis points to 4.00%, the 10-year note yield settled up five basis points to 4.46%, and the 30-year note yield settled up five basis points to 5.03%. 

• Russell 2000: +14.5% YTD
• Nasdaq Composite: +12.3% YTD
• S&P Mid Cap 400: +10.8% YTD
• S&P 500: +8.1% YTD
• DJIA: +3.5% YTD

Reviewing today's data:

• April NFIB Small Business Optimism 95.9 (Briefing.com consensus 96.1); Prior 95.8
• April CPI 0.6% (Briefing.com consensus 0.6%); Prior 0.9%, April Core CPI 0.4% (Briefing.com consensus 0.4%); Prior 0.2%
  • The key takeaway from the report is the elevated inflation readings, which are well above the Fed's 2.0% inflation target and a signal not to expect a rate cut anytime soon.
• The Treasury Department reported a $215.0 billion surplus for April (Briefing.com consensus: $202.5 bln), which was $43 billion less than the surplus reported for April 2025. Receipts totaled $837.3 billion, while outlays reached $622.3 billion.
  
  • The key takeaway from the report is the recognition that a healthy level of tax receipts helped fuel a narrowing in the fiscal year-to-date deficit versus the year-ago period. Moreover, the deficit for the 12-month period ending in April is down 16% from the same period a year ago.