The major averages finished the midweek session mostly lower as mounting losses across semiconductor and mega-cap names weighed on the S&P 500 (-0.1%) and Nasdaq Composite (-0.4%) this afternoon. The DJIA (+0.4%) escaped with a modest gain following another solid showing from the broader market that was supported by another retreat in oil prices and Treasury yields.

Stocks traded in a relatively stable range for the first half of the session. Semiconductor performance was mixed, despite premarket gains indicating a possible buy-the-dip move after yesterday's retreat and a solid rebound across South Korean tech stocks.

Meanwhile, other mega-cap tech names provided the market with the boost that some investors were expecting from the semiconductor group. At midday, all of the "magnificent seven" cohort traded higher, as mega-caps took part in the broader rally as oil prices and Treasury yields retreated. The gains would not hold.

Only one "magnificent seven" name would finish with a slight gain, sending the Vanguard Mega Cap Growth ETF (-0.4%) lower after it had held a nearly 1% gain earlier in the session.

The information technology sector (-0.6%) finished as one of the worst-performing S&P 500 sectors as its largest components reversed course. Losses ramped up across semiconductor names, but the group made a last-minute push higher ahead of Micron's (MU 1047.22, -4.55, -0.43%) earnings release that saw the PHLX Semiconductor Index (-0.2%) finish with just a modest loss.

The communication services sector (-0.6%) also finished lower, with Alphabet (GOOG 345.02, -1.06, -0.30%) reversing an earlier gain after Bloomberg reported that two additional artificial intelligence researchers have left the company to join Anthropic.

While the afternoon reversal across technology capped gains at the index level, the broader market continued to perform well, reinforcing analyst commentary that market leadership is steadily broadening beneath the surface.

Six S&P 500 sectors finished higher, with the industrials sector (+1.2%) leading the advance as progressing negotiations between the U.S. and Iran and increased traffic through the Strait of Hormuz sent oil prices and Treasury yields firmly lower. The lower-yield environment was particularly supportive of construction-related names such as Builders FirstSource (BLDR 85.41, +8.68, +11.31%), while airlines such as United Airlines (UAL 130.54, +8.99, +7.40%) benefited from the retreat in oil prices, with WTI crude dipping below $70 per barrel.

The consumer discretionary sector (+0.8%) fared similarly, with travel-related names such as Booking Holdings (BKNG 181.28, +12.34, +7.30%) and Expedia Group (EXPE 262.15, +17.08, +6.97%) moving sharply higher, while homebuilders including PulteGroup (PHM 135.70, +9.15, +7.23%) and Lennar (LEN 92.96, +5.61, +6.42%) also outperformed. The iShares U.S Home Construction ETF finished 6.2% higher.

The defensive utilities (+1.1%), health care (+0.8%), and consumer staples (+0.6%) also extended this week's outperformance amid the volatility across tech names.

Unsurprisingly, the energy sector (-1.7%) was a laggard amid the retreat in oil prices. Outside of the S&P 500, the Russell 2000 (+0.4%) and S&P Mid Cap 400 (+0.6%) escaped with a portion of their earlier gains.

Overall, today's session extended the recent trend of heightened volatility across semiconductor and other mega-cap technology stocks, but it did little to derail the market's improving underlying backdrop. The DJIA's year-to-date gain now stands at 7.9%, edging ahead of the S&P 500's 7.5% advance as investors continue rotating into other pockets of the market rather than exiting equities altogether. Attention now turns to Micron's earnings report after the close, which could determine whether semiconductor stocks once again attract a meaningful buy-the-dip bid following another volatile session.

U.S. Treasuries climbed on Wednesday, making for a swift continuation of yesterday's bounce, which followed the highest settlement in the 2-year note yield since February 2025.  The complex settled on highs even though the U.S. Treasury's $70 billion 5-year note auction at 13:00 ET met underwhelming demand. The 2-year note yield settled down five basis points to 4.14%, and the 10-year note yield settled down nine basis points to 4.40%. 

• Russell 2000: +20.3% YTD
• S&P Mid Cap 400: +14.6% YTD
• Nasdaq Composite: +9.6% YTD
• DJIA: +7.8% YTD
• S&P 500: +7.5% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 1.0%; Prior -3.8%
• Q1 Current Account Balance -$226.8 bln (Briefing.com consensus -$237.5 bln); Prior was revised to -$221.1 bln from -$190.7 bln
• May New Home Sales 580K (Briefing.com consensus 627K); Prior was revised to 626K from 622K
  • The key takeaway from the report is that new home sales in May were pressured by affordability constraints tied to rising mortgage rates. Notably, the West region, which features the highest-priced homes, saw the biggest hit to sales month-over-month; however, there was also weakness in the more affordable South region, which is the nation's largest homebuilding market.