Briefing.com

Daily Sector Wrap

Updated: 14-Jan-26 16:29 ET
Closing Market Summary: Mega-caps weigh on major averages

The S&P 500 (-0.5%), Nasdaq Composite (-1.0%), and DJIA (-0.1%) retreated amid a notable rotation out of mega-cap tech today. While the major averages finished well off of their session lows, today's losses pushed the indices into negative week-to-date territory. 

This morning's inflation data added to the "risk off" sentiment in the market today. 

The November PPI (0.2%; Briefing.com consensus: 0.2%) and Core PPI (0.0%; Briefing.com consensus: 0.2%) reports showed both measures rising on a year-over-year basis to 3.0% from 2.8% and 2.9%, respectively, further reinforcing the market's view that several more months may pass before the next potential rate cut. The data follows yesterday's December CPI release, in which both the headline figure (0.3%; Briefing.com consensus: 0.3%) and core CPI (0.2%; Briefing.com consensus: 0.3%) came in largely in line with expectations.

While neither report materially shifted the policy outlook, the lack of a downside inflation surprise, combined with equity prices sitting at record highs, has contributed to another pullback in stocks today, one that has proven sharper than recent bouts of weakness.

Despite a November Retail Sales report (0.6%; Briefing.com consensus: 0.4%) that topped expectations, the consumer discretionary sector (-1.8%) finished with the widest loss today. Amazon (AMZN 236.65, -5.95, -2.45%) and Tesla (TSLA 439.14, -8.06, -1.80%) provided weak mega-cap leadership, while lululemon athletica (LULU 203.14, -8.76, -4.13%) was a considerable laggard after the U.S. Supreme Court did not issue a ruling on the legality of President Trump's IEEPA tariffs today. 

The top-weighted information technology sector (-1.5%) closed with a similar loss. NVIDIA (NVDA 183.14, -2.67, -1.44%) and Microsoft (MSFT 459.38, -11.29, -2.40%) were among the mega-cap names that traded lower, while Intuit (INTU 566.60, -38.68, -6.39%) and AppLovin (APP 617.76, -50.86, -7.61%) finished with the widest losses across S&P 500 names today. 

The Vanguard Mega Cap Growth ETF would finish with a 1.3% loss, which was actually a solid improvement from session lows. Outside of the mega-cap realm, the market had a positive tilt, which helped the S&P 500 Equal Weighted Index (+0.4%) decidedly outperform the market-weighted S&P 500 (-0.5%). 

Though the financials sector (-0.2%) failed to notch a gain, the modesty of its loss is impressive considering the scope of losses in several major banking names today.  Wells Fargo (WFC 89.26, -4.30, -4.60%) was a notable laggard after missing revenue expectations, while Bank of America (BAC 52.52, -2.02, -3.71%) and Citigroup (C 112.41, -3.89, -3.34%) also moved lower despite topping estimates. 

Credit card names such as Capital One (COF 234.42, +3.00, +1.30%) and Visa (V 329.22, +1.34, +0.41%) saw modest gains after two consecutive sessions of weakness that followed President Trump's call for a one-year 10% cap on credit card interest rates. 

The energy sector (+2.3%) closed with the widest gain, supported by crude oil futures setting today's session $0.71 higher (+1.2%) at $61.88 per barrel. However, since the settlement closing, oil has given back today's gain and then some after President Trump said at a White House event that he has been told Iran is stopping the execution of protestors. 

Elsewhere, the consumer staples (+1.2%), consumer staples (+0.7%), and health care (+0.7%) sectors traded higher as investors sought more defensive positionings amid the mega-cap sell-off today.  The real estate sector (+1.1%) also captured a solid gain. 

Outside of the S&P 500, the Russell 2000 (+0.7%) captured another solid gain, with the S&P Mid Cap 400 (+0.1%) also finishing higher as the smaller-cap indices continue to outperform the major averages this year. 

Overall, today's session reflected the broadening of leadership that has been prevalent so far this year, though a notable trimming of mega-cap holdings pressured the major averages despite strength elsewhere. 

U.S. Treasuries enjoyed a midweek extension of their gains from Tuesday, sending yields on most tenors to one-week lows while the 30-year yield settled at its lowest level since early December. The 2-year note yield settled down two basis points to 3.51%, the 10-year note yield settled down three basis points to 4.14%, and the 30-year note yield settled down three basis points to 4.80%. 

  • Russell 2000: +6.8% YTD
  • S&P Mid Cap 400: +5.1% YTD
  • DJIA: +2.3% YTD
  • S&P 500: +1.2% YTD
  • Nasdaq Composite: +1.0% YTD

Reviewing today's data:

  • Weekly MBA Mortgage Applications Index 28.5%; Prior -9.7%
  • November Retail Sales 0.6% (Briefing.com consensus 0.4%); Prior was revised to -0.1% from 0.0%, November Retail Sales, ex-auto 0.5% (Briefing.com consensus 0.3%); Prior was revised to 0.2% from 0.4%
    • The key takeaway from the report is that retail sales rebounded smartly in November after the end of the government shutdown, driven by increases across most discretionary spending categories.
  • November PPI 0.2% (Briefing.com consensus 0.2%); Prior was revised to 0.1% from 0.3%, November Core PPI 0.0% (Briefing.com consensus 0.2%); Prior was revised to 0.3% from 0.1%
    • The key takeaway from the report is that PPI and core-PPI both increased on a year-over-year basis to 3.0% from 2.8% and 2.9%, respectively, which is to say they moved in the wrong direction to create a true sense of inflation calm and a seeming rate-cut guarantee.
  • Q3 Current Account Balance -$226.4 bln; Prior was revised to -$249.2 bln from -$251.3 bln
  • December Existing Home Sales 4.35 mln (Briefing.com consensus 4.15 mln); Prior was revised to 4.14 mln from 4.13 mln
    • The key takeaway from the report is that home sales in December increased across all regions, leading to the strongest increase in seasonally adjusted sales in nearly three years despite tight inventory levels.
  • October Business Inventories 0.3%; Prior was revised to 0.3% from 0.2%
  • The Fed's January Beige Book described overall economic activity as having increased at a slight to modest pace in eight Districts while three Districts saw no change and one reported a modest decline. Consumer spending increased during the holiday shopping season with higher-income consumers fueling the growth while remaining groups became more price sensitive. Auto sales were little changed while manufacturing was mixed. Residential real estate activity softened while employment was little changed.

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