Stocks finished mostly higher today as rotational buying across the broader market helped offset a pullback in tech names. The weakness across technology stocks kept the Nasdaq Composite (-0.1%) without a gain for the day, but broader support sent the DJIA (+1.7%) to fresh record highs while the S&P 500 (+0.4%) also notched a decent gain.

Tech stocks were poised for a lower session following decisive moves lower from Broadcom (AVGO 418.91, -60.32, -12.59%), Ciena (CIEN 535.63, -84.74, -13.66%), and CrowdStrike (CRWD 719.09, -28.52, -3.81%) following their earnings reports.

Broadcom in particular set the stage for a weaker showing across semiconductor names, with the PHLX Semiconductor Index retreating 2.2%. However, it is worth noting that the index finished much improved from the early weakness that saw it retreat nearly 6% this morning.

Meanwhile, the consumer staples sector (-0.1%) was the only other S&P 500 sector to close with a loss as nine sectors finished at or above their baselines.

The health care sector was the top mover today as nearly all of its components traded higher, with managed care names such as Humana (HUM 349.89, +22.35, +6.82%) and UnitedHealth (UNH 396.47, +19.47, +5.16%) leading the advance.

The financials sector (+2.6%) posted a similar gain, with major banking names notching solid gains while asset managers such as Blackstone (BX 118.55, +8.27, +7.50%) traded even higher following a manageable BCRED redemption update that reassured investors about private credit flows and demand.

Notably, the financials and health care sectors are the worst-performing S&P 500 sectors on a year-to-date basis, highlighting the rotational aspect of today's action.

Elsewhere, the communication services sector (+2.1%) outperformed as investors bought into the recent dip in Alphabet (GOOG 369.37, +13.69, +3.85%) that followed the announcement of an $84.75 billion equity capital raise to expand AI infrastructure and compute.

Outside of the S&P 500, the Russell 2000 (+1.5%) outperformed as Treasury yields moved lower, while the S&P Mid Cap 400 (+0.4%) captured a more modest gain.

Overall, today's session reflected a healthy broadening in market participation, with investors rotating into financials, health care, and other previously lagging groups as technology stocks took a breather. The ability of the S&P 500 and DJIA to advance despite a notable semiconductor pullback suggests underlying market sentiment remains constructive, particularly as investors continue to buy weakness rather than retreat from risk assets.

U.S. Treasuries traded with a positive bias in the overnight session before losing some strength in the cash session. Yields, however, were still lower across the board, with the front end to the intermediate end of the curve exhibiting relative strength in a bull-steepener trade. The 2-year note yield settled down four basis points to 4.05%, and the 10-year note yield settled down one basis point to 4.48%. 

• Russell 2000: +18.3% YTD
• Nasdaq Composite: +15.4% YTD
• S&P Mid Cap 400: +13.9% YTD
• S&P 500: + 10.8% YTD
• DJIA: +7.3% YTD

Reviewing today's data:

• Q1 Productivity-Rev. 0.3% (Briefing.com consensus 0.8%); Prior 0.8%, Q1 Unit Labor Costs-Rev. 1.8% (Briefing.com consensus 2.3%); Prior 2.3%
  • The key takeaway from the report is the understanding that productivity has picked up nicely from a year ago (+2.8%), while unit labor costs (+0.5%) have come down, tempering concerns about labor-based inflation pressures.
• Weekly Initial Claims 225K (Briefing.com consensus 216K); Prior was revised to 212K from 215K, Weekly Continuing Claims 1.777 mln; Prior was revised to 1.785 mln from 1.786 mln
  • The key takeaway from the report is that there isn't any concerning key takeaway. Granted, initial jobless claims-a leading indicator-were up from the prior week, but they remain at levels that are consistent with an otherwise solid labor market.