[BRIEFING.COM] The major averages trade in an increasingly narrow range as the long holiday weekend approaches.

Corporate news flow is on the lighter side, but there are still a few headlines of note across today's outperformers. Bloomberg reported that Amazon (AMZN 243.89, +2.19, +0.91%) is looking to commence an internet offering later this year following its most recent satellite launch, while The Information reports that Microsoft (MSFT 391.11, +6.83, +1.78%) is planning an overhaul of its AI application.

[BRIEFING.COM] The major averages remain little changed from previous levels, with the S&P 500 (-0.6%) and Nasdaq Composite (-1.3%) remaining firmly lower while the DJIA (+0.4%) holds on to a modest gain.

The Russell 2000 (-1.1%) and S&P Mid Cap 400 (-1.1%) hold similar losses as U.S. Treasuries drift toward their unchanged levels after opening gains. Despite this week's 'broadening out' theme, the smaller cap indices lag the major averages on a week-to-date basis.

[BRIEFING.COM] The S&P 500 (-0.6%), Nasdaq Composite (-1.4%), and DJIA (+0.5%) are mostly lower just after midday as another sharp pullback across semiconductor stocks and select mega-cap names weighs on the major averages, while broad strength elsewhere in the market keeps the overall tone constructive.

The S&P 500 briefly traded above the 7,500 level earlier in the session before reversing alongside semiconductor stocks. The PHLX Semiconductor Index, which was up more than 1% shortly after the open, is now down 6.1%. There has been no obvious catalyst for the reversal, with today's action appearing to reflect a continued unwinding of the group's recent momentum trade after two strong sessions to start the week. The slide has pushed the semiconductor index back into negative territory for the week.

The information technology sector (-1.9%) is the day's weakest performer, though Apple (AAPL 307.19, +12.81, +4.35%) and Microsoft (MSFT 389.24, +4.96, +1.29%) continue to provide meaningful support.

Elsewhere among the mega-cap names, Meta Platforms (META 585.39, -27.52, -4.49%) is giving back a portion of yesterday's rally, while Tesla (TSLA 391.65, -33.65, -7.91%) has reversed sharply after initially climbing on a better-than-expected second-quarter deliveries report. The Vanguard Mega Cap Growth ETF is down 1.3%, and the communication services (-1.9%) and consumer discretionary (-0.8%) sectors join information technology among today's laggards.

Despite the weakness across technology, the broader market continues to show healthy participation. Seven S&P 500 sectors trade higher, led by the health care (+2.2%), consumer staples (+2.1%), utilities (+1.5%), materials (+1.3%), and financials (+1.2%) sectors. The rotation into health care has become increasingly pronounced, with the SPDR Health Care ETF (XLV) climbing roughly 9% over the past two weeks while the PHLX Semiconductor Index has fallen approximately 12% during the same stretch.

As a result, the S&P 500 Equal Weight Index (+0.3%) continues to outperform its market-weighted counterpart, reinforcing that today's weakness remains concentrated in a relatively small group of influential stocks rather than the broader market.

So far, today's action suggests investors continue to rotate within the equity market rather than exit it altogether. While the S&P 500 has once again struggled to hold above the 7,500 level amid renewed semiconductor weakness, continued leadership from health care and several other sectors points to a market that remains constructive beneath the surface.

Reviewing today's data:

• June Nonfarm Payrolls 57K (Briefing.com consensus 110K); Prior was revised to 129K from 172K, June Nonfarm Private Payrolls 49K (Briefing.com consensus 88K); Prior was revised to 97K from 120K, June Unemployment Rate 4.2% (Briefing.com consensus 4.3%); Prior 4.3%, June Average Hourly Earnings 0.3% (Briefing.com consensus 0.3%); Prior 0.3%, June Average Workweek 34.3 (Briefing.com consensus 34.3); Prior 34.3
  • The key takeaway from the report for the market, which likes to see the good in the bad, is that the softer payrolls and pressure on real earnings should temper concerns about an imminent rate hike.
• Weekly Initial Claims 215K (Briefing.com consensus 220K); Prior was revised to 216K from 215K, Weekly Continuing Claims 1.814 mln; Prior was revised to 1.812 mln from 1.821 mln
  • The key takeaway from the report is that initial jobless claims continue to track at low levels, offering a nice cue that suggests the labor market, overall, remains on solid ground.
• May Factory Orders -1.3% (Briefing.com consensus 1.5%); Prior was revised to 5.3% from 4.8%
  • The key takeaway from the report is that the headline weakness was a function of a large decline in volatile transportation equipment orders. Exclude that factor, and factory orders were quite solid in May.

[BRIEFING.COM] The S&P 500 (-0.3%) and Nasdaq Composite (-1.0%) continue to chart session lows as tech stocks lag, while strength in the broader market keeps the DJIA (+0.7%) firmly higher.

Health care sector (+2.2%) components such as Boston Scientific (BSX 45.60, +2.54, +5.91%), Moderna (MRNA 77.18, +4.68, +6.46%), and Universal Health (UHS 159.14, +8.56, +5.68%) hold a clean sweep of the top spots on the S&P 500 leaderboard as investors continue to rotate into one of this year's weakest performing S&P 500 sectors.

While the sector as a whole has underperformed this year (+5.3% year-to-date), the iShares Biotechnology ETF (+14.7% year-to-date) has outperformed and is up another 1.8% today.

[BRIEFING.COM] The major averages trade mostly lower at midday.

Lower oil prices continue to provide support to the broader market, with WTI crude currently down $0.84 (-1.2%) to $67.74 per barrel. Multiple reports suggest that Iran is insistent on charging tolls on ships traversing the Strait of Hormuz, though that has yet to keep oil prices from retreating back to pre-conflict levels.

[BRIEFING.COM] The S&P 500 (+0.1%), Nasdaq Composite (-0.4%), and DJIA (+0.7%) are mixed shortly before midday as stocks see a continuation of yesterday's main trends.

Chipmakers and other AI-infrastructure stocks have given up their opening gains, with the PHLX Semiconductor now down 3.3%, sending the index into negative week-to-date territory. The information technology sector (-0.6%) holds a more modest loss as Apple (AAPL 306.35, +11.97, +4.07%) and Microsoft (MSFT 388.69, +4.41, +1.15%) are once again cushioning the chipmaker weakness.

Mega-cap stocks elsewhere are not quite as supportive, with Meta Platforms (META 589.19, -23.72, -3.87%) giving back a chunk of yesterday's 9% rally while Tesla (TSLA 399.37, -25.93, -6.10%) sinks despite a strong Q2 deliveries report.

However, the broader market is picking up some of that slack as investors continue to rotate instead of pulling out of equities entirely. Eight S&P 500 sectors trade higher, five of which hold gains wider than 1.0%. The defensive health care (+2.1%), consumer staples (+1.7%), and utilities (+1.3%) sectors are particularly strong amid the weakness across mega-cap names. As a result, the S&P 500 Equal Weighted Index (+0.4%) outperforms the market-weighted S&P 500 (+0.1%).

[BRIEFING.COM] The Nasdaq Composite (-0.3%) has entered negative territory as losses begin to swell across tech and select mega-cap names.

Tesla (TSLA 395.94, -29.36, -6.90%) is a "magnificent seven" laggard despite a strong Q2 deliveries report, in which the company said it produced over 450,000 vehicles, delivered over 480,000 vehicles, and deployed 13.5 GWh of energy storage products

[BRIEFING.COM] The S&P 500 (+0.5%) and Nasdaq Composite are off their best levels of the morning as semiconductor names reverse from their early gains. The PHLX Semiconductor Index is now down 1.8%, which pushes the information technology sector (+0.2%) back towards its flatline.

Factory orders declined 1.3% month-over-month in May (Briefing.com consensus: 1.5%) following an upwardly revised 5.3% increase (from 4.8%) in April. Excluding transportation, factory orders increased 1.9% on the heels of a 1.7% increase in April. Shipments of manufactured goods jumped 1.6% after increasing 1.3% in April.

The key takeaway from the report is that the headline weakness was a function of a large decline in volatile transportation equipment orders. Exclude that factor, and factory orders were quite solid in May.

[BRIEFING.COM] The S&P 500 (+0.7%), Nasdaq Composite (+0.8%), and DJIA (+0.6%) opened to broad gains, with the DJIA notching another all-time high.

Nine S&P 500 sectors trade higher, with each holding a gain of 0.5% or wider. The energy sector (+1.2%) leads the advance despite WTI crude oil slipping below $68 per barrel.

The information technology sector (+1.2%) is also moving higher this morning, with Palantir Technologies (PLTR 131.68, +5.96, +4.74%) once again leading a strong early showing from software names, while the PHLX Semiconductor Index (+0.9%) rises off of yesterday's lows.

Weakness is limited to the communication services (-0.1%) and consumer discretionary (-0.4%) sectors, as some of their mega-cap components move lower after sharp gains yesterday.

Just released, factory orders decreased 1.3% month-over-month in May (Briefing.com consensus: 1.5%) following an upwardly revised 5.3% increase (from 4.8%) in April.

The stock market remains on track for a higher opening as semiconductor stocks look to bounce back from yesterday's rout while the market assesses this morning's economic data.

Nonfarm payrolls increased by just 57,000, while nonfarm private payrolls rose by just 49,000, driven by a 69,000 increase in private education and health services that was offset by a 61,000 decline in leisure and hospitality. Moreover, one can extrapolate that average hourly earnings struggled again to keep up with inflation. They were up 0.3% month-over-month in June, pitted against a 0.5% month-over-month increase in CPI inflation in May.

The key takeaway from the report for the market, which likes to see the good in the bad, is that the softer payrolls and pressure on real earnings should temper concerns about an imminent rate hike.

The S&P 500 futures currently trade 18 points above fair value.

Equity indices had a mixed showing on Thursday with South Korea's Kospi (-7.9%) falling past it 50-day moving average to a three-week low amid weakness in Samsung and SK Hynix. Japanese officials are reportedly considering a shift away from hinting at interventions before they take place. Japan's Prime Minister Takaichi is visiting India, looking to form some reciprocal agreements on investment. Berkshire Hathaway has reportedly continued increasing its stakes in top Japanese trading houses. Japan's final tax revenue for the last fiscal year is expected to reach a six-year high.

• In economic data:
  • Japan's June Monetary Base -13.7% yr/yr (expected -10.0%; last -12.2%)
  • South Korea's June CPI 0.1% m/m, as expected (last 0.5%); 3.2% yr/yr, as expected (last 3.1%)
  • Hong Kong's May Retail Sales 7.9% yr/yr (last 8.6%)
  • Australia's May trade deficit AUD3.018 bln (expected surplus of AUD2.190 bln; last surplus of AUD1.383 bln). May Imports 2.6% m/m (last 0.2%) and Exports -6.9% m/m (last 7.2%)
  • New Zealand's May Building Consents -4.0% m/m (last 11.1%)

---Equity Markets---

• Japan's Nikkei: -2.5%
• Hong Kong's Hang Seng: +0.8%
• China's Shanghai Composite: -2.0%
• India's Sensex: +0.8%
• South Korea's Kospi: -7.9%
• Australia's ASX All Ordinaries: UNCH

Major European indices trade in the green. The European Central Bank's policy forum in Portugal concluded, leading the market to believe that not just the Federal Reserve, but the Bank of England and the European Central Bank are also looking to pull back from giving constant forward guidance. Germany's Chancellor Merz said that a pension overhaul will be complete by the end of the year, adding that income tax cuts amounting to about EUR10 bln are in the cards.

• In economic data:
  • Eurozone's May Unemployment Rate 6.2% (expected 6.3%; last 6.2%)
  • France's May government budget deficit EUR93.3 bln (last deficit of EUR69.6 bln)
  • Italy's May Unemployment Rate 5.0% (expected 5.1%; last 5.1%)
  • Spain's June Unemployment Change -28,700 (expected -40,800; last -36,300)
  • Swiss June CPI 0.0% m/m (expected 0.1%; last 0.2%); 0.5% yr/yr, as expected (last 0.6%)

---Equity Markets---

• STOXX Europe 600: +1.1%
• Germany's DAX: +1.5%
• U.K.'s FTSE 100: +0.8%
• France's CAC 40: +1.3%
• Italy's FTSE MIB: +1.8%
• Spain's IBEX 35: +1.5%

The S&P 500 futures currently trade 41 points above fair value.

Just released, nonfarm payrolls increased by 57,000 (Briefing.com consensus: 110,000) in June. May nonfarm payrolls were revised to 129,000 from 172,000.

June private sector payrolls increased by 49,000 (Briefing.com consensus: 88,000). May private sector payrolls were revised to 97,000 from 120,000.

The June unemployment rate was 4.2% (Briefing.com consensus: 4.3%) versus 4.3% in May.

June average hourly earnings were up 0.3% (Briefing.com consensus: 0.3%) on the heels of a 0.3% increase in May.

The average workweek in May was 34.3 hours (Briefing.com consensus: 34.3) versus 34.3 hours in May.

Initial jobless claims for the week ending June 27 declined by 1,000 to 215,000 (Briefing.com consensus: 220,000) from the upwardly revised previous level of 216,000 (from 215,000).

Continuing jobless claims for the week ending June 20 increased by 2,000 to 1.814 million from the downwardly revised prior level of 1.812 million (from 1.821 million).

Equity futures point to a mostly higher open to kick off the last session of a holiday-abbreviated week. Stocks finished mixed in yesterday's action as semiconductor names pulled back after two sharply higher sessions, though rotation into other pockets of the market alongside solid gains in other mega-cap tech names kept things muted at the index level.

Semiconductors are weaker in the premarket again today, with South Korean semiconductor names finishing sharply lower overnight.

Meanwhile, the major averages are on pace for solid weekly gains across the board, with plenty of analyst commentary highlighting the healthiness of this week's rotational action.

Crude oil is on pace for its fourth consecutive weekly decline, adding to the market's positive sentiment. Bloomberg reports that oil continues to flow through the Strait of Hormuz, which underscores Iran's limited ability to halt shipping.

On the data front, investors have plenty of employment data to assess this morning, with the June Employment Situation Report slated for 8:30 a.m. ET alongside weekly jobless claims data.

In corporate news:

• OpenAI discussed giving the U.S. government a 5% stake, according to Financial Times.
• Apple (AAPL 295.20, +0.82, +0.3%) is lobbying the U.S. to purchase chips from two Chinese companies amid the global memory shortage, according to Bloomberg.
• The EU Court of Justice upheld Alphabet's (GOOG 354.39, -3.50, -1.0%) fine of around 4.1 billion.

Reviewing overnight developments:

Equity indices had a mixed showing on Thursday with South Korea's Kospi (-7.9%) falling past it 50-day moving average to a three-week low amid weakness in Samsung and SK Hynix. Japan's Nikkei: -2.5%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: -2.0%, India's Sensex: +0.8%, South Korea's Kospi: -7.9%, Australia's ASX All Ordinaries: UNCH.

In news:

• Japanese officials are reportedly considering a shift away from hinting at interventions before they take place.
• Japan's Prime Minister Takaichi is visiting India, looking to form some reciprocal agreements on investment.
• Berkshire Hathaway has reportedly continued increasing its stakes in top Japanese trading houses.
• Japan's final tax revenue for the last fiscal year is expected to reach a six-year high.

In economic data:

• Japan's June Monetary Base -13.7% yr/yr (expected -10.0%; last -12.2%)
• South Korea's June CPI 0.1% m/m, as expected (last 0.5%); 3.2% yr/yr, as expected (last 3.1%)
• Hong Kong's May Retail Sales 7.9% yr/yr (last 8.6%)
• Australia's May trade deficit AUD3.018 bln (expected surplus of AUD2.190 bln; last surplus of AUD1.383 bln). May Imports 2.6% m/m (last 0.2%) and Exports -6.9% m/m (last 7.2%)
• New Zealand's May Building Consents -4.0% m/m (last 11.1%)

Major European indices trade in the green. STOXX Europe 600: +0.6%, Germany's DAX: +0.8%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.9%, Italy's FTSE MIB: +1.2%, Spain's IBEX 35: +1.1%.

In news:

• The European Central Bank's policy forum in Portugal concluded, leading the market to believe that not just the Federal Reserve, but the Bank of England and the European Central Bank are also looking to pull back from giving constant forward guidance.
• Germany's Chancellor Merz said that a pension overhaul will be complete by the end of the year, adding that income tax cuts amounting to about EUR10 bln are in the cards.

In economic data:

• Eurozone's May Unemployment Rate 6.2% (expected 6.3%; last 6.2%)
• France's May government budget deficit EUR93.3 bln (last deficit of EUR69.6 bln)
• Italy's May Unemployment Rate 5.0% (expected 5.1%; last 5.1%)
• Spain's June Unemployment Change -28,700 (expected -40,800; last -36,300)
• Swiss June CPI 0.0% m/m (expected 0.1%; last 0.2%); 0.5% yr/yr, as expected (last 0.6%)

[BRIEFING.COM] Stocks kicked off the third quarter on a relatively quiet note following a powerful second quarter for equities. The S&P 500 (-0.2%) and Nasdaq Composite (-0.7%) finished modestly lower after giving back earlier gains, while the DJIA finished on its flat line after touching another intraday record high. Despite a sharp pullback across semiconductor stocks, losses at the index level remained surprisingly contained as strength across several other mega-cap technology names and the broader market helped cushion the decline.

Semiconductor stocks paused after leading the market higher over the previous two sessions. The PHLX Semiconductor Index fell 6.3%, with weakness spanning memory names, chip equipment manufacturers, and AI infrastructure companies, suggesting the retreat was driven more by profit-taking than any single industry-specific development. Corning (GLW 220.70, -34.74, -13.60%) and KLA Corporation (KLAC 266.19, -35.52, -11.77%) finished among the S&P 500's weakest performers.

Despite the pressure on chipmakers, the broader technology complex proved far more resilient. The information technology sector (-1.8%) recovered from a steeper intraday decline as software stocks continued to outperform. The iShares Expanded Tech-Software ETF (IGV) climbed 3.0%, while Apple (AAPL 294.38, +5.02, +1.73%) and Microsoft (MSFT 384.28, +11.26, +3.02%) both posted solid gains.

Palantir Technologies (PLTR 125.73, +9.06, +7.77%) also outperformed after President Trump's latest financial disclosure showed he purchased between $100,000 and $250,000 worth of the company's shares. The Vanguard Mega Cap Growth ETF finished flat, underscoring the resilience across the market's largest growth stocks despite the sharp decline in semiconductor shares.

The communication services sector (+2.6%) finished with the widest gain, driven by Meta Platforms' (META 612.91, +49.62, +8.81%) surge after Bloomberg reported the company plans to build a cloud business that would sell access to AI computing infrastructure.

The consumer discretionary sector (+0.8%) also outperformed as Amazon (AMZN 241.70, +3.36, +1.41%), Tesla (TSLA 425.38, +4.78, +1.14%), and NIKE (NKE 43.06, +2.01, +4.90%) all finished higher. Nike's better-than-feared quarterly results helped reinforce investor confidence that the company's turnaround continues to make gradual progress despite management's cautious near-term outlook.

The financials sector (+2.1%) also posted broad-based gains. FactSet (FDS 245.55, +15.47, +6.72%) was among the sector's top-performing components after topping earnings expectations, while Coinbase Global (COIN 159.24, +13.05, +8.93%) and Robinhood Markets (HOOD 108.65, +8.37, +8.35%) advanced alongside a rebound in Bitcoin prices.

Elsewhere, the tone was more mixed. General Mills (GIS 37.77, +2.97, +8.53%) rallied after topping quarterly earnings expectations and issuing fiscal 2027 guidance that was broadly in line with estimates, though the consumer staples sector (-0.3%) still finished lower. Walmart (WMT 108.82, -4.44, -3.92%) remained under pressure after CNBC's David Faber reported that Cleveland Research issued a negative report citing slowing comparable sales and warning the retailer may need to lower prices to clear excess inventory.

Constellation Brands (STZ 136.88, -2.21, -1.59%) also declined despite beating earnings expectations and reaffirming its fiscal 2027 outlook.

The utilities sector (-1.1%) continued its recent underperformance, while the industrials sector (-1.1%) also lagged as Caterpillar (CAT 991.41, -73.49, -6.90%) pulled back from record highs.

Crude oil futures settled $0.83 lower (-1.2%) at $68.69 per barrel as Axios reported that the U.S. is attempting to persuade Iran not to impose tolls on shipping through the Strait of Hormuz. Bloomberg separately reported that traffic through the waterway has increased to roughly 10 million barrels per day with support from the U.S. military, easing concerns about disruptions to global energy supplies.

Outside the S&P 500, the Russell 2000 (-0.4%) slipped into negative territory after reaching another intraday record high, while the S&P Mid Cap 400 (-0.8%) finished lower.

Overall, today's session suggested that investors remain willing to rotate within technology rather than broadly reduce risk following a powerful second quarter for equities. The PHLX Semiconductor Index endured a sizeable decline, yet the Vanguard Mega Cap Growth ETF finished flat and the S&P 500 Equal Weight Index (+0.2%) outperformed its market-weighted counterpart, highlighting the market's resilience beneath the surface. As the third quarter gets underway, today's action suggests the broadening in market participation remains intact even as leadership continues to evolve.

U.S. Treasuries extended this week's losses during the first session of July, though intraday action was largely confined to a sideways range near rebound highs. The 2-year note yield settled up two basis points to 4.16%, and the 10-year note yield settled up six basis points to 4.48%. 

• Russell 2000: +21.4% YTD
• S&P Mid Cap 400: +15.6% YTD
• Nasdaq Composite: +12.0% YTD
• S&P 500: +9.3% YTD
• DJIA: +8.8% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 0.0%; Prior 1.0%
• June ADP Employment Change 98K (Briefing.com consensus 112K); Prior 122K
• June S&P Global U.S. Manufacturing PMI - Final 53.9; Prior 55.7
• May Construction Spending 0.1% (Briefing.com consensus 0.5%); Prior was revised to 0.3% from 0.4%
  • The key takeaway from the report is that public construction spending was the driver of the modest growth in total construction spending in June. Private construction spending activity was disappointing.
• June ISM Manufacturing Index 53.3% (Briefing.com consensus 53.8%); Prior 54.0%
  • The key takeaway from the report is that there was a general slowdown indicated versus May across most components of the report, yet the slowdown that will matter most is the one seen in the prices index, which is still quite high but nonetheless moving in the preferred direction.