[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.3%), and DJIA (+0.3%) have reversed their early weakness just before midday.

Beneath the surface, signs of divergence remain between select tech names and the broader market. A 4.4% pullback in the PHLX Semiconductor Index keeps the information technology sector (-0.8%) firmly lower, despite Apple (AAPL 279.06, +3.91, +1.42%) and Microsoft (MSFT 371.07, +18.24, +5.17%) rebounding from yesterday's slide.

The industrials sector (-1.0%) holds a similar loss as electrical product names continue to move in lockstep with semiconductors, while losses are more modest elsewhere.

Similar to recent sessions, the broader market leans higher, with investors continuing to rotate into more cyclical and defensive pockets of the market. The defensive health care (+2.8%) and consumer staples (+1.5%) sectors add to this week's gains, while the consumer discretionary sector (+1.8%) outperforms amid broad strength and a rebound in its mega-cap components. The Vanguard Mega Cap Growth ETF (+0.6%) sits at session highs, pushing the major averages to their best levels of the session.

[BRIEFING.COM] The major averages now trade near their flat lines after steadily chipping away at their opening losses.

On the earnings front, FedEx Freight (FDXF 147.34, -11.20, -7.06%) shares are lower after the company's first earnings report as a standalone company delivered mixed signals, with revenue rising 4.8% year-over-year to $2.40 billion and coming in ahead of the $2.28 billion FactSet consensus. The problem for the stock is that the revenue growth was driven primarily by fuel surcharges and higher weight per shipment, while lower shipment volumes, a slight decline in base revenue per hundredweight, spin-off cost noise, and a transition-period margin outlook that did not clearly exceed the prior-year comparison left investors without the clean standalone reset they wanted.

[BRIEFING.COM] The S&P 500 (+0.1%), Nasdaq Composite (+flat), and DJIA (+0.1%) are rising off their opening lows as solid participation in the broader market helps offset weakness in chipmakers.

Additionally, mega-cap tech stocks outside of the semiconductor space have a slightly positive tilt, with the Vanguard Mega Cap Growth ETF up 0.1%.

The final reading for the University of Michigan Consumer Sentiment Index for June increased to 49.5 (Briefing.com consensus: 48.9) from the preliminary reading of 48.9. In the same period a year ago, the index stood at 60.7.

The key takeaway from the report is that sentiment was boosted by the moderation in gas prices; however, the higher cost of living in general remains a burden, as sentiment is still 13% below the level it stood at in February prior to the start of the Iran War and almost 20% less than the prior year period.

[BRIEFING.COM] The S&P 500 (-0.2%), Nasdaq Composite (-0.5), and DJIA (-0.1%) are modestly lower this morning as tech names face a continuation of recent weakness against a backdrop of mixed strength in the broader market.

The top-weighted information technology sector (-1.0%) is under pressure as its semiconductor components retreat from yesterday's highs. onsemi (ON 95.98, -22.76, -19.16%) is the worst-performing S&P 500 name after announcing the company will acquire Synaptics (SYNA 128.98, +3.36, +2.67%) in a $7 billion all-stock deal, while Micron (MU 1186.87, -26.69, -2.20%)gives back a chunk of yesterday's post-earnings gain. The PHLX Semiconductor Index is down 3.3%.

Weakness across semiconductor stocks weighs on electrical product names in the industrials sector (-0.8%), while the communication services sector (-0.8%) faces a continuation of weak leadership from Alphabet (GOOG 336.48, -5.71, -1.67%).

Meanwhile, six S&P 500 sectors trade higher, with the defensive health care (+2.8%) and consumer staples (+1.2%) sectors outperforming again.

Just released, the final reading of the June University of Michigan Consumer Sentiment Index rose to 49.5 (Briefing.com consensus 48.9) from the preliminary reading of 48.9.

The stock market remains on track for a lower opening this morning as tech (and particularly semiconductor names) face pressure this morning.

The major averages enter the final session of the week mostly lower, with the Nasdaq Composite (-4.4% week-to-date) and S&P 500 (-1.9% week-to-date) retreating amid the weakness in tech, while support from the broader market keeps the DJIA (+0.7% week-to-date) and S&P 500 Equal Weighted Index (+1.1% week-to-date) advancing.

The S&P 500 futures currently trade 22 points below fair value.

Equity indices in the Asia-Pacific region had a mostly lower finish to the week with Hong Kong's Hang Seng hitting a fresh 13-month low while markets in India were closed for a holiday. Japan's Tokyo CPI accelerated in June but remained below the Bank of Japan's 2.0% target for the fifth consecutive month. Japan's Prime Minister Takaichi indicated that her government plans to shift away from annual extra budgets in favor of annual bond issuance. Meanwhile, Finance Minister Katayama proposed a framework that would link spending to most predictable revenue streams like taxes, bond issuance, and spending cuts. The plan would include a 14-year, $2.3 trln, investment plan for AI and energy.

• In economic data:
  • Japan's June Tokyo CPI 1.7% yr/yr (prior 1.4%) and Tokyo Core CPI 1.6% yr/yr (expected 1.6%; prior 1.3%)
  • Singapore's May Industrial Production -0.7% m/m (expected 2.0%; last 6.2%); 13.0% yr/yr (expected 17.0%; last 16.5%)

---Equity Markets---

• Japan's Nikkei: -4.2% 
• Hong Kong's Hang Seng: -1.8% 
• China's Shanghai Composite: -2.3%
• India's Sensex: CLOSED 
• South Korea's Kospi: -5.8% 
• Australia's ASX All Ordinaries: +0.1%

Major European indices trade in the red. Manager Magazin reported that Volkswagen could cut up to 100,000 jobs as part of aggressive restructuring that would also include a spin-off of the passenger vehicle brand. Near-term consumer inflation expectations decelerated slightly to 3.5% from 3.9%, according to a survey from the European Central Bank.

• In economic data:
  • France's May jobseekers 3.116 mln (prior 3.100 mln)
  • Italy's June Business Confidence 88.4, as expected (prior 87.9) and Consumer Confidence 92.4 (expected 94.5; prior 93.4). May non-EU trade surplus EUR3.84 bln (prior surplus of EUR3.85 bln)

---Equity Markets---

• STOXX Europe 600: -1.3% 
• Germany's DAX: -1.5% 
• U.K.'s FTSE 100: -1.1% 
• France's CAC 40: -0.9% 
• Italy's FTSE MIB: -1.4% 
• Spain's IBEX 35: -0.7% 

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

Just released, the advance reading for May wholesale inventories saw an increase of 0.3%, from a prior increase of 0.5%.

Retail inventories showed an increase of 0.6%, from a prior increase of 0.7%.

The international goods trade balance contracted to -$105.8 billion, from a prior reding of -$82.4 billion.

Equity futures point to a lower opening as semiconductor stocks move sharply lower in the premarket.

The group faced choppy action yesterday following Micron's (MU 1,150.23, -63.33, -5.2%) blowout earnings release, but ended the session with solid gains. That strength was not evident at the index level, as heightened demand for memory caused several "magnificent seven" companies to raise prices, setting up another day of weakness across mega-cap tech.

This morning, chipmakers are giving back their gains after reports that OpenAI may delay its IPO to 2027 due to recent volatility across SpaceX (SPCX 150.93, -2.07, -1.4%) and other AI-related names. Additionally, Axios reports that the Trump administration has asked OpenAI to delay the release of its latest model due to security concerns.

Outside of the tech space, oil prices continue to retreat, and futures linked to the DJIA hold the narrowest losses, suggesting another day of rotation into the broader market could be in store.

In corporate news:

• ON Semiconductor (ON 101.76, -16.98, -14.3%) agreed to acquire Synaptics (SYNA 130.00, +4.38, +3.5%) in an all-stock deal worth $7 billion.
• Samsung (SSNLF) and SK Hynix (SKHY) are planning to announce hundreds of billions of dollars worth of new investments next week, according to Bloomberg.
• SpaceX (SPCX 150.93, -2.07, -1.4%) is aiming to introduce a new Starlink mobile service for U.S. consumers, according to Financial Times.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mostly lower finish to the week with Hong Kong's Hang Seng hitting a fresh 13-month low while markets in India were closed for a holiday. Japan's Nikkei: -4.2%, Hong Kong's Hang Seng: -1.8%, China's Shanghai Composite: -2.3%, India's Sensex: CLOSED, South Korea's Kospi: -5.8%, Australia's ASX All Ordinaries: +0.1%.

In news:

• Japan's Tokyo CPI accelerated in June but remained below the Bank of Japan's 2.0% target for the fifth consecutive month.
• Japan's Prime Minister Takaichi indicated that her government plans to shift away from annual extra budgets in favor of annual bond issuance.
• Meanwhile, Finance Minister Katayama proposed a framework that would link spending to most predictable revenue streams like taxes, bond issuance, and spending cuts. The plan would include a 14-year, $2.3 trln, investment plan for AI and energy.

In economic data:

• Japan's June Tokyo CPI 1.7% yr/yr (prior 1.4%) and Tokyo Core CPI 1.6% yr/yr (expected 1.6%; prior 1.3%)
• Singapore's May Industrial Production -0.7% m/m (expected 2.0%; last 6.2%); 13.0% yr/yr (expected 17.0%; last 16.5%)

Major European indices trade in the red. STOXX Europe 600: -0.9%, Germany's DAX: -1.2%, U.K.'s FTSE 100: -1.3%, France's CAC 40: -0.8%, Italy's FTSE MIB: -1.2%, Spain's IBEX 35: -0.4%.

In news:

• Manager Magazin reported that Volkswagen could cut up to 100,000 jobs as part of aggressive restructuring that would also include a spin-off of the passenger vehicle brand.
• Near-term consumer inflation expectations decelerated slightly to 3.5% from 3.9%, according to a survey from the European Central Bank.

In economic data:

• France's May jobseekers 3.116 mln (prior 3.100 mln)
• Italy's June Business Confidence 88.4, as expected (prior 87.9) and Consumer Confidence 92.4 (expected 94.5; prior 93.4). May non-EU trade surplus EUR3.84 bln (prior surplus of EUR3.85 bln)

[BRIEFING.COM] The stock market finished mixed today as a strong rally across memory and semiconductor stocks was offset by continued weakness in several mega-cap technology names, while broad strength across cyclical and defensive sectors kept the underlying tone constructive. The S&P 500 finished flat, the Nasdaq Composite (-0.5%) finished modestly lower, and the DJIA (+0.1%) eked out a gain after touching another all-time intraday high.

Micron (MU 1213.56, +165.05, +15.74%) was among the session's top performers after delivering a stellar beat-and-raise earnings report that reinforced exceptionally strong demand across the memory market. The results sparked broad gains among memory-related names and helped the PHLX Semiconductor Index finish 3.6% higher, though not before the group endured another volatile session that saw the index surrender an opening gain of more than 5% before recovering into the close.

However, the same memory-pricing dynamics that benefited Micron weighed on several of the market's largest technology companies. Apple (AAPL 275.15, -17.93, -6.12%) and Microsoft (MSFT 352.83, -12.63, -3.46%) were among the weakest Dow components after both companies announced price increases tied to rising memory costs, while Amazon (AMZN 227.01, -7.26, -3.10%) and Alphabet (GOOG 342.19, -2.85, -0.83%) also finished lower.

As a result, the information technology (-0.1%), consumer discretionary (-1.8%), and communication services (-1.0%) sectors all lagged despite the strength across semiconductor stocks. The Vanguard Mega Cap Growth ETF declined 1.0%.

Away from mega-cap technology, the market continued to broaden. Six S&P 500 sectors finished higher, reinforcing the recent rotation into other areas of the market rather than away from equities altogether.

The industrials sector (+2.2%) captured the widest gain, with Caterpillar (CAT 1056.83, +62.38, +6.27%) notching all-time highs and finishing as the best-performing Dow component amid another strong session for industrial machinery names.

The health care sector (+1.5%) also outperformed, led by Bio-Techne (TECH 70.67, +11.80, +20.03%), which surged after agreeing to be acquired by Merck KGaA (MKKGY 33.59, +1.74, +5.46%) for $73 per share in cash.

The materials sector (+1.4%) benefited from strength across fertilizer and metals producers, while the energy sector (+1.0%) rebounded alongside crude oil after yesterday's retreat.

The S&P 500 Equal Weight Index (+0.6%) outperformed its market-weighted counterpart once again.

Outside the S&P 500, the Russell 2000 (+0.7%) and S&P Mid Cap 400 (+0.9%) also finished higher.

Overall, today's session continued to reinforce the market's evolving leadership. While elevated volatility persists across mega-cap technology stocks, strength has steadily broadened beneath the surface, with the DJIA's year-to-date gain (+8.0%) now surpassing that of the S&P 500 (+7.5%) as investors continue rotating within the equity market rather than exiting it. The contrasting reactions to Micron's earnings also underscored how the AI trade is becoming increasingly nuanced, with surging memory demand benefiting suppliers while simultaneously creating cost pressures for some of the market's largest technology customers.

U.S. Treasuries of most tenors recorded their third consecutive day of gains while the long bond underperformed, ending with a slight loss. The 2-year note yield settled down two basis points to 4.12%, and the 10-year note yield settled down one basis point to 4.39%. 

• Russell 2000: +21.2% YTD
• S&P Mid Cap 400: +15.7% YTD
• Nasdaq Composite: +9.1% YTD
• DJIA: +9.0% YTD
• S&P 500: +7.5% YTD

Reviewing today's data:

• May Personal Income 0.7% (Briefing.com consensus 0.3%); Prior 0.0%, May Personal Spending 0.7% (Briefing.com consensus 0.3%); Prior was revised to 0.4% from 0.5%, May PCE Prices 0.4% (Briefing.com consensus 0.4%); Prior 0.4%, May PCE Prices - Core 0.3% (Briefing.com consensus 0.3%); Prior was revised to 0.3% from 0.2%
  • The key takeaway from the report is that, first, there weren't any headline shocks for the PCE price indexes. They were in line with expectations, allowing participants to assume that next month's readings will look better given the sharp decline in oil prices. Secondly, real PCE was up 0.3% month-over-month, demonstrating that spending was driven by increased demand and not just higher prices. This will be a nice input for Q2 GDP forecasts.
• Q1 GDP - Third Estimate 2.1% (Briefing.com consensus 1.6%); Prior 1.6%, Q1 GDP Deflator - Third Estimate 3.6% (Briefing.com consensus 3.5%); Prior 3.5%
  • The key takeaway from the report is that Q1 GDP was stronger than originally thought, due primarily to a downward revision to imports, which are a subtraction in GDP calculations.
• May Durable Orders -4.5% (Briefing.com consensus -3.2%); Prior was revised to 8.5% from 7.9%, May Durable Goods 0 ex transportation 1.3% (Briefing.com consensus 0.5%); Prior was revised to 1.4% from 1.1%
  • The key takeaway from the report is that there was a healthy pickup in business spending in May, evidenced by the 1.6% increase in new orders for nondefense capital goods excluding aircraft.
• Weekly Initial Claims 215K (Briefing.com consensus 225K); Prior was revised to 227K from 226K, Weekly Continuing Claims 1.821 mln; Prior was revised to 1.800 mln from 1.810 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.