[BRIEFING.COM] The major averages finished higher across the board today, with the S&P 500 (+0.4%), Nasdaq Composite (+0.6%), and DJIA (+0.3%) overcoming another bout of weakness across semiconductor stocks as encouraging inflation data and continued strength among several other mega-cap technology names supported the broader market. Investors also digested another slate of earnings reports, Fed commentary, and geopolitical developments.

Semiconductor stocks remained a notable source of weakness, though they recovered well off their session lows into the close. The PHLX Semiconductor Index finished down 2.1% after falling more than 4% earlier in the session. ASML (ASML 1815.27, +39.63, +2.23%) delivered a beat-and-raise earnings report before the open, but the stock and the broader semiconductor space reversed course after initially pointing toward another day of gains, though the afternoon saw a solid intraday recovery.

Memory names such as Micron (MU 904.28, -78.84, -8.02%), Sandisk (SNDK 1615.00, -142.82, -8.12%), and, outside the S&P 500, SK hynix Inc. (SKHY 176.46, -17.46, -9.00%) were among the group's biggest laggards.

The information technology sector (-0.1%) also rebounded sharply from its intraday lows, finishing just shy of unchanged as strength across several of its largest components helped offset semiconductor weakness. Microsoft (MSFT 395.63, +10.70, +2.78%) and Apple (AAPL 327.50, +12.64, +4.01%) were "Magnificent Seven" standouts, with Apple benefiting from a report from The Information that the company is exploring acquisitions to bolster its AI chip capabilities.

Alphabet (GOOG 370.21, +12.88, +3.60%) and Amazon (AMZN 254.96, +7.47, +3.02%) also posted solid gains, helping lift the communication services (+2.8%) and consumer discretionary (+1.4%) sectors. The Vanguard Mega Cap Growth ETF rose 1.0%, underscoring continued leadership across growth-oriented stocks outside of the semiconductor space.

The financials sector (+0.7%) was another relative outperformer following another busy round of corporate news. BlackRock (BLK 1093.40, +67.96, +6.63%) finished sharply higher after earnings, while Morgan Stanley (MS 228.42, +0.75, +0.33%) ended flattish despite also topping expectations.

Elsewhere, PayPal (PYPL 55.52, +8.15, +17.20%) was the best-performing S&P 500 component after Reuters reported that Stripe and Advert International have offered to acquire the company for approximately $53 billion.

The industrials sector (-0.2%) recovered alongside semiconductor stocks during the afternoon, though Pentair (PNR 64.33, -11.35, -15.00%) remained a notable drag after sharply lowering its second-quarter and full-year guidance, citing weaker pool equipment demand driven by a more pronounced inventory realignment and deteriorating business conditions.

The energy sector (-0.8%) gave back a portion of its gains from earlier in the week as WTI crude oil futures settled today's session $0.22 higher (+0.3%) at $79.62 per barrel following a relatively quiet day of geopolitical headlines involving the U.S. and Iran. Oil prices moved higher after the settlement, however, after U.S. Central Command announced a second wave of strikes against Iran.

The utilities sector (-1.0%) was another laggard as investors continued rotating away from more defensive areas of the market in favor of growth-oriented stocks.

On the policy front, another favorable inflation reading reinforced yesterday's encouraging CPI report, as the June PPI fell 0.3% month-over-month (Briefing.com consensus: 0.1%). The report further reduced the market's expectations for a near-term rate hike, with the CME FedWatch Tool's implied probability of the FOMC leaving rates unchanged at its September meeting rising to 51.9% from 41.9% yesterday. New York Fed President John Williams (FOMC voting member) said there are encouraging reasons to believe inflation has peaked, while Fed Governor Lisa Cook (FOMC voting member) reiterated that she would support tighter policy if inflation fails to show further signs of cooling.

Despite another volatile session for semiconductor stocks, today's trading demonstrated that investors remained willing to reward other growth-oriented areas of the market when the inflation backdrop improved. While chipmakers remained an important source of day-to-day volatility, strength across the broader mega-cap technology complex ultimately proved sufficient to lift the major averages higher.

U.S. Treasuries had a solid showing today, primarily shorter-dated securities, which were bolstered by a market-friendly PPI reading this morning that kept rate-hike concerns for the July FOMC meeting in check. The 2-year note yield settled down six basis points to 4.13%, and the 10-year note yield settled down four basis points to 4.55%. 

• Russell 2000: +19.9% YTD
• S&P Mid Cap 400: +14.3% YTD
• Nasdaq Composite: +13.0% YTD
• S&P 500: +10.6% YTD
• DJIA: +9.6% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -2.7%: Prior -2.2%
• June PPI -0.3% (Briefing.com consensus 0.1%); Prior was revised to 0.6% from 1.1%, June Core PPI 0.2% (Briefing.com consensus 0.4%); Prior was revised to 0.1% from 0.4%
  • The key takeaway from the report is that it is an encouraging monthly marker of how the inflation data can improve with a decline in energy prices; however, it also reveals on a year-over-year basis that wholesalers are still dealing with high prices. Net-net, this report conveys the need for more improvement in bringing down wholesale prices, but it was better-than-feared when also factoring in the downward revisions to the prior month.
• July Empire State Manufacturing 15.6 (Briefing.com consensus 8.5); Prior 5.7

[BRIEFING.COM] The major averages continue to hold modest gains with just half an hour left in today's action.

Earnings reports will begin to broaden out past the financials sector (+0.7%), with United Airlines (UAL 120.20, -0.15, -0.12%) set to report after the close while GE Aerospace (GE 359.34, +5.61, +1.59%) and UnitedHealth (UNH 418.06, -7.14, -1.68%) are among tomorrow morning's reporters.

[BRIEFING.COM] The S&P 500 (+0.2%), Nasdaq Composite (+0.3%), and DJIA (+0.2%) are back in modestly positive territory as the market enters the final hour of the session.

Crude oil futures settled today's session $0.22 higher (+0.3%) at $79.62 per barrel amid a relatively quiet day of headlines surrounding the U.S. and Iran. The energy sector (-1.3%) is sharply lower but remains the best-performing S&P 500 sector this week after Monday's surge.

[BRIEFING.COM] The broader market remains relatively steady after the Fed released its July Beige Book this afternoon, the S&P 500 (+0.40%) in second place up 30 points. The report showed economic activity expanded at a slight to moderate pace across eleven of twelve Federal Reserve Districts, with growth broadly similar to the prior reporting period. Consumer spending edged higher, though elevated prices, particularly for fuel, continued to weigh on discretionary purchases as some households traded down to more affordable options. Tourism improved, while auto sales remained largely unchanged as consumers held onto vehicles longer and increased repair spending. Manufacturing activity strengthened modestly, supported by demand from data centers, machinery, and defense sectors, while construction activity benefited from continued data center development. Financial conditions remained stable, with modest gains in commercial and consumer lending, though consumer loan quality weakened slightly. Business contacts remained cautiously optimistic, but uncertainty around fuel costs, tariffs, and geopolitical risks continued to weigh on the outlook.

Overall, economic expectations remained cautiously positive, with businesses generally expecting continued expansion in the coming months despite persistent uncertainty around inflation, costs, and consumer demand.

• Employment: Employment increased modestly overall, with five Districts reporting gains and seven seeing little to no change. Hiring improved across manufacturing, construction, and retail, though businesses continued to report difficulty finding skilled workers, particularly technicians and tradespeople. Wage growth remained modest to moderate, with some increases tied to competition for specialized labor. Several Districts also noted greater use of AI in hiring processes and efforts to improve worker productivity.
• Prices: Prices continued to rise at a moderate pace, with nine Districts reporting moderate increases and two reporting robust growth. Input costs remained elevated across services, construction, and manufacturing, driven by higher energy, transportation, and raw material expenses, with some businesses attributing cost pressures to tariffs and Middle East tensions. While consumer prices continued to climb, some firms reported increased price sensitivity among customers and tighter margins as selling prices failed to fully offset rising costs.

Currently, the yield on the benchmark 10-year Treasury note is down about four basis points following the Beige Book release to 4.550%.

[BRIEFING.COM] The Nasdaq Composite (+0.59%) is in first place on Wednesday afternoon up about 155 points.

Gold futures settled $17.90 lower (-0.4%) at $4,051.80/oz, as investors took profits following recent gains, while weighing softer inflation data against renewed concerns about energy-driven price pressures. The move reflected a balancing act between expectations for a more accommodative Fed policy and lingering geopolitical risks that continue to support demand for safe-haven assets.

Meanwhile, the U.S. Dollar Index is down -0.5% to $100.40.

[BRIEFING.COM] The Dow Jones Industrial Average (+0.01%) is up less than 5 points this afternoon, in last place among the major averages.

A look inside the DJIA shows that Apple (AAPL 326.69, +11.83, +3.76%), Alphabet (GOOGL 370.66, +11.15, +3.10%), and Amazon (AMZN 254.84, +7.35, +2.97%) are some of today's top gain getters.

Meanwhile, Cisco (CSCO 111.70, -5.39, -4.60%) is underperforming.

The DJIA is now -0.24% lower week-to-date.

[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (+0.1%), and DJIA (+0.1%) now oscillate around their unchanged levels just after midday as another wave of selling across semiconductor stocks weighs against continued strength in several other mega-cap technology names. A softer-than-expected June PPI (-0.3%; Briefing.com consensus: 0.1%) and a relatively stable day for oil prices have provided some support, though the market's recent back-and-forth across chipmakers continues to drive price action.

Semiconductor stocks remain the primary source of weakness, with the PHLX Semiconductor Index down 4.2% after yesterday's strong rebound. Although ASML's (ASML 1759.38, -16.26, -0.92%) beat-and-raise earnings report initially pointed to another strong session for the group, both ASML and the broader semiconductor space have since reversed course. Memory names such as Micron (MU 889.20, -93.92, -9.55%), Sandisk (SNDK 1539.59, -218.23, -12.41%), and, outside the S&P 500, SK hynix Inc. (SKHY 173.03, -20.89, -10.77%) are among the biggest laggards.

The information technology sector (-1.4%) is the weakest major sector, though its losses have been moderated by continued strength across several of its largest components. Microsoft (MSFT 394.69, +9.76, +2.54%) and (AAPL 327.75, +12.89, +4.09%) are "Magnificent Seven" standouts, while gains in Alphabet (GOOG 370.97, +13.64, +3.82%) and Amazon (AMZN 255.36, +7.87, +3.18%) continue to support the communication services (+2.8%) and consumer discretionary (+1.5%) sectors, respectively.

The Vanguard Mega Cap Growth ETF is up 0.3%, highlighting continued strength across growth-oriented stocks outside of the semiconductor space.

The financials sector (+0.9%) is another relative standout following another busy round of corporate news. BlackRock (BLK 1102.20, +76.76, +7.49%) trades sharply higher after earnings, while Morgan Stanley (MS 227.38, -0.29, -0.13%) now moves slightly lower despite also topping expectations.

Elsewhere, PayPal (PYPL 55.16, +7.78, +16.43%) is the best-performing S&P 500 component after Reuters reported that Stripe and Advert International have offered to acquire the company for approximately $53 billion.

Outside of technology, participation remains mixed. The industrials sector (-1.2%) is among today's laggards as semiconductor-related electrical equipment names remain under pressure, while Pentair (PNR 63.48, -12.20, -16.13%) plunges after sharply lowering its second-quarter and full-year guidance, citing weaker pool equipment demand stemming from a more pronounced inventory realignment and deteriorating business conditions.

The materials sector (-0.9%) is another laggard, pressured by weakness across chemical producers.

Meanwhile, the energy sector (-1.4%) is giving back a portion of its gains from earlier in the week as crude oil prices remain choppy amid a relatively quiet day on the geopolitical front.

Despite another favorable inflation reading and easing oil prices, today's session continues to revolve around the semiconductor trade. Strength across several mega-cap technology stocks has helped cushion the broader market, though persistent weakness in chipmakers has once again proven enough to dictate the direction of the major averages.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -2.7%: Prior -2.2%
• June PPI -0.3% (Briefing.com consensus 0.1%); Prior was revised to 0.6% from 1.1%, June Core PPI 0.2% (Briefing.com consensus 0.4%); Prior was revised to 0.1% from 0.4%
  • The key takeaway from the report is that it is an encouraging monthly marker of how the inflation data can improve with a decline in energy prices; however, it also reveals on a year-over-year basis that wholesalers are still dealing with high prices. Net-net, this report conveys the need for more improvement in bringing down wholesale prices, but it was better-than-feared when also factoring in the downward revisions to the prior month.
• July Empire State Manufacturing 15.6 (Briefing.com consensus 8.5); Prior 5.7

[BRIEFING.COM] The S&P 500 (-0.1%), Nasdaq Composite (-0.1%), and DJIA (-0.1%) are now in modestly negative territory as semiconductor names continue to move lower.

The PHLX Semiconductor Index is now down 4.9%, which pushes the information technology sector (-1.6%) to the bottom of today's leaderboard. Memory names continue to struggle, with Western Digital (WDC 498.54, -64.78, -11.50%) sharply lower after reports that the company has reopened Kioxia merger talks.

[BRIEFING.COM] The major averages continue to trade just above their baselines at midday.

Novo Nordisk A/S (NVO 50.67, +1.60, +3.26%) holds a solid gain after The Wall Street Journal reported that its weight loss drug is moving ahead of Eli Lilly's (LLY 1145.20, -7.34, -0.64%). Additionally, the company confirmed that the European Commission has issued approval of Wegovy pill as the first oral GLP-1 for weight management in the EU.

In other health care news, Johnson & Johnson (JNJ 250.54, -3.31, -1.30%) moves lower despite reporting solid Q2 upside for both EPS and revenue while raising FY26 EPS and revenue guidance by more than the Q2 beat.

Meanwhile, Elevance Health (ELV 390.19, -36.60, -8.58%) moves sharply lower despite a beat-and-raise earnings report of its own.

[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.4%), and DJIA (+0.4%) are holding on to modest gains just before midday.

Recent choppiness across semiconductor stocks continues to be a factor, with the PHLX Semiconductor Index down 2.8% after a nice gain yesterday. Memory names such as Micron (MU 907.80, -75.32, -7.66%) and Sandisk (SNDK 1556.40, -201.42, -11.46%) are particularly weak, while outside of the S&P 500, SK hynix Inc. (SKHY 175.92, -18.00, -9.28%) moves lower following yesterday's sharp rebound.

The information technology sector (-0.7%) is a laggard, though the losses are somewhat offset by a strong showing from other mega-cap tech names, including Microsoft (MSFT 395.82, +10.89, +2.83%) and Apple (AAPL 325.96, +11.10, +3.53%).

Similar gains in Alphabet (GOOG 370.27, +12.94, +3.62%) and Amazon (AMZN 255.96, +8.47, +3.42%) help the communication services (+2.7%) and consumer discretionary (+1.9%) sectors outperform.

A total of six S&P 500 sectors trade higher, with another favorable inflation reading in the June PPI report (-0.3%; Briefing.com consensus 0.1%) and a retreat in oil prices adding support.

So far, today's action reflects the back-and-forth trend between semiconductors and the broader market, with strength across other mega-cap tech names helping offset another slide in chipmakers.

[BRIEFING.COM] The major averages remain little changed from previous levels.

The industrials sector (-0.2%) is modestly lower, weighed down by Pentair (PNR 63.19, -12.49, -16.50%) after the company sharply lowered its Q2 and FY26 guidance, citing a decline in Pool sales largely attributed to a more pronounced inventory realignment and worsening business conditions. Additionally, the company's CFO resigned after just four months in the role.

RBC Capital Markets downgraded the stock to Sector Perform from Outperform, with a target price of $74.

[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (+0.5%), and DJIA (+0.5%) are maintaining their modest early gains.

The financials sector (+0.8%) holds a solid gain this morning, with several notable corporate news items.

PayPal (PYPL 55.37, +8.00, +16.89%) is the best-performing S&P 500 stock so far after Reuters reported that Stripe and Advert International offered to acquire the company for $53 billion.

Meanwhile, Morgan Stanley (MS 230.62, +2.95, +1.30%) is up solidly after delivering a clear Q2 beat, with EPS of $3.46 that topped the FactSet consensus by $0.53 and revenue of $21.35 billion that exceeded expectations by $1.67 billion. The report was strong across both sides of the model, with Institutional Securities revenue up about 44% year-over-year to $11.04 billion, Investment Banking revenue up 58% to $2.44 billion, and Wealth Management revenue up 14.1% to $8.86 billion. The quarter combined high-beta upside from Institutional Securities with durable wealth asset gathering, showing that the firm can participate in a capital-markets recovery while still compounding fee-based client assets.

[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.5%), and DJIA (+0.4%) are modestly higher this morning on relatively broad strength.

Nine S&P 500 sectors hold gains, with the consumer discretionary sector (+1.1%) leading the advance with support from its largest components, Amazon (AMZN 251.91, +4.42, +1.78%) and Tesla (TSLA 398.17, +1.99, +0.50%).

Alphabet (GOOG 362.26, +4.93, +1.38%) helps the communication services sector (+0.8%) move higher amid a solid early showing for "magnificent seven" names.

Within the information technology sector (+0.1%), Apple (AAPL 320.73, +5.87, +1.86%) and Microsoft (MSFT 390.99, +6.06, +1.57%) are helping offset some weakness across semiconductor stocks, which are facing some modest profit-taking after a strong showing yesterday. The PHLX Semiconductor Index is down 0.5%.

The energy sector (-0.3%) is this morning's laggard, despite WTI crude oil creeping back above the $80 per barrel mark, while the industrials sector (-0.1%) also holds a modest gain.

The stock market is now on track for a higher open as chipmaker names look to extend yesterday's bounce after another encouraging inflation reading.

Total PPI decreased 0.3% month-over-month in June (Briefing.com consensus: 0.1%) following a downwardly revised 0.6% increase (from 1.1%) in May. The June drop was driven by a 1.4% decline in prices for final demand goods, which was paced by a 6.4% decline in prices for final demand energy. Core PPI, which excludes food and energy, was up 0.2% month-over-month (Briefing.com consensus: 0.4%) following a downwardly revised 0.1% increase (from 0.4%) in May.

On a year-over-year basis, total PPI was up 5.5% versus 6.0% in May, and core PPI was up 4.7% versus 4.6% in May.

The key takeaway from the report is that it is an encouraging monthly marker of how the inflation data can improve with a decline in energy prices; however, it also reveals on a year-over-year basis that wholesalers are still dealing with high prices. Net-net, this report conveys the need for more improvement in bringing down wholesale prices, but it was better-than-feared when also factoring in the downward revisions to the prior month.

The S&P 500 futures currently trade 16 points above fair value. 

Equity indices in the Asia-Pacific region finished mostly higher Tuesday, with South Korea's Kospi continuing its wild swings on the volatility of its leading semiconductor components, Samsung Electronics and SK Hynix. Today's move featured upside volatility as the Kospi surged 6.2%. Notably, South Korean President Lee remarked that the stock market is "quite unstable." That move and that comment precede a BOK rate decision on Thursday that is expected to produce a rate hike to help quell inflation. Elsewhere, China had a data dump that featured stronger-than-expected retail sales and industrial production for June.

• In economic data:
  • China's June Retail Sales 1.0% yr/yr (-0.1% expected; prior -0.6%); June Industrial Production 5.3% yr/yr (4.7% expected; prior 4.5%); June Fixed Asset Investment -5.7% yr/yr (-5.0% expected; prior -4.1%); Q2 GDP 0.9% qtr/qtr (0.9% expected; prior 1.3%) and 4.7% year-to-date (4.5% expected; prior 5.0%); June House Prices -3.3% yr/yr (prior -3.5%); June Unemployment Rate 5.0% (5.1% expected; prior 5.1%); June New Loans CNY1610.0 bln (CNY1950.0 bln expected; prior CNY520.0 bln)
  • Japan's July Reuters Tankan Index 13 (prior 13); May Core Machinery Orders -12.4% m/m (-4.2% expected; prior 8.7%) and -1.9% yr/yr (12.9% expected; prior 15.6%); May Tertiary Industry Activity Index -1.4 (prior -11.1)
  • South Korea's June Imports 30.0% yr/yr (30.1% expected; prior 20.7%) and Exports 70.7% yr/yr (70.9% expected; prior 53.4%); June Unemployment Rate 2.7% (prior 2.8%)

---Equity Markets---

• Japan's Nikkei: +1.5%
• Hong Kong's Hang Seng: +1.4%
• China's Shanghai Composite: -0.3%
• India's Sensex: +0.2%
• South Korea's Kospi: +6.2%
• Australia's ASX All Ordinaries: +0.4%

Major European indices are mostly lower, taking stock of increased hostilities between the U.S. and Iran that have led to the restoration of the U.S. blockade of Iranian vessels and supply worries that have pushed up oil prices. Brent crude futures are up 1.1% to $85.67/bbl, feeding inflation worries that are driving up sovereign bond yields that have acted as a headwind for stocks. Conversely, ASML (ASML) made it clear with its Q3 and full-year guidance that AI and the demand for semiconductors are acting as a big tailwind for its business.

• In economic data:
  • Eurozone's May Industrial Production -0.2% m/m (0.3% expected; prior 0.3%) and -1.2% yr/yr (-0.5% expected; prior 0.4%)
  • Spain's June CPI 0.6% m/m (0.6% expected; prior 0.1%) and 3.2% yr/yr (3.2% expected; prior 3.2%) and core CPI 2.9% yr/yr (2.9% expected; prior 3.0%)

---Equity Markets---

• STOXX Europe 600: +0.2%
• Germany's DAX: -0.5%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: -0.4%
• Spain's IBEX 35: -0.5%

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

Just released, the Producer Price Index for final demand decreased 0.3% month-over-month in June (Briefing.com consensus: 0.1%) following a downwardly revised 0.6% increase (from 1.1%) in May.

Core PPI, which excludes food and energy, rose 0.2% month-over-month (Briefing.com consensus: 0.4%) following a downwardly revised 0.1% increase (from 0.4%) in May.

The Empire State Manufacturing Index expanded to 15.6 in July (Briefing.com consensus 8.5), up from the previous reading of 5.7.

Equity futures point to a slightly higher opening this morning after stocks finished yesterday's session mostly higher, with solid gains across semiconductor names and lighter-than-expected inflation data helping the major averages take back a chunk of Monday's weakness.

Semiconductor stocks are primed for another solid opening following a solid earnings report from ASML (ASML 1,841.48, +65.84, +3.7%), with the company announcing AI-driven EUV capacity expansions.

The market will receive another inflation reading in the form of the June PPI (Briefing.com consensus 0.1%). Yesterday's CPI reading (-0.4%; Briefing.com consensus: -0.1%) helped offset another surge in oil prices as hostilities between the U.S. and Iran continue to ramp up.

Elsewhere on the data front, the MBA Mortgage Applications Index for the week ended July 11 decreased 2.7%, from a prior 2.2% decrease.

In corporate news:

• Intel (INTC 110.33, +2.57, +2.5%) is using an ASML (ASML 1,841.48, +65.84, +3.7%) tool to produce laptop chips, according to Reuters.
• Morgan Stanley (MS, 231.70, +4.03, +1.8%) beat EPS expectations by $0.53 and beat revenue expectations.
• PayPal (PYPL 56.23, +8.87, +18.7%) is sharply higher after Stripe & Advent International offered to acquire the company for $53 billion, according to Reuters.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region finished mostly higher Tuesday, with South Korea's Kospi continuing its wild swings on the volatility of its leading semiconductor components, Samsung Electronics and SK Hynix. Japan's Nikkei: +1.5%, Hong Kong's Hang Seng: +1.4%, China's Shanghai Composite: -0.3%, India's Sensex: +0.2%, South Korea's Kospi: +6.2%, Australia's ASX All Ordinaries: +0.4%.

In news:

• Notably, South Korean President Lee remarked that the stock market is "quite unstable."
• That move and that comment precede a BOK rate decision on Thursday that is expected to produce a rate hike to help quell inflation.
• Elsewhere, China had a data dump that featured stronger-than-expected retail sales and industrial production for June.

In economic data:

• China's June Retail Sales 1.0% yr/yr (-0.1% expected; prior -0.6%); June Industrial Production 5.3% yr/yr (4.7% expected; prior 4.5%); June Fixed Asset Investment -5.7% yr/yr (-5.0% expected; prior -4.1%); Q2 GDP 0.9% qtr/qtr (0.9% expected; prior 1.3%) and 4.7% year-to-date (4.5% expected; prior 5.0%); June House Prices -3.3% yr/yr (prior -3.5%); June Unemployment Rate 5.0% (5.1% expected; prior 5.1%); June New Loans CNY1610.0 bln (CNY1950.0 bln expected; prior CNY520.0 bln)
• Japan's July Reuters Tankan Index 13 (prior 13); May Core Machinery Orders -12.4% m/m (-4.2% expected; prior 8.7%) and -1.9% yr/yr (12.9% expected; prior 15.6%); May Tertiary Industry Activity Index -1.4 (prior -11.1)
• South Korea's June Imports 30.0% yr/yr (30.1% expected; prior 20.7%) and Exports 70.7% yr/yr (70.9% expected; prior 53.4%); June Unemployment Rate 2.7% (prior 2.8%)

Major European indices are mostly lower, taking stock of increased hostilities between the U.S. and Iran that have led to the restoration of the U.S. blockade of Iranian vessels and supply worries that have pushed up oil prices. STOXX Europe 600: -0.1%, Germany's DAX: -0.8%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.3%, Italy's FTSE MIB: -0.6%, Spain's IBEX 35: -0.7%.

In news:

• Brent crude futures are up 1.1% to $85.67/bbl, feeding inflation worries that are driving up sovereign bond yields that have acted as a headwind for stocks.
• Conversely, ASML (ASML) made it clear with its Q3 and full-year guidance that AI and the demand for semiconductors are acting as a big tailwind for its business.

In economic data:

• Eurozone's May Industrial Production -0.2% m/m (0.3% expected; prior 0.3%) and -1.2% yr/yr (-0.5% expected; prior 0.4%)
• Spain's June CPI 0.6% m/m (0.6% expected; prior 0.1%) and 3.2% yr/yr (3.2% expected; prior 3.2%) and core CPI 2.9% yr/yr (2.9% expected; prior 3.0%)

[BRIEFING.COM] The stock market absorbed a crowded slate of developments today, allowing the S&P 500 (+0.4%) and Nasdaq Composite (+0.9%) to recover some of yesterday's losses while the DJIA finished flat. As in the previous session, swings in semiconductor stocks and crude oil remained central to the market's direction, while investors also digested a softer inflation report, Fed commentary, and earnings from several major banks.

Stocks opened to relatively broad gains following the release of the June CPI report, which showed headline deflation (-0.4%; Briefing.com consensus: -0.2%) and a flat core CPI reading (Briefing.com consensus: +0.2%), slowing the year-over-year CPI rate to 3.5% from 4.2% and the core rate to 2.6% from 2.9%. The release had a tangible impact on the market's implied expectations of the Fed's policy path, with CME FedWatch now assigning an 83.4% probability to the FOMC leaving rates unchanged at the July meeting, up from 58.3% yesterday. However, the FedWatch tool still assigns a greater than 50% probability (56.5%) to a rate hike at the September meeting.

Treasury yields moved lower in response to the release, which was a welcome sight for a market that faced another surge in energy prices today. WTI crude oil surged past the $80 per barrel mark this morning after President Trump formally notified Congress that the U.S. is at war with Iran. President Trump announced just before midday that the U.S. naval blockade would apply only to ships departing Iranian ports, which briefly sent oil lower, though it steadily rose throughout the afternoon. Crude oil futures settled today's session $0.98 higher (+1.3%) at $79.40 per barrel.

Additionally, the improved rate backdrop helped support gains across mega-cap technology stocks, which were largely the driver of today's index-level gains. The top-weighted information technology sector (+1.3%) finished with the widest gain as investors stepped in to buy yesterday's dip across semiconductor stocks, sending the PHLX Semiconductor Index 2.5% higher. NVIDIA (NVDA 211.81, +8.28, +4.07%) was a "Magnificent Seven" standout, while memory names rebounded alongside another sharp gain in SK hynix Inc.'s (SKHY 194.16, +41.81, +27.44%) ADRs. Bloomberg reported that the premium of the ADRs over the company's Korean-listed shares widened to nearly 50% as options on the ADRs began trading in the U.S.

Strength across semiconductor names helped offset a massive slide in IBM (IBM 217.07, -73.16, -25.21%) after the company issued disappointing Q2 guidance that fell short of expectations on both EPS and revenue. Commentary around temporary customer spending shifts gave a boost to cybersecurity stocks, helping CrowdStrike (CRWD 210.73, +22.82, +12.14%) finish as the best-performing S&P 500 component.

Goldman Sachs (GS 1140.00, +94.09, +9.00%) finished with the second-widest gain in the S&P 500, which also helped offset IBM's weakness in the DJIA. The company delivered perhaps the strongest earnings beat among this morning's slate of major bank reports. JPMorgan Chase (JPM 342.89, +8.36, +2.50%) and Bank of America (BAC 60.62, +1.12, +1.88%) also moved higher after earnings, while Citigroup (C 133.30, -7.41, -5.27%) and Wells Fargo (WFC 85.52, -2.14, -2.45%) moved lower despite also topping expectations, limiting the financials sector's (+0.2%) gain.

Elsewhere, the communication services sector (+1.1%) was an outperformer, supported by a solid gain in Alphabet (GOOG 357.33, +6.66, +1.90%) after the company broke ground on its largest solar and battery storage project to date to help power data centers.

The Vanguard Mega Cap Growth ETF finished 1.0% higher, contributing to the outperformance of the market-weighted S&P 500 (+0.4%) over the S&P 500 Equal Weighted Index (-0.4%).

Meanwhile, the defensive health care (-1.9%) and consumer staples (-1.4%) sectors were the biggest laggards as investors rotated back into more growth-oriented pockets of the market.

Outside the S&P 500, the Russell 2000 (+0.4%) and S&P Mid Cap 400 (+0.5%) captured similar gains to the S&P 500.

Despite a crowded slate of earnings, inflation data, Fed commentary, and geopolitical developments, today's market action remained heavily influenced by the familiar back-and-forth across semiconductor stocks and oil prices. Softer-than-expected inflation helped investors look past another surge in crude oil, making it easier for growth-oriented technology stocks to reclaim leadership and the major averages to recover a portion of yesterday's losses.

U.S. Treasuries rebounded from two days of losses on Wednesday with relative strength in shorter tenors pressuring their yields from highest settlement levels of the year while longer tenors lagged but still ended in positive territory. The 2-year note yield settled down seven basis points to 4.19%, and the 10-year note yield settled down two basis points to 4.59%.

• Russell 2000: +19.5% YTD
• S&P Mid Cap 400: +14.3% YTD
• Nasdaq Composite: +12.3%
• S&P 500: +10.2% YTD
• DJIA: +9.3% YTD

Reviewing today's data:

• June NFIB Small Business Optimism 97.4 (Briefing.com consensus 95.6); Prior 95.3
• June CPI -0.4% (Briefing.com consensus -0.1%); Prior 0.5%, June Core CPI 0.0% (Briefing.com consensus 0.2%); Prior 0.2%
  • The key takeaway from the report is the softening in core inflation and the added softening in super core inflation, which excludes food, energy, and shelter. That component was up just 2.1% year-over-year. Inflation has not been slayed, but this report should be enough to keep the FOMC on hold at its July 28-29 meeting.