[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (-0.2%), and DJIA (-0.1%) continue to drift just below their baselines.

Strength at the sector level has somewhat eroded, leaving just the communication services (+1.2%), financials (+0.7%), and utilities (+0.2%) sectors in positive territory. However, the major averages are little changed from previous levels as losses have narrowed across some of the market's weightiest sectors. The information technology (-0.3%) and consumer discretionary (-0.6%) sectors are both well off their session lows, which coincides with improvements across mega-cap names. 

The Vanguard Mega Cap growth ETF (-0.1%) now sits just below its baseline after holding a loss that exceeded 0.5%.

[BRIEFING.COM] The major averages are little changed from previous values at midday.

Peloton (PTON 5.33, +0.15, +2.90%) holds a nice gain after announcing a global partnership with Spotify (SPOT 509.26, -8.74, -1.69%) to bring its premier fitness and wellness content to hundreds of millions of Spotify Premium subscribers as part of Spotify's new fitness category.

Meanwhile, Arm Holdings plc (ARM 214.26, -20.56, -8.75%) trades sharply lower, facing some profit-taking after an impressive rally that coincided with INTC's earnings last week.

[BRIEFING.COM] The stock market is off to a subdued start to the week as momentum fades in semiconductors and mega-cap names that drove last week's record highs. The S&P 500 (-0.2%), Nasdaq Composite (-0.4%), and DJIA (-0.3%) are modestly lower, though select pockets of strength are helping limit declines.

The PHLX Semiconductor Index is down 2.0% after last week's strong run, weighing on the information technology sector (-0.6%). Within the group, memory names like Micron (MU 519.51, +22.79, +4.6%) are outperforming, while Intel (INTC 83.36, +0.82, +1.0%) continues to edge higher post-earnings.

Tesla (TSLA 364.28, -12.02, -3.2%) remains a notable laggard following last week's earnings report, keeping the consumer discretionary sector (-1.2%) under pressure. In contrast, Alphabet (GOOG 348.59, +6.27, +1.8%) is pushing to fresh record highs, lifting communication services (+1.3%) to the top of the sector leaderboard.

Overall, the Vanguard Mega Cap Growth ETF is down 0.5%.

Elsewhere, sector moves are mixed, with gains and losses limited to 0.7% or narrower.

Outside of the S&P 500, the Russell 2000 (+0.1%) and S&P Mid Cap 400 (-0.1%) are little changed.

[BRIEFING.COM] The S&P 500 (-0.2%), Nasdaq Composite (-0.3%), and DJIA (-0.1%) remain slightly lower, little changed from previous values.

On the earnings front, Verizon (VZ 47.70, +1.32, +2.84%)  is nicely higher after reporting its Q1 results this morning. The telecom giant delivered a solid EPS beat, while revenue increased 2.9% year-over-year to $34.40 billion, missing expectations. However, Verizon raised its FY26 EPS guidance above expectations to $4.95-4.99, lifted its postpaid phone net add outlook to the upper half of its prior range, and showed improving subscriber trends, which appears to be driving the positive reaction.

Meanwhile, Domino's Pizza (DPZ 333.28, -34.55, -9.39%) is among the worst-performing S&P 500 name after reporting mixed Q1 results, with shares under pressure following a second consecutive EPS miss and softer-than-expected same-store sales trends. Revenue increased 3.5% year-over-year to $1.15 billion, in-line with Street estimates. DPZ increased its share repurchase authorization by $1 billion, but that does not seem to be helping the stock much.

[BRIEFING.COM] The major averages sit modestly lower as mixed strength in the broader market fails to offset early mega-cap and tech weakness.

Tesla (TSLA 366.37, -9.93, -2.64%) is a notable laggard, extending losses following last week's earnings report, where the company topped estimates but signaled a significant increase in capital expenditures.

Meanwhile, Intel (INTC 85.53, +2.99, +3.62%) continues to soar after better-than-expected earnings results of its own last week, remaining one of the top-performing S&P 500 components today following a 23.6% rally on Friday.

[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (-0.2%), and DJIA (+0.1%) are mixed shortly after the open as mega-cap and tech names face some modest selling interest after Friday's rally, while the broader market is mixed.

Semiconductor stocks are off to a lower start following an impressive run, with the PHLX Semiconductor Index down 1.1%. The early weakness weighs on the information technology sector (-0.3%), while a 0.6% slide in the Vanguard Mega Cap Growth ETF has the consumer discretionary sector (-1.0%) trading even lower.

Elsewhere in the sector, Domino's Pizza (DPZ 332.31, -35.52, -9.66%) moves sharply lower after missing earnings estimates.

Meanwhile, the communication services sector (+0.6%) trades higher as its mega-cap components, Alphabet (GOOG 346.25, +3.93, +1.15%) and Meta Platforms (META 676.42, +1.39, +0.21%) hold modest gains, while Verizon (VZ 48.25, +1.87, +4.03%) moves higher after beating EPS expectations.

Elsewhere, the energy sector (+1.0%) holds the widest gain this morning as stalled talks between the U.S. and Iran send oil prices higher. WTI crude is currently up $1.89 (+2.0%) to $96.29 per barrel.

The stock market is now on track for a slightly lower opening this morning.

Microsoft (MSFT 416.19, -8.43, -2.0%) is lower in the premarket after announcing an amended agreement with OpenAI.

Microsoft remains OpenAI's primary cloud partner, and OpenAI products will ship first on Azure, unless Microsoft cannot or chooses not to support the necessary capabilities. OpenAI can now serve all its products to customers across any cloud provider.

Microsoft will continue to have a license to OpenAI IP for models and products through 2032, but the license will now be non-exclusive. Microsoft will no longer pay a revenue share to OpenAI.

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

Equity indices in the Asia-Pacific region began the week on a mostly higher note with Japan's Nikkei (+1.4%) and South Korea's Kospi (+2.2%) reaching fresh records. There was some encouragement from news that Iran presented a proposal to restore traffic through the Strait of Hormuz, but it is unclear if the U.S. will accept the offer. South China Morning Post reported that the Chinese government has developed a cheaper all-iron battery for renewable energy storage. Japan's Prime Minister Takaichi said that Japan has secured a stable supply of oil into next year. The Bank of Japan will release its latest policy statement overnight, but a rate hike is not expected at this time.

• In economic data:
  • China's March Industrial Profit 15.5% YTD (last 15.2%)
  • Japan's February Leading Index 113.3 (expected 112.4; last 112.0) and Coincident Indicator -1.8% m/m (expected -1.6%; last 3.4%)
  • Singapore's March Industrial Production 4.7% m/m (last -1.2%); 10.1% yr/yr (last 3.3%)

---Equity Markets---

• Japan's Nikkei: +1.4%
• Hong Kong's Hang Seng: -0.2%
• China's Shanghai Composite: +0.2%
• India's Sensex: +0.8%
• South Korea's Kospi: +2.2%
• Australia's ASX All Ordinaries: -0.2%

Major European indices are starting the week on a higher note with some encouragement from indications that U.S.-Iran negotiations are continuing despite the lack of an in-person meeting over the weekend. Expectations for rate hikes from the European Central Bank and the Bank of England are on the rise due to elevated energy prices. Banks in the U.K. are preparing for higher taxes if Prime Minister Starmer is replaced by someone leaning farther to the left. Standard & Poor's reaffirmed Greece's BBB rating with a Stable outlook while Germany's AAA rating was also affirmed.

• In economic data:
  • Germany's May GfK Consumer Climate -33.3 (expected -30.2; last -28.1)
  • U.K.'s April CBI Distributive Trades Survey -68 (expected -42; last -52)

---Equity Markets---

• STOXX Europe 600: unch
• Germany's DAX: +0.9%
• U.K.'s FTSE 100: -0.3%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: +0.2%
• Spain's IBEX 35: +0.3%

The S&P 500 futures currently trade one point above fair value.

Qualcomm (QCOM 165.99, +17.14, +11.5%) is sharply higher in the premarket after TF International Securities analyst Ming-Chi Kuo wrote on X that the company is working with OpenAI to develop smartphone processors.

CNBC adds that Apple (AAPL 267.74, -3.32, -1.2%) is lower this morning on the news, which points to a potential new competitor.

Equity futures point to a flattish opening this morning as negotiations between the U.S. and Iran have stalled ahead of a busy week of mega-cap earnings. 

The Wall Street Journal reported that President Trump said future talks with Iran will occur by phone after he cancelled his envoy's trip to Pakistan over the weekend. The IRGC boarded two container ships near the Strait of Hormuz, adding to the volatility. 

Iran offered the U.S. a proposal to reopen the Strait of Hormuz and end the war, but the offer seeks to postpone nuclear talks to a later date, according to Axios. 

On the corporate front, the market has a busy week of earnings ahead that will include earnings reports from five of the "Magnificent Seven" names. Strong leadership from mega-cap and other AI-related names helped power the S&P 500 and Nasdaq Composite to record highs last week despite uneven participation in the broader market. 

This week will also feature the April FOMC decision, though the market is fully pricing in the Fed leaving rates unchanged. 

There is no economic data of note on the calendar today.

In corporate news:

• Eli Lilly (LLY 883.24, -0.72, -0.1%) is set to acquire Ajax Therapeutics for up to $2.3 billion in cash. 
• China blocked Meta Platforms' (META 674.10, -0.93, -0.1%) $2 billion purchase of Manus, according to Financial Times.
• Verizon Communications (VZ 47.87, +1.49, +3.2%) beat EPS expectations by $0.07, missed revenue expectations, and raised FY26 EPS above consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a mostly higher note with Japan's Nikkei (+1.4%) and South Korea's Kospi (+2.2%) reaching fresh records. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: +0.2%, India's Sensex: +0.8%, South Korea's Kospi: +2.2%, Australia's ASX All Ordinaries: -0.2%.

In news:

• There was some encouragement from news that Iran presented a proposal to restore traffic through the Strait of Hormuz, but it is unclear if the U.S. will accept the offer.
• South China Morning Post reported that the Chinese government has developed a cheaper all-iron battery for renewable energy storage.
• Japan's Prime Minister Takaichi said that Japan has secured a stable supply of oil into next year.
• The Bank of Japan will release its latest policy statement overnight, but a rate hike is not expected at this time.

In economic data:

• China's March Industrial Profit 15.5% YTD (last 15.2%)
• Japan's February Leading Index 113.3 (expected 112.4; last 112.0) and Coincident Indicator -1.8% m/m (expected -1.6%; last 3.4%)
• Singapore's March Industrial Production 4.7% m/m (last -1.2%); 10.1% yr/yr (last 3.3%)

Major European indices are starting the week on a higher note with some encouragement from indications that U.S.-Iran negotiations are continuing despite the lack of an in-person meeting over the weekend. STOXX Europe 600: +0.4%, Germany's DAX: +0.8%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.8%.

In news:

• Expectations for rate hikes from the European Central Bank and the Bank of England are on the rise due to elevated energy prices.
• Banks in the U.K. are preparing for higher taxes if Prime Minister Starmer is replaced by someone leaning farther to the left.
• Standard & Poor's reaffirmed Greece's BBB rating with a Stable outlook while Germany's AAA rating was also affirmed.

In economic data:

• Germany's May GfK Consumer Climate -33.3 (expected -30.2; last -28.1)
• U.K.'s April CBI Distributive Trades Survey -68 (expected -42; last -52)

[BRIEFING.COM] It was another record-setting day for the S&P 500 and Nasdaq Composite, which were lifted by leadership from the mega-cap stocks and a blistering advance by the semiconductor stocks that was paced by Intel (INTC 82.57, +15.79, +23.64%) following its better-than-expected Q1 earnings report and outlook.

The strength of that leadership kept a bid in the information technology sector (+2.5%) throughout the session, which was enough, along with gains in the consumer discretionary (+1.4%) and communications services (+0.9%) sectors, to keep the market-cap-weighted indices afloat, while the Dow Jones Industrial Average (-0.2%) and equal-weighted S&P 500 (-0.2%) languished with modest losses.

AI enthusiasm, momentum, performance chasing, and fundamental earnings strength were the tailwinds pushing the semiconductor stocks to record heights. The Philadelphia Semiconductor Index, led by Intel and NVIDIA (NVDA 208.26, +8.62, +4.32%), surged 4.3%, leaving it up 38.6% since the end of March.

NVIDIA was part of a mega-cap cohort that strengthened as the session progressed. The Vanguard Mega-Cap Growth ETF (MGK 84.22, +1.35, +1.63%) advanced 1.6% and closed near its best levels of the session, underpinned by added strength in Amazon (AMZN 263.99, +8.91, +3.49%), Meta Platforms (META 675.05, +15.90, +2.41%), Microsoft (MSFT 424.60, +8.85, +2.13%), and Alphabet A (GOOGL 344.40, +5.51, +1.63%).

These leadership stocks carried the day, which was also featured the DOJ dropping its criminal probe of Fed Chair Powell, earnings results from Procter & Gamble (PG 148.11, +2.40, +1.65%), and back-and-forth headlines touting the possibility of the U.S. and Iran meeting again this weekend in Pakistan.

It was still unclear as of this post if the two sides were going to actually meet or if they were going to be in Pakistan and use go-betweens to lay the groundwork for resuming ceasefire discussions. WTI crude futures, which flirted with $98.00/bbl at one point, settled the day down 1.4% at $94.42/bbl.

The stock market handled the uncertainty with a sense of resolve, much like it has since the initial ceasefire agreement was announced, clinging to the view that what comes next won't be profoundly harmful to the global economy.

That point notwithstanding, there were pockets of weakness in today's market. The health care sector (-1.4%) was plagued by losses in most components, but namely Eli Lilly (LLY 884.18, -33.47, -3.65%) and HCA (HCA 432.50, -41.53, -8.76%). The latter company reported earnings results that were tarnished by weaker-than-expected patient volumes.

Other laggards included the industrials (-0.9%), financials (-0.6%), consumer staples (-0.4%), real estate (-0.4%), and energy (-0.3%) sectors.

U.S. Treasuries finished a down week on a mostly higher note with shorter tenors pacing a Friday bounce that pressured yields from their highest levels in over two weeks. The 2-yr note yield, which is more sensitive to changes in the fed funds rate, was down five basis points to 3.78%, while the 10-yr note yield ended down one basis point at 4.31%.

• Russell 2000 YTD:+12.2%
• S&P Mid Cap 400:+10.1%
• Nasdaq Composite:+6.9%
• S&P 500:+4.7%
• DJIA:+2.4%

Reviewing today's economic data:

• The final reading for the University of Michigan Consumer Sentiment Index for April edged up to 49.8 (Briefing.com consensus: 47.6) from the preliminary (and record low) reading of 47.6. The final reading for March was 53.3. In the same period a year ago, the index stood at 52.2.
  • The key takeaway from the report is that there was some slight improvement from the preliminary report as gas prices eased a bit following the ceasefire, yet gas prices are still much higher than where they were before the war began, which is contributing to the stark reality that consumer sentiment is near the trough seen in June 2022.