[BRIEFING.COM] The major averages continue to trade in a stable range this afternoon, supported by broad strength.

Losses at the sector level are limited to the communication services sector (-0.5%), which is the worst-performing S&P 500 sector this week. Much of that weakness can be attributed to an underwhelming performance from Alphabet (GOOG 380.58, -2.89, -0.75%), which has moved into negative month-to-date territory with its recent weakness. Meta Platforms (META 610.83, +3.45, +0.57%), which is also a component of the communication services sector, is the only other "magnificent seven" name that trades lower for the month of May.

Elsewhere in the sector, Take-Two (TTWO 229.01, -9.07, -3.81%) is a laggard after reporting its Q4 (March) results yesterday evening. The company beat on bookings expectations, but guided Q1 EPS below consensus, with FY26 EPS above consensus.

[BRIEFING.COM] With the three-day Memorial Day weekend calling, participation today may be thinner than usual, but that hasn't stopped the stock market from conducting business as usual-at least, as usual since the end of March.

Stocks started higher, dipped, and then saw that dip get bought in a manner that led to new session highs. The latter was reached a short time ago, with the S&P 500 climbing to 7,506.32.

That move was attributed, in part, to a social media post from Sky News Arabia in which it said "sources" have told it that "negotiations in Tehran have reached an understanding on broad lines regarding the nuclear file." This news has yet to be confirmed by a U.S. news organization, which may explain why there hasn't been a stronger reaction to it.

In any case, the stock market has been on watch for a more permanent peace deal since the temporary ceasefire was agreed to on April 7. That deal remains elusive, yet there is a "peace put" under the market that has helped sustain the monstrous rally that has unfolded since the end of March. It is somewhat telling that the CBOE Volatility Index is down 1.0% to 16.59 in front of the extended weekend. That is, there isn't much hedging guarding against the risk of something bad happening.

Separately, it was announced earlier by Tulsi Gabbard, Director of National Intelligence, that she will be resigning her position to be with her husband, who has recently been diagnosed with a rare form of bone cancer.

[BRIEFING.COM] The S&P 500 continues to trade near its highs for the session, lurking just below the 7,500 level that was first eclipsed on May 14. Today's move has been spurred by relatively broad-based participation, evidenced by a 0.9% increase for the equal-weighted S&P 500 that is outlegging the 0.6% gain for the market cap-weighted S&P 500.

The small-cap Russell 2000 (+0.9%) is also outperforming today. Small-cap stocks have been bolstered by the possibility of sliding gas prices in the event there is a peace deal between the U.S. and Iran.

Lower gas prices would be a most welcome development. Rising gas prices were a driving factor behind the increase in inflation expectations seen this morning in the final May reading for the University of Michigan Consumer Sentiment Index, which slid to a record-low 44.8. Year-ahead inflation expectations were a lofty 4.8%.

Shorter-dated Treasury securities, which are more sensitive to changes in monetary policy, did not react well to the inflation expectations. The 2-yr note yield is up three basis points to 4.13%, leaving it well above the current target for the fed funds rate of 3.50-3.75%.

[BRIEFING.COM] Stocks are looking to end a choppy week on a higher note, with the S&P 500 (+0.6%), Nasdaq Composite (+0.5%), and DJIA (+0.8%) holding near session highs early in the afternoon.

The major averages are supported by broad strength and solid tech leadership despite inflation expectations driving up the probability of a rate hike. Oil prices have remained relatively stable today, though shorter-tenor Treasury yields continue to face upward pressure after Fed Governor Christopher Waller (voting FOMC member) said he would need to see improvement on inflation to consider a rate reduction. The CME FedWatch tool now assigns a greater than 50% probability of a rate hike at the October FOMC meeting, marking a notable shift in expectations under new Fed Chair Kevin Warsh, who was just sworn in.

Even so, the market is showing resilience today ahead of the long holiday weekend.

The top-weighted information technology sector (+0.9%) is contributing to the index-level advance, supported by gains across several key groups. Semiconductor names are extending yesterday's advance, with the PHLX Semiconductor Index up 2.4% as Qualcomm (QCOM 237.36, +23.94, +11.22%) trades sharply higher while Advanced Micro Devices (AMD 470.59, +21.00, +4.67%) holds a nice gain after announcing plans to increase CPU production with Taiwanese partners.

TheiShares GS Software ETF (IGV 94.25, +1.77, +1.91%) also holds a solid gain as Workday (WDAY 128.68, +6.83, +5.61%) moves higher after earnings.

Though not a component of the S&P 500, Lenovo (LNVGY 40.11, +6.19, +18.25%) earnings report has prompted sharp gains across other hardware names such as Dell (DELL 294.70, +41.90, +16.57%) and HP Inc. (HPQ 25.26, +3.36, +15.32%).

Elsewhere, the health care sector (+1.2%) holds the widest gain, with Merck (MRK 121.92, +6.04, +5.21%) pacing the advance after several positive updates related to the company's oncology drugs.

The industrials sector (+1.0%) holds a similar gain, with Generac (GNRC 267.87, +20.08, +8.10%) moving sharply higher after Jefferies upgraded the stock to Buy from Hold.

Overall, today's session suggests investors remain willing to look past a more hawkish rate backdrop, with several notable post-earnings moves and renewed momentum across market leaders keeping the major averages on the doorstep of record highs.

Reviewing today's data:

• The final reading for the University of Michigan Consumer Sentiment Index for May dropped to 44.8 (Briefing.com consensus: 48.2) from the preliminary reading of 48.2, marking a new historic low. The final reading for April was 49.8. In the same period a year ago, the index stood at 52.2.
  
  • The key takeaway from the report is that consumers are clearly concerned about rising costs and their ability to out-earn inflation, which they are concerned will increase beyond fuel prices.
• The April leading Economic Index checked in at 0.1% (Briefing.com consensus -0.3%), from the prior reading of -0.6%.

[BRIEFING.COM] The S&P 500 (+0.6%), Nasdaq Composite (+0.6%), and DJIA (+0.9%) continue to chart session highs.

Kevin Warsh has been sworn in as Chairman of the Federal Reserve, with President Trump telling Kevin Warsh to be "totally independent" and telling him to "not to look at me; just do your thing."

On a related note, Fed Governor Chirstopher Waller said earlier today "I am going to need to see improvement on inflation or a significant deterioration in the labor market before I would consider reducing the policy rate."

There is now a 56.2% probability that there will be at least a 25-basis-point hike to 3.75-4.00% at the October FOMC meeting, up from 45.6% yesterday, according to the CME FeedWatch Tool.

[BRIEFING.COM] The major averages continue to trade in a stable range near session highs at midday.

On the earnings front, Ross Stores (ROST 231.04, +13.85, +6.38%) is trading higher and reaching new all-time highs after a strong start to FY27 with its Q1 (Apr) report last night. The off-price retailer comfortably beat expectations, delivering a large EPS beat, while revenue growth accelerated to 20.6% year-over-year to $6.01 billion. Ross also issued upside Q2 guidance for EPS and revenue, and raised its FY27 EPS and comp sales outlook.

In other corporate news, Estee Lauder (EL 86.84, +7.94, +10.06%) is surging higher after the company officially ended discussions with Puig around a potential business combination, removing a layer of uncertainty that had weighed on sentiment.

[BRIEFING.COM] The S&P 500 (+0.7%), Nasdaq Composite (+0.7%), and DJIA (+0.8%) sit at session highs shortly before midday, supported by broad strength and solid tech leadership.

The information technology sector (+1.1%) now holds the widest gain across S&P 500 sectors, supported by gains across several key groups. The PHLX Semiconductor Index (+2.5%) and iShares Expanded Tech-Software ETF (+1.4%) are both higher, while Lenovo's (LNVGY 39.63, +5.71, +16.83%) earnings report has prompted some sharp gains across hardware names such as HP Inc. (HPQ 25.52, +3.62, +16.53%) and Dell (DELL 291.00, +38.20, +15.11%).

Apple (AAPL 310.80, +5.81, +1.90%) is a mega-cap standout, while Tesla (TSLA 428.20, +10.35, +2.48%) provides solid leadership for the consumer discretionary sector (+0.6%), and the Vanguard Mega Cap Growth ETF is 0.7% higher.

Eight S&P 500 sectors trade higher, while the Russell 2000 (+0.6%) and S&P Mid Cap 400 (+0.3%) also hold gains.

Geopolitical headlines have been somewhat muted, with Secretary of State Marco Rubio saying "slight progress" has been made in talks between the U.S. and Iran. Crude oil prices and shorter-tenor Treasury yields are both modestly higher, though neither has had much effect so far on the major averages.

[BRIEFING.COM] The major averages are little changed from previous values, despite some deterioration in sector strength.

The information technology sector (+0.7%) remains stable, with Dell (DELL 292.94, +40.14, +15.88%) and HP Inc. (HPQ 25.24, +3.34, +15.23%) among the best-performing S&P 500 names after rival Lenovo (LNVGY 39.54, +5.62, +16.57%) delivered a strong Q4 earnings report that reinforced optimism surrounding the global PC recovery and accelerating AI infrastructure demand.

Lenovo reported record Q4 revenue of $21.6 billion, up 27% year-over-year, while adjusted net income surged 101%, driven by broad-based strength across its PC, AI server, and services businesses. The strongest bullish read-through for DELL and HP came from Lenovo's Intelligent Devices Group, where revenue climbed 24% year-over-year to $14.6 billion, PC-related revenue increased 26%, and the company posted a record 24.4% global PC market share while citing leadership in AI PCs, premium PCs, and gaming systems.

[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (+0.3%), and DJIA (+0.6%) are maintaining their opening gains as participation remains broad.

The final reading for the University of Michigan Consumer Sentiment Index for May dropped to 44.8 (Briefing.com consensus: 48.2) from the preliminary reading of 48.2, marking a new historic low. The final reading for April was 49.8. In the same period a year ago, the index stood at 52.2.

The key takeaway from the report is that consumers are clearly concerned about rising costs and their ability to out-earn inflation, which they are concerned will increase beyond fuel prices.

[BRIEFING.COM] The S&P 500 (+0.5%), Nasdaq Composite (+0.3%), and DJIA (+0.7%) are higher this morning, supported by broad early strength.

Nine S&P 500 sectors hold gains, led by the health care sector (+1.3%). Merck (MRK 121.17, +5.29, +4.57%) trades higher after positive partnered Phase III results showed a substantial reduction in disease progression in non-small cell lung cancer.

The top-weighted information technology sector (+0.7%) also holds a solid gain, with hardware names such as Dell (DELL 290.65, +37.85, +14.97%) and HP Inc. (HPQ 24.52, +2.62, +11.96%) trading sharply higher. Chipmakers are off to a good start as well, with the PHLX Semiconductor Index up 1.6%, though NVIDIA (NVDA 216.70, -2.81, -1.28%) extends yesterday's post-earnings weakness.

On the geopolitical front, Secretary of State Marco Rubio says there has been "slight progress" with Iran, but he doesn't want to exaggerate things. Crude oil is higher for the day, but remains below the $98 per barrel mark.

Just released, the final reading for the May University of Michigan Consumer Sentiment Index came in at 44.8 (Briefing.com consensus 48.2), from the preliminary reading of 48.2.

The April leading Economic Index checked in at 0.1% (Briefing.com consensus -0.3%), from the prior reading of -0.6%.

The stock market remains on track for a higher opening ahead of the long holiday weekend.

Bloomberg reports that leaders from the UAE, Qatar, and Saudi Arabia have urged President Trump not to restart the war with Iran. Oil prices and Treasury yields are both stable this morning, providing a supportive backdrop for stocks.

The S&P 500 futures currently trade 35 points above fair value. 

Equity indices in the Asia-Pacific region ended the week on a higher note. Japan's CPI decelerated in April with Core CPI growing at its slowest pace in more than four years. China's National Development and Reform Commission pushed back on reports that technology firms were told not to accept foreign investment. There has been some speculation about a potential currency intervention from Japan's Ministry of Finance after the yen returned toward this year's low against the dollar in the 160 area.

• In economic data:
  • Japan's April National CPI 0.1% m/m (last 0.4%); 1.4% yr/yr (last 1.5%). April National Core CPI 1.4% yr/yr (expected 1.7%; last 1.8%)
  • South Korea's May Consumer Confidence 106.1 (last 99.2)
  • New Zealand's Q1 Retail Sales 0.9% qtr/qtr (expected 0.5%; last 0.9%) and Core Retail Sales 1.0% qtr/qtr (expected 0.8%; last 1.5%)

---Equity Markets---

• Japan's Nikkei: +2.7%
• Hong Kong's Hang Seng: +0.9%
• China's Shanghai Composite: +0.9%
• India's Sensex: +0.3%
• South Korea's Kospi: +0.4% 
• Australia's ASX All Ordinaries: +0.4%

Major European indices trade in the green. European Central Bank President Lagarde said that the central bank is particularly attentive to second-round effects of inflation while policymaker Demarco said that a June rate hike is likely. Germany's defense minister said that his country's defense spending will exceed 4% of GDP this year. Euronext said that it is not interested in merging with Deutsche Boerse.

• In economic data:
  • Germany's Q1 GDP 0.3% qtr/qtr, as expected (last 0.2%); 0.4% yr/yr (expected 0.3%; last 0.4%). June GfK Consumer Climate -29.8 (expected -33.7; last -33.1). May ifo Business Climate Index 84.9 (expected 84.2; last 84.5). May Current Assessment 86.1 (expected 85.1; last 85.4) and Business Expectations 83.8 (expected 83.5; last 83.5)
  • U.K.'s April Retail Sales -1.3% m/m (expected -0.6%; last 0.6%); 0.0% yr/yr (expected 1.3%; last 1.4%). April Core Retail Sales -0.4% m/m (expected -0.3%; last 0.1%); 1.1% yr/yr (expected 1.5%; last 1.5%). April Public Sector Net Borrowing GBP24.30 bln (expected GBP20.70 bln; last GBP11.50 bln)
  • France's May Business Survey 102 (expected 100; last 100)

---Equity Markets---

• STOXX Europe 600: +0.8% 
• Germany's DAX: +1.0% 
• U.K.'s FTSE 100: +0.5%
• France's CAC 40: +0.7% 
• Italy's FTSE MIB: +0.9% 
• Spain's IBEX 35: +0.5% 

The S&P 500 futures currently trade 30 points above fair value.

Advanced Micro Devices (AMD 461.08, +11.49, +2.6%) is collaborating with partners in Taiwan to ramp up CPU production amid high global demand, according to Reuters.

Chipmakers are trending higher in the premarket, with NVIDIA (NVDA 220.65, +1.14, +0.5%) poised to recoup a portion of yesterday's weakness.

Equity futures point to a higher opening amid a relatively quiet Friday morning ahead of the long weekend.

Despite some intraday volatility tied to swings in oil prices, the major averages finished higher yesterday, putting the indices on pace for a higher week-to-date finish. Action has been choppy this week, but if the S&P 500 can maintain its week-to-date gain, it will be the eighth straight for the index.

Not much has changed regarding the state of talks between the U.S. and Iran, with CNBC reporting that both sides suggest progress has been made, but key differences remain.

Investors have just a few earnings reports to assess this morning to cap off a week that was modest in the number of companies that reported but included some notable names.

On the policy front, Kevin Warsh will be sworn in as Chairman of the Federal Reserve, coming to the helm at a time when the recent surge in oil prices has ignited inflation concerns and shifted the market's expectations for policy easing.

In corporate news:

• Estee Lauder (EL 89.50, +10.59, +13.4%) is sharply higher in the premarket after ending merger discussions with Puig regarding a potential business combination.
• Ross Stores (ROST 229.67, +12.48, +5.8%) beat EPS expectations by $0.29, beat revenue expectations, saw comparable sales rise 17%, guided Q2 EPS above consensus, and raised its FY27 EPS above consensus.
• Workday (WDAY 130.30, +8.45, +6.9%) beat EPS expectations by $0.15 and reported revenues in-line.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a higher note. Japan's Nikkei: +2.7%, Hong Kong's Hang Seng: +0.9%, China's Shanghai Composite: +0.9%, India's Sensex: +0.3%, South Korea's Kospi: +0.4%, Australia's ASX All Ordinaries: +0.4%.

In news:

• Japan's CPI decelerated in April with Core CPI growing at its slowest pace in more than four years.
• China's National Development and Reform Commission pushed back on reports that technology firms were told not to accept foreign investment.
• There has been some speculation about a potential currency intervention from Japan's Ministry of Finance after the yen returned toward this year's low against the dollar in the 160 area.

In economic data:

• Japan's April National CPI 0.1% m/m (last 0.4%); 1.4% yr/yr (last 1.5%). April National Core CPI 1.4% yr/yr (expected 1.7%; last 1.8%)
• South Korea's May Consumer Confidence 106.1 (last 99.2)
• New Zealand's Q1 Retail Sales 0.9% qtr/qtr (expected 0.5%; last 0.9%) and Core Retail Sales 1.0% qtr/qtr (expected 0.8%; last 1.5%)

Major European indices trade in the green. STOXX Europe 600: +0.6%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.5%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.2%.

In news:

• European Central Bank President Lagarde said that the central bank is particularly attentive to second-round effects of inflation while policymaker Demarco said that a June rate hike is likely.
• Germany's defense minister said that his country's defense spending will exceed 4% of GDP this year.
• Euronext said that it is not interested in merging with Deutsche Boerse.

In economic data:

• Germany's Q1 GDP 0.3% qtr/qtr, as expected (last 0.2%); 0.4% yr/yr (expected 0.3%; last 0.4%). June GfK Consumer Climate -29.8 (expected -33.7; last -33.1). May ifo Business Climate Index 84.9 (expected 84.2; last 84.5). May Current Assessment 86.1 (expected 85.1; last 85.4) and Business Expectations 83.8 (expected 83.5; last 83.5)
• U.K.'s April Retail Sales -1.3% m/m (expected -0.6%; last 0.6%); 0.0% yr/yr (expected 1.3%; last 1.4%). April Core Retail Sales -0.4% m/m (expected -0.3%; last 0.1%); 1.1% yr/yr (expected 1.5%; last 1.5%). April Public Sector Net Borrowing GBP24.30 bln (expected GBP20.70 bln; last GBP11.50 bln)
• France's May Business Survey 102 (expected 100; last 100)

[BRIEFING.COM] The stock market had a relatively eventful session, with a slate of noteworthy earnings reports and plenty of oil-driven volatility leading to some choppy action. The S&P 500 (+0.2%), Nasdaq Composite (+0.1%), and DJIA (+0.6%) finished the session modestly higher, with the DJIA notching a record closing high. The Russell 2000 (+0.9%) outperformed, and the S&P Mid Cap 400 (+0.1%) finished flattish.

Stocks opened broadly lower as oil prices and Treasury yields surged following a Reuters report that Iran's Supreme Leader said the country's enriched uranium should remain in Iran. That report was later disputed, allowing oil prices and Treasury yields to stabilize, though stocks remained mostly lower through the morning. Sentiment shifted again shortly after midday, when reports from Middle Eastern sources indicated that a final draft of a mediated peace agreement between the U.S. and Iran could be announced within hours.

Stocks moved broadly higher as yields and oil moved lower, with crude oil futures settling today's session $1.91 lower (-2.0%) at $96.28 per barrel.

Eight S&P 500 sectors finished in positive territory. Unsurprisingly, the energy sector (-1.0%) reversed its early gain amid the intraday retreat in oil prices, while the consumer staples sector (-1.6%) finished sharply lower as Walmart (WMT 121.32, -9.53, -7.29%) disappointed investors with its Q1 earnings report.

The company reported in-line EPS on above-consensus revenue, issued below-consensus EPS guidance for Q2, and reaffirmed its EPS guidance for FY27, ultimately finishing as one of the worst-performing S&P 500 names.

The industrials sector (-0.1%) also faced some post-earnings weakness from Deere (DE 531.41, -29.05, -5.18%) after the company topped estimates and reaffirmed its full-year earnings guidance.

Meanwhile, the top-weighted information technology sector (+0.3%) managed to notch a modest gain despite NVIDIA (NVDA 219.51, -3.96, -1.77%) moving lower after its own eagerly anticipated earnings report.

The company delivered another standout beat-and-raise report, which included a massive jump in revenues and impressive forward guidance. However, the stock struggled to build on recent gains as investors have increasingly come to expect blowout results from NVIDIA, especially with shares entering earnings near record highs after an extended rally tied to AI enthusiasm.

Other semiconductor names faced some choppiness with the broader market, but finished the day as relative outperformers, with the PHLX Semiconductor Index advancing 1.3%.

Elsewhere in the technology sector, shares of IBM (IBM 253.02, +28.02, +12.45%) soared after the company and the U.S. Department of Commerce confirmed plans to build America's first purpose-built quantum foundry, supported by a proposed $1 billion CHIPS award.

Ralph Lauren (RL 374.80, +45.56, +13.84%) captured a similar gain after a strong earnings beat, while Williams-Sonoma (WSM 191.92, +11.68, +6.48%) moved higher after earnings. The stocks led strength in the consumer discretionary sector (+0.8%), which was also supported by strength across oil-sensitive and rate-sensitive names.

The defensive utilities sector (+1.0%) outperformed this morning as the broader market lagged, trading in a steady range throughout the session.

Overall, today's session reflected a market still highly sensitive to shifts in the macro backdrop, with intraday swings in oil prices and Treasury yields driving much of the action. Even so, continued strength across semiconductors and selective post-earnings winners helped support broader participation, while NVIDIA's muted reaction despite another exceptional report underscored how elevated expectations remain across the AI trade.

U.S. Treasuries endured some volatility on Thursday, but longer tenors ultimately reclaimed their early weakness while shorter tenors recovered some of their losses but could not avoid a lower finish. The 2-year note yield settled up five basis points to 4.09%, and the 10-year note yield settled up one basis point to 4.59%.

• Russell 2000: +14.6% YTD
• Nasdaq Composite: +13.1% YTD
• S&P Mid Cap 400: +10.2% YTD
• S&P 500: +8.8% YTD
• DJIA: +4.6% YTD

Reviewing today's data

• April Housing Starts 1.465 mln (Briefing.com consensus 1.420 mln); Prior was revised to 1.507 mln from 1.502 mln, April Building Permits 1.442 mln (Briefing.com consensus 1.380 mln); Prior was revised to 1.363 mln from 1.372 mln
  • The key takeaway from the report is that there was broad-based weakness across all regions for both single-family starts and single-family building permits, underscoring the headwind posed for builders by rising costs for financing, materials, and labor.
• Weekly Initial Claims 209K (Briefing.com consensus 210K); Prior was revised to 212K from 211K, Weekly Continuing Claims 1.782 mln; Prior was revised to 1.776 mln from 1.782 mln
  • The key takeaway from the report is that there is nothing to see here, meaning there is nothing in these latest numbers that would suggest there has been a sea change in a labor market environment that remains characterized by low firing and low hiring activity.
• May Philadelphia Fed Index -0.4 (Briefing.com consensus 15.5); Prior 26.7
• May S&P Global U.S.Manufacturing PMI - Prelim 55.3; Prior 54.5
• May S&P Global U.S. Services PMI - Prelim 50.9; Prior 51.0