[BRIEFING.COM] There is a feeling in the stock market today that there is Microsoft (MSFT 444.47, +53.93, +13.81%) and the semiconductor stocks, and then there is everything else. That is an oversimplification, but it isn't too far afield.

There is a lot of red on stock monitors. Nine of the 11 S&P 500 sectors are lower, but if it wasn't for the gains in Amazon (AMZN 236.62, +9.97, +4.40%) and Tesla (TSLA 304.48, +6.15, +2.06%), we'd be talking about 10 S&P 500 sectors trading lower.

By and large, it is the mega-cap stocks and the growth factor that are carrying the indices today, which is a reversal of recent patterns that have favored value and low-volatility stocks. Illustrating that point is the fact that, while the Vanguard Mega Cap Growth Index Fund (MGK 84.66, +1.56, +1.87%) is up 1.9% today, it is down 0.1% for the week.

Apple (AAPL 331.23, -6.96, -2.06%) will be carrying the weight of the mega-cap cohort on its back when it reports after today's close, along with Amazon, which will also be shouldering some of the burden.

Separately, the S&P 500 is up 0.7% today but has faded from its earlier high (7,417), unable to retain a posture above the 7,400 level. From yesterday's cash settlement, the 10-yr note yield is up five basis points to 4.67%, but it is down four basis points from the overnight high of 4.71%. The fade from the overnight high has helped underpin today's gains in the stock market.

[BRIEFING.COM] The stock market's opening rush has lost a bit of steam; at the same time, there has been a modest uptick in bond yields and oil prices.

The opening move was remarkable, especially in the case of Microsoft (MSFT 444.72, +54.18, +13.87%), but it occurred, interestingly, alongside reports that hedge fund Situational Awareness found itself on the wrong side of many AI and software trades of late, prompting an unwinding and a decision to sell its entire book of public investments, according to CNBC.

One might think that such a report would drive fears of forced liquidation elsewhere, but such fears weren't at all apparent in today's early trade. On the contrary, it was just pure excitement for MSFT's report and the renewed strength in the semiconductor stocks, which are undoubtedly hurting short sellers today.

The Philadelphia Semiconductor Index is up 7.3% but had been up as much as 9.2%.

[BRIEFING.COM] The move in Microsoft (MSFT 448.98, +58.45, +14.97%) today is truly extraordinary, considering the size of this company. There has been a massive shift in fund flows that has turned the technical tide for Microsoft in a big way, as it now sits above both its 50-day and 200-day moving averages.

Microsoft is effectively responsible for the Dow's gains, but others, namely Amazon (AMZN 237.59, +10.94, +4.83%), Boeing (BA 220.58, +6.57, +3.07%), Caterpillar (CAT 821.05, +38.34, +4.90%), Goldman Sachs (GS 1015.31, +34.56, +3.52%), NVIDIA (NVDA 196.82, +6.81, +3.58%), and JPMorgan Chase (JPM 348.80, +4.09, +1.19%), are pulling some pricing weight as well.

Market breadth overall, however, indicates that the early gains for the major indices are not broad-based. Breadth at the NYSE is even, whereas advancers lead decliners at the Nasdaq by a 5-to-3 margin.

For the most part, gains are accruing to tech stocks today. Eight of the 11 S&P 500 sectors are lower today, but when the most heavily weighted sector-information technology-is up 5.0%, it is more than capable of compensating for the weakness seen elsewhere.

[BRIEFING.COM] There is no question where the early strength is concentrated. The S&P 500 information technology sector is up a massive 4.4% and it has Microsoft (MSFT 447.66, +57.12, +14.63%) to thank for that. Mr. Softie is no softie today-far from it. The Dow component is soaring after its better-than-expected earnings report and outlook, which was a very welcome distraction from the disappointments shared by Meta Platforms (META 532.22, -53.40, -9.12%) and Qualcomm (QCOM 150.13, -5.55, -3.57%).

The other big contributor is Lam Research (LRCX 307.24, +54.88, +21.75%), which is surging after its earnings report and leaving some long coattails for the likes of Applied Materials (AMAT 501.68, +65.23, +14.95%), KLA Corporation (KLAC 184.86, +14.67, +8.62%), and other semiconductor stocks to ride.

The Philadelphia Semiconductor Index is up 7.4%.

Elsewhere, the communication services sector (-3.2%) is the weakest area due to Meta's troubles, followed by the more defensive-oriented consumer staples (-2.5%) and health care (-1.8%) sectors.

A trove of key economic data was released at 8:30 a.m. ET.

• Q2 GDP-Adv. 1.5% vs. 2.3% Briefing.com consensus; Q1 final was 2.1%; 
• Q2 GDP Deflator-Adv. 6.3% vs. 3.7% Briefing.com consensus; Q1 Final was 3.6%
• Weekly Initial Claims 197K vs. 203K Briefing.com consensus; prior revised to 188K from 187K
• Weekly Continuing Claims 1.782 mln -- prior revised to 1.789 mln from 1.796 mln
• June Personal Income 0.2% vs. 0.3% Briefing.com consensus; prior 0.7%
• June Personal Spending 0.3% vs. 0.4% Briefing.com consensus; prior revised to 0.9% from 0.7%
• June PCE Prices -0.1% vs. -0.1% Briefing.com consensus; prior revised to 0.5% from 0.4%; PCE Price Index +3.7% yr/yr vs 4.1% prior
• June PCE Prices - Core 0.1% vs. 0.2% Briefing.com consensus; prior 0.3%; Core PCE Price Index +3.3% yr/yr vs 3.4% prior

Equity futures are pointing to a higher open, underpinned by a 10% gain in Microsoft (MSFT) following its better-than-expected quarterly results and outlook that is helping to offset weakness in Meta Platforms (META) and Qualcomm (QCOM) after their earnings reports.

Some easing in oil prices (WTI -1.0% to $83.59/bbl), buy-the-dip interest, and speculation that yesterday's post-FOMC retreat was overdone have acted as underpinning factors for the rebound trade.

Still, there are a lot of moving parts to consider, including reports after the close from Apple (AAPL) and Amazon (AMZN), the continuing upward drift in long-term rates, the Bank of England's decision (6 to 3) to leave its key lending rate unchanged at 3.75%, the ongoing military strikes between the U.S. and Iran, and a large slate of economic data that includes the Advance Q2 GDP, June Personal Income and Spending, and Weekly Initial and Continuing Jobless Claims reports at 8:30 a.m. ET.

In corporate news:

• Meta Platforms (META 530.31, -55.61, -9.3%): misses by $1.01, reports revs in-line; guides Q3 revs in-line, narrows FY26 CapEx guidance, raises low end of total expense guidance
• Microsoft (MSFT 429.66, +39.12, +10.0%): beats by $0.50, beats on revs; Azure growth of +43% vs +39-40% CC prior guidance; SepQ revenue above consensus; guides to Azure +45% CC
• Qualcomm (QCOM 146.90, -8.78, -5.6%): misses by $0.02, beats on revs; guides Q4 EPS below consensus, revs in-line
• Starbucks (SBUX 110.56, +6.42, +6.2%): beats by $0.19, beats on revs; raises FY26 EPS above consensus; Q3 North America comps +8.1%

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mixed note with South Korea's Kospi (-1.2%) giving up an intraday gain even though Samsung reported strong results. Japan's Nikkei: +0.7%, Hong Kong's Hang Seng: +0.2%, China's Shanghai Composite: -0.6%, India's Sensex: +0.4%, South Korea's Kospi: -1.2%, Australia's ASX All Ordinaries: -0.8%.

In news:

• Japan's cabinet lowered its domestic growth forecast for FY26 to 0.9% from 1.3% and raised the CPI outlook to 2.2% from 1.9%.
• The Bank of Japan will release its latest policy Statement overnight, but a hike is not expected at this time.
• Japan's Prime Minister Takaichi ordered the lowering of a food sales tax to 1% from 8%, starting in April, as expected.
• The Hong Kong Monetary Authority kept its policy rate at 4.00%, following in the footsteps of the Fed.

In economic data:

• Japan's July Household Confidence 34.9 (expected 34.2; last 33.8)
• Australia's June Building Approvals 7.2% m/m (expected -0.7%; last -1.6%); 8.9% yr/yr (last 5.5%). Q2 Import Price Index 5.7% qtr/qtr (expected 0.0%; last 0.1%) and Export Price Index 1.1% qtr/qtr (last 0.5%)
• New Zealand's July ANZ Business Confidence 56.1 (last 36.6)

Major European indices trade in the green. STOXX Europe 600: +0.4%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.9%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +1.5%.

In news:

• The eurozone's flash Q2 GDP (0.4%; expected 0.2%) was ahead of expectations thanks to above-consensus growth in Germany, Italy, and Spain.
• Italy's Unemployment rate unexpectedly jumped to 5.7% from 5.3%, which will be scrutinized if the jump is sustained in the coming months.
• Several large European companies raised their guidance today, led by Adidas, Rolls-Royce, Sanofi, and Accor.
• The Bank of England voted 6-3 to hold its bank rate at 3.75%, as expected.

In economic data:

• Eurozone's Q2 GDP 0.4% qtr/qtr (expected 0.2%; last -0.2%); 1.0% yr/yr (expected 0.5%; last 0.3%). June Unemployment Rate 6.3% (expected 6.2%; last 6.3%). July Business and Consumer Survey 96.9 (expected 96.0; last 95.4)
• Germany's Q2 GDP 0.2% qtr/qtr (expected 0.1%; last 0.3%); 0.9% yr/yr (expected 0.6%; last 0.4%)
• France's Q2 GDP 0.2% qtr/qtr, as expected (last -0.1%); 0.7% yr/yr (expected 0.8%; last 0.8%). June Consumer Spending 0.4% m/m (expected -0.1%; last 0.3%). Q2 nonfarm payrolls -0.1% qtr/qtr, as expected (last 0.0%)
• Italy's Q2 GDP 0.2% qtr/qtr (expected 0.1%; last 0.3%); 1.0% yr/yr (expected 0.7%; last 0.8%). June Unemployment Rate 5.7% (expected 5.0%; last 5.3%)
• Spain's Q2 GDP 0.7% qtr/qtr (expected 0.6%; last 0.6%); 2.7% yr/yr (expected 2.5%; last 2.7%). July CPI 0.2% m/m, as expected (last 0.6%); 3.0% yr/yr (last 2.9%)
• Swiss July KOF Leading Indicators 103.5 (expected 100.9; last 102.1)

[BRIEFING.COM] The major averages finished sharply lower on Wednesday, with the S&P 500 (-1.5%), Nasdaq Composite (-1.7%), and DJIA (-2.2%) settling near their session lows after an initial post-FOMC relief rally ultimately gave way to renewed selling pressure.

Earlier weakness was driven by another sharp advance in oil prices and continued semiconductor selling, while the Federal Reserve's decision to leave interest rates unchanged briefly lifted growth stocks before that enthusiasm faded into the close. Crude oil futures settled $5.16 higher (+6.5%) at $84.48 per barrel following reports that the U.S. intercepted Iranian missiles targeting U.S. bases across the Middle East, with President Trump vowing retaliation. The energy sector (+2.1%) finished comfortably atop the leaderboard as a result, while the defensive consumer staples sector (+0.4%) also managed a modest gain amid the market's risk-off tone and another record close for Coca-Cola (KO 89.13, +0.86, +0.97%).

The communication services sector (+0.2%) managed to avoid a lower finish, supported by strength in Alphabet (GOOG 335.76, +3.16, +0.95%), although Meta Platforms (META 585.61, -7.80, -1.31%) traded lower ahead of its quarterly results.

This afternoon's focal point was the FOMC policy decision, which left the fed funds target range unchanged at 3.50%-3.75%, as widely expected. Unlike June's unanimous decision, however, three regional Fed presidents dissented in favor of a 25-basis point rate hike. The announcement initially fueled a broad rebound across growth-oriented stocks as investors welcomed the absence of another rate increase, lifting the Vanguard Mega Cap Growth ETF into positive territory and dramatically narrowing semiconductor losses. That momentum proved short-lived, however, as the post-FOMC rally steadily unraveled during Fed Chair Kevin Warsh's press conference, leaving the major averages back near their lows by the closing bell.

The top-weighted information technology sector (-2.5%) surrendered its post-Fed gains and finished among the session's laggards as semiconductor stocks resumed their retreat. The PHLX Semiconductor Index finished 5.3% lower, with KLA Corporation (KLAC 170.19, -20.61, -10.80%) remaining under pressure following its quarterly results and NVIDIA (NVDA 190.01, -7.00, -3.55%) ranking among the weakest-performing "Magnificent Seven" components.

SK hynix Inc.'s (SKHY 126.86, -3.31, -2.54%) U.S.-listed shares also declined despite another quarter of record results, as investors looked beyond continued strength in AI-driven HBM demand and instead focused on the company's elevated capital spending plans and aggressive capacity expansion.

The Vanguard Mega Cap Growth ETF likewise erased its afternoon rebound to finish down 1.6%.

The industrials sector (-3.2%) finished with an even wider loss as disappointing earnings from Lennox Int'l (LII 430.27, -113.84, -20.92%) and Vertiv (VRT 223.09, -46.47, -17.24%) weighed heavily on the group, while other electrical product names lagged amid the weakness in semiconductor names.

The utilities (-1.4%) and financials (-1.6%) sectors also ranked among the session's laggards.

Outside the S&P 500, the Russell 2000 (-1.6%) and S&P Mid Cap 400 (-1.7%) finished with losses comparable to those of the major averages.

Despite a brief post-FOMC rebound that temporarily lifted growth stocks and narrowed semiconductor losses, the market ultimately returned to the same themes that pressured the market throughout the morning. Higher oil prices, geopolitical uncertainty, and persistent weakness across semiconductor stocks kept broader sentiment in check, leaving attention squarely focused on quarterly results from Microsoft (MSFT 390.54, -2.81, -0.71%) and Meta Platforms (META 585.61, -7.80, -1.31%) after the close, which will provide the market's next major test of AI spending, earnings momentum, and investor sentiment. With little offsetting strength elsewhere in the market, another wave of semiconductor selling continued to weigh heavily on the major averages, leaving the Nasdaq Composite with less than half of the year-to-date gain it carried into July.

U.S. Treasuries had a mixed showing on Wednesday, as the 2-year note recorded a slim gain while longer tenors retreated, pulling back from three days of consecutive gains. The final standing was a change from the opening dynamic, which saw relative weakness up front and outperformance in the 30-year bond as the market awaited the FOMC Statement for July. The 2-year note yield settled down four basis points to 4.24%, and the 10-year note yield settled up two basis points to 4.62%. 

• Russell 2000: +17.1% YTD
• S&P Mid Cap 400: +13.0% YTD
• DJIA: +7.4% YTD
• S&P 500: +6.9% YTD
• Nasdaq Composite: +5.2% YTD

Reviewing today's data: 

• Weekly MBA Mortgage Applications Index -6.4%; Prior 1.9%