[BRIEFING.COM] Stocks finished modestly higher on Wednesday, but the relatively small gains in the major averages understated a much stronger showing across several areas of the broader market. The S&P 500 (+0.2%), Nasdaq Composite (+0.2%), and DJIA (+0.2%) advanced in unison, while the S&P 500 Equal Weighted Index (+1.0%) comfortably outperformed as rate-sensitive groups and a number of stocks with company-specific catalysts rallied.

The session got an early boost after the U.S. Department of the Treasury announced that it will at least double the size of its liquidity-support buyback operations for longer-dated nominal securities beginning September 9. The announcement provided some relief from the elevated long-term yields that have pressured equities recently and helped fuel a rebound across rate-sensitive areas of the market.

Homebuilders were among the biggest beneficiaries, with the iShares U.S. Home Construction ETF jumping 3.1%. Strength across retailers and mega-cap names provided additional support to the consumer discretionary sector (+2.1%), with Target (TGT 159.03, +6.56, +4.30%) and Lowe's (LOW 220.71, +5.07, +2.35%) advancing following their earnings reports while Amazon (AMZN 265.84, +6.39, +2.46%) and Tesla (TSLA 351.12, +14.25, +4.23%) rebounded from recent weakness.

The health care sector (+3.5%) was the clear sector leader following positive results for an experimental cancer vaccine from Moderna (MRNA 174.38, +111.42, +176.97%) and Merck (MRK 152.22, +17.05, +12.61%). Moderna more than doubled in value and Merck posted a double-digit gain, helping send the iShares Biotechnology ETF up 6.6%.

The materials sector (+1.7%) was another standout as higher precious metals prices supported Newmont Corporation (NEM 125.08, +9.10, +7.85%) and other mining stocks.

Seven S&P 500 sectors ultimately finished higher, highlighting the broad participation beneath the relatively modest gains in the headline averages. That divergence was largely a product of continued weakness across semiconductor stocks. The PHLX Semiconductor Index fell 2.1%, extending yesterday's steep decline and weighing heavily on the information technology sector (-0.7%). Semiconductor-related electrical equipment names also remained under pressure, contributing to the industrials sector's (-0.9%) underperformance.

The afternoon release of the FOMC minutes provided a reminder that additional monetary tightening remains a possibility. Most participants supported keeping rates unchanged at the latest meeting, though several favored a 25-basis-point increase and many judged that further tightening would likely be necessary if inflation fails to decline. Stocks also absorbed another increase in oil prices. WTI crude settled $0.80 higher (+0.9%) at $85.68 per barrel, continuing its recent climb but failing to derail the broader advance.

Wednesday's session ultimately featured a notable broadening in participation following the technology-driven weakness earlier in the week. Rate-sensitive stocks, health care, materials, and several earnings-related movers provided strong leadership, allowing the equal-weight S&P 500 to substantially outperform even as another sharp decline in semiconductor stocks kept the headline averages' gains relatively modest.

U.S. Treasuries had a mixed showing on Wednesday, as the 10year and 30-year note yields added to their gains from Tuesday while shorter tenors finished flat after retreating from a higher start. The 2-year note yield finished unchanged at 4.18%, and the 10-year note yield settled down five basis points to 4.65%. 

• Russell 2000: +22.2% YTD
• S&P Mid Cap 400: +16.3% YTD
• Nasdaq Composite: +13.3% YTD
• S&P 500: +12.6% YTD
• DJIA: +11.2% YTD

Reviewing today's data:

• The weekly MBA Mortgage Index was down 0.4% after rising 3.6% a week ago. The Purchase Index was down 2.0% while the Refinance Index rose 1.5%.

[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (+0.3%), and DJIA (+0.3%) remain on track for a higher finish with just half an hour left in the session.

Axios reported that the U.S. military has established a shipping corridor to transport millions of barrels of oil through the Strait of Hormuz, and crude oil futures settled today's session $0.80 higher (+0.9%) at $85.68 per barrel.

[BRIEFING.COM] The S&P 500 (+0.3%) continues hanging onto a modest gain with support from seven sectors.

The market finds itself essentially where it was before this afternoon's release of the FOMC Minutes from the July meeting. Unsurprisingly, the Minutes showed that many policymakers believe that a rate hike will likely be needed if inflation does not ease. However, inflation has eased a touch since the July meeting, so this acknowledgement has had little impact on the market today.

Health care (+3.6%) has set the pace throughout the day, thanks to a surge in Moderna (MRNA 154.80, +91.84, +145.87%) after the company released positive trial results from an mRNA treatment for melanoma. The news has invited increased interest in the biotech group as a whole, sending the SPDR S&P Biotech ETF (XBI 167.93, +7.82, +4.88%) toward its record high from early 2021 (174.79).

[BRIEFING.COM] The major averages have narrowed their gains with the S&P 500 now up just 0.3% after early strength lifted the benchmark index back to its closing level from Monday.

The early gains followed an announcement from the U.S. Treasury that it is increasing its buyback capacity for Treasuries of longer tenors by at least twice the current amount. This increase will be effective in time for the Treasury's scheduled buybacks for September through early November. Deutsche Bank noted that the Treasury's decision is akin to 'Operation Twist' where proceeds from short-term bill sales will be used to support the longer end, resulting in some relief in yields on longer tenors. It is also likely that these moves are being made as part of a buffer in the event of an energy shock later this year that could result from a prolonging of the U.S.-Iran conflict.

Treasuries have dipped from their morning highs with shorter tenors now in the red while the long bond is hanging onto the bulk of today's gain with its yield down eight basis points at 5.20%.

[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.2%), and DJIA (+0.2%) are little changed from their previous levels.

Despite relative strength in retailer names following the earnings of Target (TGT 161.50, +9.02, +5.92%) and Lowe's (LOW 221.32, +5.68, +2.63%), TJX (TJX 145.81, -5.04, -3.34%) is a laggard today after reporting its Q2 (Jul) results this morning. The off-price retailer continued its stretch of EPS beats, although results included a benefit from tariff refunds, while revenue increased 5.4% year-over-year to $15.18 billion, roughly in line with expectations. TJX also raised its FY27 EPS outlook to $5.31-5.36, nicely above expectations, while slightly increasing its revenue outlook to $63.4-63.8 billion from $63.2-63.7 billion, which remained below expectations. While TJX typically guides conservatively, much of the EPS upside reflects tariff refunds, while the below-consensus revenue outlook and reaffirmed +3-4% comp guidance despite strong first half results likely keep some focus on the back-half sales trajectory.

[BRIEFING.COM] The major averages are off their best levels of the session, but still remain modestly higher.

Meanwhile, U.S. Treasuries trade a bit below their morning highs that were reached after the U.S. Treasury announced that it has increased the maximum size of buybacks of longer tenors. The long bond was the main beneficiary of the announcement, with its yield down nearly ten basis points for the day, while shorter tenors have turned negative after giving back their slim early gains. Treasuries have held at their early-afternoon levels in immediate reaction to today's $16 billion 20-year bond sale, which met soft demand. The auction drew a high yield of 5.204%, which tailed the when-issued yield by half of a basis point while the bid-to-cover ratio (2.53x vs 2.64x average) and indirect takedown (62.9% vs 64.9% average) were below average.

[BRIEFING.COM] The stock market is enjoying its best session of the week so far, with the S&P 500 (+0.4%), Nasdaq Composite (+0.4%), and DJIA (+0.2%) holding gains shortly after midday as a reprieve in long-term interest rates and a busy batch of corporate news fuel a broadening-out trade.

Stocks received a boost shortly before the open after the U.S. Department of the Treasury announced that it will at least double the size of its liquidity-support buyback operations for longer-dated nominal securities beginning September 9. The announcement has provided some relief in a Treasury market that has been a persistent source of pressure recently, helping rate-sensitive and other areas of the equity market rebound.

The improvement beneath the surface is particularly notable following the narrow weakness seen earlier this week. Nine S&P 500 sectors trade higher, while the S&P 500 Equal Weighted Index (+0.9%) comfortably outperforms its market-cap-weighted counterpart.

Th health care sector (+2.7%) sits atop the sector standings following positive results for an experimental cancer vaccine from Moderna (MRNA 151.18, +88.22, +140.13%) and Merck (MRK 149.94, +14.77, +10.93%). Moderna has more than doubled in value, while Merck is also posting a double-digit gain.

The materials sector (+2.1%) is another standout as higher precious metals prices lift Newmont Corporation (NEM 124.83, +8.85, +7.63%) and other mining names.

Consumer staples (+1.0%) also outperforms, helped by a sharp post-earnings gain in Estee Lauder (EL 98.56, +14.29, +16.96%).

There are several sources of strength within the consumer discretionary sector (+1.7%). Retail stocks are outperforming following the latest batch of earnings, with Target (TGT 161.28, +8.80, +5.77%) and Lowe's (LOW 220.76, +5.12, +2.38%) moving firmly higher after their quarterly reports. Homebuilders are also benefiting from the relief in long-term yields, while Amazon (AMZN 264.17, +4.72, +1.82%) and Tesla (TSLA 347.42, +10.55, +3.13%) participate in a rebound across non-semiconductor mega-cap stocks.

That recovery extends to communication services, where Meta Platforms (META 552.90, +9.23, +1.70%) is bouncing back after yesterday's sharp decline amid the opening arguments in a child social-media addiction case.

However, the information technology sector (-0.4%) is one of just two sectors trading lower as the PHLX Semiconductor Index falls 1.6%, extending yesterday's sharp retreat. The industrials sector (-0.6%) is the other laggard, with weakness in semiconductor-related electrical equipment names continuing to weigh on the group.

Stocks are also weathering another increase in oil prices, with WTI crude up $1.45 (+1.8%) to $85.51 per barrel. For now, however, the relief in long-term rates and a number of positive company-specific catalysts are having the greater influence, allowing the market to broaden beyond the technology-heavy leadership that has characterized much of the recent advance.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -0.4%; Prior 3.6%

[BRIEFING.COM] The S&P 500 (+0.5%), Nasdaq Composite (+0.4%), and DJIA (+0.3%) remain modestly higher.

Mega-cap stocks outside the semiconductor space are rebounding nicely from recent weakness.

In particular, Meta Platforms (META 551.34, +7.67, +1.41%) leads the communication services sector (+1.0%) higher after a sharp pullback yesterday amid the opening arguments of a child social media addiction case. Tesla (TSLA 347.09, +10.22, +3.03%) and Amazon (AMZN 264.63, +5.18, +1.99%) hold similar gains, contributing to broad strength in the consumer discretionary sector (+1.9%).

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

The health care sector (+2.9%) remains today's top performer, with strong leadership from biotechnology sending the SPDR Biotech (XBI 165.81, +5.70, +3.56%) toward its record high from early 2021 (174.79) after Moderna's (MRNA 143.26, +80.30, +127.54%) reported positive late-stage trial results from a personalized mRNA melanoma therapy.

The sector's largest component, Eli Lilly (LLY 1271.37, +45.64, +3.72%), adds a solid gain of its own, while managed care names are relative underperformers.

[BRIEFING.COM] The stock market is having its best session of the week so far, with the S&P 500 (+0.5%), Nasdaq Composite (+0.4%), and DJIA (+0.5%) holding solid gains just before midday.

There is a notable improvement in breadth today, with advancers outpacing decliners by a roughly 2-to-1 ratio on the NYSE and a roughly 3-to-5 clip on the Nasdaq. Stocks were given a boost just before the open after the U.S. Department of the Treasury announced it will at least double the size of its liquidity-support buyback operations for longer-dated nominal securities beginning September 9. The 30-year note yield is down seven basis points to 4.21%.

Homebuilders and other rate-sensitive stocks are among the outperformers, adding strength to the consumer discretionary sector (+1.9%), which is also supported by solid post-earnings moves from Target (TGT 160.94, +8.46, +5.55%) and Lowe's (LOW 222.15, +6.51, +3.02%).

While solid, those gains pale in comparison to Moderna's (MRNA 141.85, +78.89, +125.30%), which skyrocketed after its experimental cancer vaccine with Merck (MRK 149.62, +14.45, +10.69%) showed positive results. The health care sector is up 3.1%.

Despite several positive catalysts for the market, gains at the index level continue to be limited by weakness across semiconductor stocks, with the PHLX Semiconductor Index down 1.6%.

[BRIEFING.COM] The S&P 500 (+0.7%), Nasdaq Composite (+0.5%), and DJIA (+0.6%) now trade higher across the board as the market's broad strength begins to outweigh weakness across semiconductor stocks.

The PHLX Semiconductor Index (-1.6%) is off its worst levels of the morning, though memory names such as Seagate Tech (STX 843.56, -60.12, -6.65%) and Western Digital (WDC 470.06, -26.10, -5.26%) remain among the worst-performing S&P 500 components.

Elsewhere in the information technology sector (-0.4%), computer hardware names such as Dell (DELL 436.48, -32.17, -6.86%) and Hewlett Packard Enterprise (HPE 52.62, -3.07, -5.51%) are laggards.

[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (-0.1%), and DJIA (+0.5%) have settled into a relatively stable range this morning.

Retailer stocks are a bright spot today after the latest batch of earnings, with the State Street SPDR S&P Retail ETF up 2.1%, and the consumer discretionary sector up 1.5%.

Target (TGT 159.42, +6.94, +4.55%) delivered a much stronger Q2 than investors had reason to expect, with the key distinction being that the quarter was not solely a tariff-refund story. The approximately $1.65 per share refund was clearly a major contributor to the EPS upside. More importantly, the company's merchandising reset appears to be gaining traction, with broad-based category growth and particularly strong performance in Fun 101, Food & Beverage, and Beauty. The bigger question for investors now is whether Target can sustain its improved traffic and merchandising momentum after the tariff benefit rolls off. If the new assortment strategy continues to drive positive comps and margin improvement, today's results could represent an important step in rebuilding confidence in Target's turnaround.

Lowe's (LOW 225.44, +9.80, +4.54%) Q2 results were mixed and, while they did not suggest a broad deterioration in demand, they continued to highlight softer trends across its DIY business and transactions, prompting management to move its full-year outlook to the low end of its prior ranges. However, the positive stock reaction suggests investors may have been braced for a more meaningful reduction given the challenging consumer backdrop. Pro, Online and Home Services continued to provide important offsets, while disciplined expense management helped LOW deliver EPS above management's expectations even excluding the tariff refund benefit.

[BRIEFING.COM] The S&P 500 (+0.2%) and DJIA (+0.2%) hold modest gains amid relatively broad opening strength across equities, though some lingering tech weakness keeps the Nasdaq Composite (-0.1%) lower.

Stocks are supported by some easing in longer-term yields after the U.S. Department of the Treasury announced it will at least double the size of liquidity support buyback operations for longer-dated nominal coupon securities.

Nine S&P 500 sectors trade higher, led by an impressive gain in the health care sector (+3.9%), with Moderna (MRNA 135.84, +72.88, +115.76%) doubling its value after an experimental cancer vaccine with Merck (MRK 150.34, +15.16, +11.22%) produced positive results.

The materials sector (+2.2%) is another standout as precious metal prices move higher, while a solid batch of earnings from large retail names pushes the consumer discretionary sector (+1.1%) higher as well.

Even with the solid gains elsewhere, the PHLX Semiconductor Index (-2.0%) is extending yesterday's slide, pushing the information technology sector 0.7% lower and capping the index level gains.

The S&P 500 futures currently trade 31 points above fair value. 

Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note with South Korea's Kospi (-5.8%) enduring a volatile night. SK Hynix reached a tentative wage agreement with its employees. President Trump said that he wants to meet with North Korea's Leader Kim Jong Un in November. Japanese debt climbed overnight, recovering from early weakness that drove yields on longer-dated JGBs to fresh highs for the year. Moody's affirmed Australia's AAA rating with a Stable Outlook.

• In economic data:
  • Japan's June Core Machinery Orders 9.7% m/m (expected 7.2%; last -12.4%); 16.9% yr/yr (expected 10.8%; last -1.9%)
  • Australia's Q2 Wage Price Index 0.8% qtr/qtr, as expected (last 0.8%); 3.2% yr/yr, as expected (last 3.2%)
  • New Zealand's Q2 Input PPI 2.9% qtr/qtr (expected 1.3%; last 1.4%) and Output PPI 1.6% qtr/qtr (expected 0.8%; last 0.8%)

---Equity Markets---

• Japan's Nikkei: -3.2%
• Hong Kong's Hang Seng: +0.1%
• China's Shanghai Composite: -2.4%
• India's Sensex: -0.4%
• South Korea's Kospi: -5.8%
• Australia's ASX All Ordinaries: -0.2%

Major European indices trade in mixed fashion near their flat lines. The U.K.'s CPI accelerated to 2.9% from 2.6% in July, representing the first acceleration in four months, while Core CPI remained above expectations. European Central Bank policymaker Rehn said that he has not seen clear signs of second-round effects, though he conceded that it is essential to anchor inflation expectations, while ECB President Lagarde said that the region can't miss out on the AI revolution.

• In economic data:
  • Eurozone's July CPI 0.2% m/m, as expected (last -0.1%); 2.9% yr/yr, as expected (last 2.8%). July Core CPI 0.0% m/m, as expected (last 0.2%); 2.5% yr/yr, as expected (last 2.4%). June Current Account surplus EUR35.10 bln (expected surplus of EUR26.8 bln; last surplus of EUR25.1 bln)
  • U.K.'s July CPI 0.3% m/m, as expected (last 0.1%); 2.9% yr/yr, as expected (last 2.6%). July Core CPI 0.2% m/m (expected 0.1%; last 0.3%); 2.6% yr/yr (expected 2.5%; last 2.6%). July Input PPI -1.7% m/m (expected 0.0%; last -1.9%) and Output PPI 0.2% m/m, as expected (last -0.1%)
  • Swiss Q2 Industrial Production 5.5% yr/yr (expected -4.7%; last -7.6%)

---Equity Markets---

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

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

TJX Companies (TJX 142.95, -7.90, -5.2%) beat earnings expectations by $0.17 while revenue was in line with estimates, and guided both Q3 and FY27 EPS above consensus.

Equity futures point to a mixed, subdued opening as lingering tech weakness and rising oil prices continue to weigh on the market.

Crude oil is moving higher again this morning after Financial Times reported that Iran has considered attacking U.S. military assets in Europe if the U.S. escalates the war. While oil is up, U.S. Treasuries remain relatively stable, which is encouraging as recent highs on longer-dated note yields have been a notable headwind for the market in recent sessions.

There is not much economic data for investors to assess this morning, though the FOMC Meeting Minutes from the July FOMC meeting will be released at 3:00 p.m. ET, which will be of particular interest to a market that is undecided on what it believes the Fed's next move will be.

The MBA Mortgage Applications Index for the week ended August 15 decreased 0.4%, from a prior increase of 3.6%.

In corporate news:

• OpenAI revenue grew a somewhat underwhelming 18% in Q2, according to The Wall Street Journal.
• Lowe's (LOW 308.01, -7.63, -3.5%) beat EPS expectations by $0.18, reported revenues on-line, and guided FY27 EPS and revenues below consensus.
• Merk (MRK 146.80, +11.63, +8.6%) and Moderna (MRNA 122.93, +59.97, +95.25) trade higher after Phase 3 INTerpath-001 met its primary endpoint of recurrence-free survival and key secondary endpoint of distant metastasis-free survival in patients with completely resected stage IIB-IV melanoma.
• Target (TGT 151.48, -1.00, -0.7%) beat EPS expectations by $1.76, beat revenue expectations, and guided FY27 EPS above consensus, with revenues above consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note with South Korea's Kospi (-5.8%) enduring a volatile night. Japan's Nikkei: -3.2%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: -2.4%, India's Sensex: -0.4%, South Korea's Kospi: -5.8%, Australia's ASX All Ordinaries: -0.2%.

In news:

• SK Hynix reached a tentative wage agreement with its employees.
• President Trump said that he wants to meet with North Korea's Leader Kim Jong Un in November.
• Japanese debt climbed overnight, recovering from early weakness that drove yields on longer-dated JGBs to fresh highs for the year.
• Moody's affirmed Australia's AAA rating with a Stable Outlook.

In economic data:

• Japan's June Core Machinery Orders 9.7% m/m (expected 7.2%; last -12.4%); 16.9% yr/yr (expected 10.8%; last -1.9%)
• Australia's Q2 Wage Price Index 0.8% qtr/qtr, as expected (last 0.8%); 3.2% yr/yr, as expected (last 3.2%)
• New Zealand's Q2 Input PPI 2.9% qtr/qtr (expected 1.3%; last 1.4%) and Output PPI 1.6% qtr/qtr (expected 0.8%; last 0.8%)

Major European indices trade in mixed fashion near their flat lines. STOXX Europe 600: UNCH, Germany's DAX: -0.1%, U.K.'s FTSE 100: UNCH, France's CAC 40: +0.4%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: +0.1%.

In news:

• The U.K.'s CPI accelerated to 2.9% from 2.6% in July, representing the first acceleration in four months, while Core CPI remained above expectations.
• European Central Bank policymaker Rehn said that he has not seen clear signs of second-round effects, though he conceded that it is essential to anchor inflation expectations, while ECB President Lagarde said that the region can't miss out on the AI revolution.

In economic data:

• Eurozone's July CPI 0.2% m/m, as expected (last -0.1%); 2.9% yr/yr, as expected (last 2.8%). July Core CPI 0.0% m/m, as expected (last 0.2%); 2.5% yr/yr, as expected (last 2.4%). June Current Account surplus EUR35.10 bln (expected surplus of EUR26.8 bln; last surplus of EUR25.1 bln)
• U.K.'s July CPI 0.3% m/m, as expected (last 0.1%); 2.9% yr/yr, as expected (last 2.6%). July Core CPI 0.2% m/m (expected 0.1%; last 0.3%); 2.6% yr/yr (expected 2.5%; last 2.6%). July Input PPI -1.7% m/m (expected 0.0%; last -1.9%) and Output PPI 0.2% m/m, as expected (last -0.1%)
• Swiss Q2 Industrial Production 5.5% yr/yr (expected -4.7%; last -7.6%)

[BRIEFING.COM] Stocks finished broadly lower on Tuesday as a steep reversal across semiconductor and other momentum-oriented stocks outweighed gains in several defensive and commodity-linked areas. The S&P 500 (-0.7%) and Nasdaq Composite (-1.3%) suffered the largest declines, while the DJIA (-0.2%) fared considerably better thanks to its limited semiconductor exposure and strength in several of its defensive components.

Technology was at the center of the retreat. The information technology sector (-1.9%) finished at the bottom of the sector standings as the PHLX Semiconductor Index tumbled 5.0%, erasing yesterday's advance and then some. Memory stocks were among the weakest areas after rallying Monday, while pronounced selling across optical and electronic manufacturing names added to the pressure.

Fabrinet (FN 482.52, -116.06, -19.39%) plunged despite reporting better-than-expected Q4 results and issuing above-consensus Q1 guidance. Although Fabrinet is not an S&P 500 component, related names Lumentum (LITE 873.31, -95.59, -9.87%), Coherent (COHR 306.12, -45.10, -12.84%), and Teradyne (TER 404.29, -38.85, -8.77%) were among the index's worst performers, adding to the weakness across the semiconductor-related trade.

The selloff also spilled into industrial names tied to the semiconductor and AI infrastructure buildout, helping push the industrials sector (-1.5%) firmly lower. Separately, Caterpillar (CAT 840.83, -40.82, -4.63%) was another notable laggard after posting a solid gain yesterday.

Weakness among the market's largest growth stocks added to the pressure, with the Vanguard Mega Cap Growth ETF falling 1.1%. Meta Platforms (META 543.67, -25.30, -4.45%) was a notable laggard and weighed on the communication services sector (-0.6%) as opening arguments began in a child social-media addiction case.

Persistently high borrowing costs remained another obstacle for growth stocks, even as Treasury yields backed away from their highest levels of the morning. The rate backdrop also remained particularly relevant for housing after today's economic data showed a sharp decline in July housing starts and a larger-than-expected drop in pending home sales.

There were still meaningful pockets of strength. The health care (+1.6%) and consumer staples (+1.1%) sectors benefited from the rotation toward defensive stocks, helping the DJIA avoid the steeper losses seen elsewhere. Johnson & Johnson (JNJ 271.12, +8.75, +3.33%) and Coca-Cola (KO 88.82, +1.84, +2.12%) were among the positive contributors, while Amgen (AMGN 425.28, +5.90, +1.41%) rose to a fresh all-time high, extending its advance since the company's Q2 beat-and-raise earlier this month.

On the earnings front, Home Depot (HD 337.67, -0.21, -0.06%) gave up a firm gain following a solid Q2 report in which adjusted earnings, revenue, total comparable sales, and U.S. comps topped expectations. The company nevertheless maintained its FY27 outlook as management continued to point to challenging housing conditions and weakness in larger discretionary projects.

The energy sector (+1.8%) topped the sector standings as crude oil continued its recent climb amid renewed geopolitical uncertainty. WTI crude approached $85 per barrel as the market digested an overnight strike on a cargo ship in the Strait of Hormuz and President Trump's acknowledgment that another ceasefire with Iran is not being pursued. Crude ultimately settled $0.42 higher (+0.5%) at $84.88 per barrel.

The market's underlying tone also deteriorated as the session progressed. Early strength across several sectors had initially kept the broader market relatively insulated from the technology selloff, but the weakness eventually spread, leaving the Russell 2000 (-1.3%) and S&P MidCap 400 (-1.6%) with sizable losses alongside the major averages. Tuesday's session ultimately reflected a pronounced unwind in some of the market's strongest momentum trades, led by semiconductors and related AI infrastructure names. Defensive and energy stocks offered meaningful support, particularly to the DJIA, but elevated rates, higher oil prices, and increasingly broad selling left the market with a considerably weaker finish than the relatively narrow technology-driven decline seen earlier in the day.

U.S. Treasuries staged a modest rebound on Tuesday, but not before opening selling briefly lifted the 30-year yield to a fresh high for the year (5.326%). The 2-year note yield finished unchanged at 4.18%, and the 10-year note yield settled down two basis points to 4.71%. 

• Russell 2000: +21.6% YTD
• S&P Mid Cap 400: +16.6% YTD
• Nasdaq Composite: +13.1% YTD
• S&P 500: +12.4% YTD
• DJIA: +11.0% YTD

• July Housing Starts 1.239 mln (Briefing.com consensus 1.360 mln); Prior was revised to 1.415 mln from 1.427 mln, July Building Permits 1.443 mln (Briefing.com consensus 1.390 mln); Prior was revised to 1.374 mln from 1.367 mln
  • The key takeaway from the report, though, is the broad-based weakness in single-unit starts seen in July, which is a month that featured rising interest rates that increased the cost of financing.
• July Import Prices -0.4%; Prior was revised to -0.3% from 0.3%
• July Import Prices ex-oil 0.4%; Prior was revised to 0.1% from 0.4%
• July Export Prices -1.3%; Prior was revised to -0.7% from -0.6%
• July Export Prices ex-ag. -1.5%; Prior -0.7%
• July Industrial Production 0.2% (Briefing.com consensus 0.3%); Prior was revised to 0.3% from 0.1%, July Capacity Utilization 76.3% (Briefing.com consensus 76.3%); Prior was revised to 76.2% from 76.1%
  • The key takeaway from the report is that gains were registered by all three major industry groups, led by a 0.5% increase in utilities that stemmed from hot weather increasing air-conditioning use.
• July Pending Home Sales -2.3% (Briefing.com consensus 1.3%); Prior was revised to -4.8% from -5.4%