[BRIEFING.COM] The S&P 500 (-0.5%), Nasdaq Composite (-0.7%), and DJIA (-0.8%) remain little changed from previous levels as the market enters the final hour of the session.

After the close, investors are anticipating Broadcom's (AVGO 487.57, +6.00, +1.25%) earnings release, which is arguably the most important earnings release of the week. The stock heads into the Q2 (April) print with momentum and expectations both elevated after management's last update pointed to sharply accelerating AI revenue, stronger networking share gains, and improved visibility into 2027. Shares have rallied over 60% since late March, so investors will likely need more than a routine beat. The key question is whether Broadcom can again support the AI growth narrative. Last quarter, investors focused on the robust Q2 guidance which showed a meaningful acceleration for semiconductor and AI revenue. Investors will be expecting strong Q3 (Jul) guidance.

[BRIEFING.COM] The broader market remains modestly lower after the Fed released its May Beige Book this afternoon. The report showed overall economic activity increased at a slight to moderate pace across most Federal Reserve Districts, though consumer spending remained uneven and increasingly divided by income level. Higher-income households continued to spend despite higher prices, while middle and lower-income consumers faced growing affordability pressures, leading to increased credit card usage, fewer retail visits, and stronger demand for necessities. Auto sales softened due to higher vehicle and fuel costs, while manufacturing activity improved across most Districts. Banking conditions remained generally stable, although rising delinquencies in residential mortgages, consumer loans, and agricultural lending were noted in several regions. Agriculture remained under pressure from higher fuel and fertilizer costs, while energy activity increased modestly but producers remained cautious amid ongoing uncertainty. Business outlooks for the next six months were little changed, as elevated uncertainty and signs of weakening consumer demand weighed on sentiment. Currently, the S&P 500 (-0.49%) is in "first" place, only down 37 points with more aggressive losses being had elsewhere.

Overall, economic expectations were largely unchanged, with businesses citing persistent uncertainty and softer consumer demand as key factors limiting confidence in future growth.

• Employment: Employment was largely unchanged across Districts, with manufacturing providing the strongest hiring support. Hiring remained selective and focused on critical roles, while wage growth stayed modest to moderate amid ongoing economic uncertainty.
• Prices: Prices increased at a moderate-to-strong pace, with higher energy costs driving inflation across shipping, groceries, packaging, and fertilizer. Rising input costs continued to outpace selling prices, putting pressure on margins and limiting firms' ability to pass through higher expenses.

Currently, the yield on the benchmark 10-yr Treasury note is little changed following the Beige Book release, is up five basis points to 4.492%.

[BRIEFING.COM] With about two hours to go on Wednesday the tech-heavy Nasdaq Composite (-0.80%) is underperforming, down about 217 points.

Gold futures settled $53.00 lower (-1.2%) at $4,466.90/oz, as rising Treasury yields and a stronger U.S. dollar pressured bullion prices. Investors also weighed the inflationary impact of higher oil prices and growing expectations that the Federal Reserve could keep interest rates elevated for longer.

Meanwhile, the U.S. Dollar Index is about +0.3% higher to $99.53.

[BRIEFING.COM] The Dow Jones Industrial Average (-0.85%) is in second place on Wednesday afternoon, down about 434 points.

A look inside the DJIA shows that IBM (IBM 306.25, -22.98, -6.98%), Salesforce (CRM 191.98, -8.86, -4.41%), and Microsoft (MSFT 425.05, -16.26, -3.68%) are underperforming.

Meanwhile, Walmart (WMT 117.02, +3.96, +3.50%) is solidly higher.

The DJIA is -0.3% lower week-to-date.

[BRIEFING.COM] The major averages are retreating from yesterday's record highs, with the S&P 500 (-0.6%), Nasdaq Composite (-1.0%), and DJIA (-0.8%) hovering near session lows early in the afternoon. Tech and mega-cap names are under pressure, while a spike in oil prices weighs on other pockets of the market.

Crude oil is currently up $1.93 (+2.1%) to $95.69 per barrel following reports this morning that the U.S. and Iran exchanged fresh strikes, further testing the limits of the tenuous ceasefire. Treasury yields are higher across the curve.

The energy sector (+2.3%) holds the widest gain across S&P 500 sectors, while the defensive consumer staples (+1.2%) and health care (+1.1%) sectors also garner some buying interest amid the retreat in growth stocks today.

To that end, the top-weighted information technology sector (-1.6%) is today's worst performer after driving this week's push further into record territory. Chipmakers are still providing solid leadership with the PHLX Semiconductor Index up 1.1%, though NVIDIA (NVDA 216.08, -6.74, -3.02%) is a laggard amid a tough day for mega-cap stocks.

Microsoft (MSFT 424.74, -16.57, -3.75%) holds a similar loss, adding to the sustained pressure across software names, which has the iShares GS Software ETF down 4.4% after a 2.8% slide yesterday.

Amazon (AMZN 248.46, -8.06, -3.14%) is also under pressure, providing poor leadership for the consumer discretionary sector (-1.5%).

Elsewhere in the sector, Ulta Beauty (ULTA 473.14, -21.73, -4.39%) moves lower despite a relatively strong earnings report.

The financials sector (-1.1%) rounds out the worst-performing S&P 500 sectors, with considerable weakness across commercial services names such as Global Payments (GPN 66.64, -7.40, -9.99%) and Block (XYZ 69.75, -4.40, -5.93%).

Outside of the S&P 500, the Russell 2000 (-1.5%) lags amid the spike in Treasury yields, while the S&P Mid Cap 400 (-0.2%) holds a more modest loss.

Overall, today's weakness appears more reflective of profit-taking and geopolitical uncertainty than a wholesale shift in market sentiment. While higher oil prices and yields have pressured growth-oriented areas, continued leadership from semiconductor stocks suggests investors remain willing to buy select pockets of strength beneath the surface. At the same time, some of the weakness across mega-cap technology stocks may reflect investors raising cash ahead of several notable upcoming technology IPOs, adding another headwind for the market's largest companies.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -2.5%; Prior -8.5%
• May ADP Employment Change 122K (Briefing.com consensus 110K); Prior was revised to 105K from 109K
• May S&P Global U.S. Services PMI - Final 50.7; Prior 50.9
• April Factory Orders 4.8% (Briefing.com consensus 3.5%); Prior was revised to 1.8% from 1.5%
  • The key takeaway from the report is that the headline numbers masked a weak month for business spending, evidenced by the 1.0% decline in nondefense capital goods orders, excluding aircraft. To be fair, that decline followed a very strong 3.8% increase in March, so it could just be a natural pullback after a large increase.
• May ISM Non-Manufacturing Index 54.5% (Briefing.com consensus 53.6%); Prior 53.6%
  • The key takeaway from the report is the understanding that activity for the country's largest business sector picked up pace in May, notwithstanding higher prices that were reflected in the highest average 12-month reading (68%) since April 2023.

[BRIEFING.COM] The S&P 500 (-0.7%), Nasdaq Composite (-1.0%), and DJIA (-0.8%) continue to drift lower just after midday.

Alphabet announced the pricing of its previously announced registered public offerings of Class A Common Stock, Class C Capital Stock and depositary shares representing interests in mandatory convertible preferred stock. The gross proceeds of these offerings, together with potential gross proceeds of Alphabet's previously announced $40 billion at-the-market offering program for the sale of Class A Common Stock and Class C Capital Stock over time, and concurrent $10 billion private placement, represent a total equity raise of $84.75 billion. The equity capital raise was upsized from the previously announced total equity raise of $80 billion.

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

The consumer staples sector (+1.1%) is one of today's better performers, bouncing back from weakness in the previous two sessions this week that leave it now just slightly lower for the week. Bunge (BG 134.52, +5.39, +4.17%) is a top mover following yesterday's reduction of tariffs on agricultural equipment, while Walmart (WMT 116.67, +3.61, +3.19%) provides solid leadership. Meanwhile, Dollar General (DG 103.28, -2.99, -2.81%) continues to move lower following its earnings release.

[BRIEFING.COM] The S&P 500 (-0.5%), Nasdaq Composite (-0.7%), and DJIA (-0.8%) trade in a stable range near session lows just before midday.

Strength in the broader market is mixed, with four S&P 500 sectors trading lower. That somewhat belies the relatively weak participation under the surface, as decliners outpace advancers by a greater than 2-to-1 ratio on both the NYSE and the Nasdaq.

The information technology sector (-1.1%) is one of today's underperformers, which weighs on the major averages. Software stocks are seeing an extension of yesterday's slide, and while the PHLX Semiconductor Index (+1.3%) has reversed its earlier loss, NVIDIA (NVDA 216.03, -6.79, -3.05%) still provides poor leadership. Other mega-cap names are also under pressure, with five of the "magnificent seven" stocks trading lower, weighing on the consumer discretionary (-0.7%) and communication services (-0.4%) sectors, and pushing the Vanguard Mega Cap Growth ETF 0.8% lower.

Elsewhere, the financials sector (-1.7%) holds the widest loss, with payment platform names such as Global Payments (GPN 65.29, -8.74, -11.81%) moving sharply lower.

Outside of the S&P 500, the Russell 2000 (-0.9%) underperforms, while the S&P Mid Cap 400 (+0.1%) trades slightly higher.

[BRIEFING.COM] The major averages continue to chart new session lows.

Palo Alto Networks (PANW 280.96, -16.22, -5.46%) is trading lower despite delivering a clean Q3 (Apr) beat and upside Q4 (Jul) guidance, suggesting that expectations were really high heading into the report. The stock had run roughly 60% since early May. Also, the guidance for metrics like RPO and NGS ARR were perhaps good but not great as they now include the recent CyberArk and Chronosphere acquisitions.

Meanwhile, Ulta Beauty (ULTA 467.02, -27.86, -5.63%) is slipping despite a strong Q1 beat as investors appear to be focusing on the limited flow-through to the full-year outlook after a better-than-expected quarter. ULTA reported EPS of $7.74 on revenue of $3.16 billion, with comparable sales up 5.3% as both traffic and average ticket increased. However, full-year revenue guidance was reaffirmed at roughly $13.14-13.26 billion, while EPS guidance, though raised from $28.05-28.55 to $28.36-28.80, remained essentially in line with consensus. Management also maintained a measured tone, citing macro uncertainty, inflation pressure, and a more value-focused consumer.

[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.5%), and DJIA (-0.7%) remain firmly lower as weakness in technology outweighs mixed strength in the broader market.

The ISM Services PMI increased to 54.5% in May (Briefing.com consensus: 53.6%) from 53.6% in April. The dividing line between expansion and contraction is 50.0%, so the May reading reflects services sector activity growing at a faster pace than the prior month.

The key takeaway from the report is the understanding that activity for the country's largest business sector picked up pace in May, notwithstanding higher prices that were reflected in the highest average 12-month reading (68%) since April 2023.


Factory orders increased 4.8% month-over-month in April (Briefing.com consensus: 3.5%) following an upwardly revised 1.8% increase (from 1.5%) in March. Excluding transportation, factory orders increased 1.3% on the heels of a 1.8% increase in March. Shipments of manufactured goods were up 1.0% after increasing 1.5% in March.

The key takeaway from the report is that the headline numbers masked a weak month for business spending, evidenced by the 1.0% decline in nondefense capital goods orders, excluding aircraft. To be fair, that decline followed a very strong 3.8% increase in March, so it could just be a natural pullback after a large increase.

[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.5%), and DJIA (-0.6%) are retreating from their record-high levels this morning as tech names face some profit-taking after their recent run.

The information technology sector (-1.4%) is one of just three S&P 500 sectors that trades lower, currently holding the widest loss. Software names are under pressure again today, with the iShares GS Software ETF down 3.9%. Palo Alto Networks (PANW 279.31, -17.87, -6.01%) lags despite topping earnings estimates.

Meanwhile, the PHLX Semiconductor Index (+0.4%) is up modestly. NVIDIA (NVDA 216.95, -5.87, -2.63%) is a mega-cap laggard amid a weak day for many of the market's largest names, with the Vanguard Mega Cap Growth ETF down 0.7%.

Elsewhere, the financials sector (-0.8%) is also under pressure, with particular weakness across asset managers, while the defensive utilities (+1.2%) and consumer staples (+1.2%) sectors are outperforming.

On the data front, the final May S&P Global Services PMI came in at 50.7, down from the prior reading of 50.9.

Factory orders increased 4.8% month-over-month in April (Briefing.com consensus: 3.5%) following an upwardly revised 1.8% increase (from 1.5%) in March.

The ISM Services PMI expanded to 54.5% in May (Briefing.com consensus: 53.6%) from 53.6% in April.

The stock market is on track for a mostly lower open this morning as oil prices continue to drift higher.

Semiconductor stocks, which helped drive yesterday's push to record highs, are mostly higher in premarket trading. However, the group's relatively narrow leadership has prompted some concerns that semiconductors may be becoming overextended, while mega-cap technology stocks are increasingly being viewed as a potential source of funds for several large upcoming IPOs.

The S&P 500 futures currently trade 13 points below fair value. 

Equity indices in the Asia-Pacific region had a mixed showing on Wednesday that mirrored the mixed final Services PMI numbers for May for many countries in the region. Japan's Nikkei stood out from the pack, surging 2.5% to a record high on the strength of tech stocks. The Nikkei managed to trade around speculation of an impending rate hike, as well as rising oil prices, which acted as a drag on India's Sensex. Australia's ASX All Ordinaries managed a modest gain in the wake of some weaker-than-expected Q1 GDP data. South Korea's KOSPI was closed for election day.

• In economic data:
  • China's May RatingDog Services PMI 54.4 (expected 52.3; last 52.6)
  • Japan's May S&P Global Services PMI 50.0 (expected 50.0; last 50.0)
  • Australia's May S&P Global Services PMI 48.7 (expected 47.7; last 50.7); Q1 GDP 0.3% qtr/qtr (expected 0.5%; last 0.9%) and 2.5% yr/yr (expected 2.7%; last 2.5%); May AIG Manufacturing Index -22.4 (last -27.5)
  • India's May HSBC Services PMI 59.8 (expected 58.9; last 58.8)
  • Hong Kong's May S&P Global Manufacturing PMI 50.4 (last 48.6)

---Equity Markets---

• Japan's Nikkei: +2.5%
• Hong Kong's Hang Seng: -1.6%
• China's Shanghai Composite: +0.2%
• India's Sensex: -0.4%
• South Korea's KOSPI: closed for holiday
• Australia's ASX All Ordinaries: +0.6%

Major European indices are mostly lower, feeling the weight of rising oil prices tied to renewed hostilities between the U.S. and Iran and a USTR proposal to impose added tariffs of 10.0% to 12.5% for as many as 60 countries, including those in the European Union, due to findings of using forced labor to make goods for export. Final Services PMI readings for May were better than expected, but still below 50.0, which is the demarcation line between expansion and contraction. The better-than-expected prints are contributing to expectations that the ECB will vote to raise its key policy rates this month.

• In economic data:
  • Eurozone's May HCOB Services PMI 47.7 (expected 46.4; last 47.6); April PPI 0.6% m/m (expected 0.6%; last 3.4%) and 4.9% yr/yr (expected 4.8%; last 2.0%)
  • Germany's May HCOB Services PMI 48.1 (expected 47.8; last 46.9)
  • U.K.'s May S&P Global Services PMI 49.3 (expected 47.9; last 52.7)
  • Spain's May HCOB Services PMI 50.1 (expected 48.2; last 47.9)
  • Italy's May HCOB Services PMI 49.4 (expected 49.2; last 49.8)
  • France's May HCOB Services PMI 44.3 (expected 42.9; last 46.5)

---Equity Markets---

• STOXX Europe 600: -0.5%
• Germany's DAX: -0.9%
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: -0.3%
• Italy's FTSE MIB: -0.4%
• Spain's IBEX 35: +0.2%

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

Just released, the ADP Employment Change Report showed 122,000 private sector payrolls added in May (Briefing.com consensus 110,000), up from the downwardly revised prior increase of 105,000 (from 109,000). Pay was up 4.4 percent year-over-year.

Equity futures point to a lower opening this morning after the major averages finished mostly higher yesterday, with the S&P 500 notching its ninth straight winning session. Geopolitical developments were relatively muted yesterday, while renewed hostilities between the U.S. and Iran have oil prices and Treasury yields moving higher this morning.

NBC News reports that Iran launched multiple rocket and drone attacks in the Persian Gulf, and the U.S. conducted self-defense strikes on Iran's Qeshm Island, placing additional pressure on the fragile ceasefire. Crude oil is currently up $1.96 (+2.1%) to $95.72 per barrel.

Even still, semiconductor names are poised for an extension of yesterday's gains that drove the push to record highs.

On the data front, the MBA Mortgage Applications Index for the week ended May 30 decreased 2.5%, from a prior decrease of 8.5%.

In corporate news:

• Open AI CEO Sam Altman will visit the White House today, according to Politico.
• SpaceX (SPCX) is aiming to set the IPO price at $135 per share, according to Reuters.
• Palo Alto Networks (PANW 289.51, -7.67, -2.6%) beat EPS expectations by $0.06, beat revenue expectations, and guided Q4 EPS and revenues above consensus.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mixed showing on Wednesday that mirrored the mixed final Services PMI numbers for May for many countries in the region. Japan's Nikkei: +2.5%, Hong Kong's Hang Seng: -1.6%, China's Shanghai Composite: +0.2%, India's Sensex: -0.4%, South Korea's KOSPI: closed for holiday, Australia's ASX All Ordinaries: +0.6%.

In news:

• Japan's Nikkei stood out from the pack, surging 2.5% to a record high on the strength of tech stocks.
• The Nikkei managed to trade around speculation of an impending rate hike, as well as rising oil prices, which acted as a drag on India's Sensex.
• Australia's ASX All Ordinaries managed a modest gain in the wake of some weaker-than-expected Q1 GDP data.
• South Korea's KOSPI was closed for election day.

In economic data:

• China's May RatingDog Services PMI 54.4 (expected 52.3; last 52.6)
• Japan's May S&P Global Services PMI 50.0 (expected 50.0; last 50.0)
• Australia's May S&P Global Services PMI 48.7 (expected 47.7; last 50.7); Q1 GDP 0.3% qtr/qtr (expected 0.5%; last 0.9%) and 2.5% yr/yr (expected 2.7%; last 2.5%); May AIG Manufacturing Index -22.4 (last -27.5)
• India's May HSBC Services PMI 59.8 (expected 58.9; last 58.8)
• Hong Kong's May S&P Global Manufacturing PMI 50.4 (last 48.6)

Major European indices are mostly lower, feeling the weight of rising oil prices tied to renewed hostilities between the U.S. and Iran and a USTR proposal to impose added tariffs of 10.0% to 12.5% for as many as 60 countries, including those in the European Union, due to findings of using forced labor to make goods for export. STOXX Europe 600: -0.5%, Germany's DAX: -1.1%, U.K.'s FTSE 100: -0.4%, France's CAC 40: -0.4%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: +0.3%.

In news:

• Final Services PMI readings for May were better than expected, but still below 50.0, which is the demarcation line between expansion and contraction.
• The better-than-expected prints are contributing to expectations that the ECB will vote to raise its key policy rates this month.

In economic data:

• Eurozone's May HCOB Services PMI 47.7 (expected 46.4; last 47.6); April PPI 0.6% m/m (expected 0.6%; last 3.4%) and 4.9% yr/yr (expected 4.8%; last 2.0%)
• Germany's May HCOB Services PMI 48.1 (expected 47.8; last 46.9)
• U.K.'s May S&P Global Services PMI 49.3 (expected 47.9; last 52.7)
• Spain's May HCOB Services PMI 50.1 (expected 48.2; last 47.9)
• Italy's May HCOB Services PMI 49.4 (expected 49.2; last 49.8)
• France's May HCOB Services PMI 44.3 (expected 42.9; last 46.5)

[BRIEFING.COM] The stock market charted a mostly higher finish today, with the S&P 500 (+0.1%) and DJIA (+0.5%) extending their push into record territory, while the Nasdaq Composite's (flat) marginally higher finish resulted in a record closing high for the index. Today's action was driven by a rally across semiconductor and other AI-related names and a rebound across the broader market following yesterday's narrow tech leadership, though weakness across some of the market's largest names limited gains at the index level.

Alphabet (GOOG 358.39, -14.19, -3.81%) was a notable laggard, moving lower after announcing an $80 billion equity capital raise to fund the rapid expansion of its AI infrastructure footprint. While concerns around dilution and unprecedented capital spending hampered the stock, and the communication services sector (-2.6%), the market treated the news as a meaningful positive for several AI supply chain and data center beneficiaries.

Optical stocks such as Coherent (COHR 426.89, +63.99, +17.63%) and Lumentum (LITE 1029.15, +124.15, +13.72%) were among the best-performing S&P 500 names, while Corning (GLW 200.40, +23.70, +13.41%) also posted a double-digit gain.

Though not a component of the S&P 500, Marvell (MRVL 290.79, +71.36, +32.52%) rocketed to record highs after NVIDIA (NVDA 222.82, -1.54, -0.69%) CEO Jensen Huang delivered a rare and powerful endorsement at Computex in Taipei, calling Marvell the "next trillion-dollar company."

All told, the PHLX Semiconductor Index finished 5.9% higher, which helped balance out a 2.8% slide in the iShares GS Software ETF as software stocks retreated from yesterday's highs.

The information technology sector (+0.9%) finished the day firmly higher.

Elsewhere in the sector, Hewlett Packard Enterprise (HPE 56.14, +9.14, +19.45%) was a standout after an impressive beat-and-raise earnings report.

Meanwhile, the utilities sector (+1.9%) rebounded nicely from its weak showing yesterday, buoyed by Alphabet's assertion that it needs more compute capacity and the power to generate it.

Other outperformers include the materials sector (+1.2%), which was supported by leadership in steel names after the White House adjusted some tariffs on metals, and the industrials sector, which benefited similarly from a reduction of tariffs on agricultural equipment to 15% from 25%, with Deere (DE 579.25, +36.82, +6.79%) and Caterpillar (CAT 909.81, +44.45, +5.14%) both capturing solid gains.

Elsewhere, the energy sector (+1.0%) notched a similar gain as oil prices drifted higher throughout the session. Developments on the U.S.-Iran front were relatively muted today, though Israel has continued strikes in Lebanon.

In addition to the communication services sector (-2.6%), the health care sector (-1.0%) extended its slide, while the consumer discretionary sector (-0.7%) also lagged.

Outside of the S&P 500, the Russell 2000 (+0.9%) and S&P Mid Cap 400 (+0.9%) outperformed.

Overall, today's session underscored the market's continued confidence in the AI infrastructure theme, with capital flowing into semiconductor, optical, networking, and power-related names. That broadening AI trade helped offset weakness in several mega-cap stocks and supported another push deeper into record territory for the major averages.

U.S. Treasuries saved their best for the overnight trade, garnering support from sliding oil prices and an early indication that the U.S. stock market would open today's session with a negative bias. The gains seen overnight, however, would largely be retraced during the cash session when both oil prices and stock prices reversed course from their overnight disposition. The 2-year note yield finished unchanged at 4.05%, and the 10-year note yield settled down three basis points to 4.45%.

• Russell 2000: +18.1% YTD
• Nasdaq Composite: +16.6% YTD
• S&P Mid Cap 400: +13.6% YTD
• S&P 500: +11.2% YTD
• DJIA: +6.8% YTD

Reviewing today's data:

• April JOLTS-Job Openings 7.618 million versus upwardly revised 6.887 million (from 6.866 million) for March