[BRIEFING.COM] The market has settled down (relatively speaking) after a topsy-turvy start. Coincidentally, Treasury yields have settled down after a fast rise this morning, spending the better part of the past 90 minutes in a sideways range that has had the 10-yr note yield stuck around 4.73%.

The move in the 10-yr note yield slowed the stock market's early momentum, and once again it has not had favorable vibes for the housing market, as a rising 10-yr note yield is pressuring mortgage rates higher.

The iShares Dow Jones US Home (ITB 94.19, -1.28, -1.34%) and SPDR S&P Homebuilders ETF (XHB 103.61, -0.91, -0.87%) are both on the defensive today. 

[BRIEFING.COM] The early trade today has seen some seesaw action. Opening buying interest was quickly met with a move to fade the strength. In the process, the S&P 500 went from 7,489 to 7,399, stopping nearly on top of the 7,400 level that has been an important line in the sand for traders.

The S&P 500 has gotten a technical charge with the test of 7,400 and is back challenging 7,450.

Today's advance, however, continues to be narrowly based. The strength is concentrated in a handful of large stocks. The equal-weighted S&P 500 is down 0.5%, while the Russell 2000 is down 0.9%.

[BRIEFING.COM] The S&P 500 consumer discretionary sector is up 5.3%. The kicker is that the vast majority of the stocks in the sector are trading lower. The difference maker is the biggest consumer discretionary stock by market cap weight. That being Amazon (AMZN 269.90, +34.40, +14.61%), which is soaring after its report, not so much because of all the shopping on Amazon but because of all the interest in its AWS Cloud business, which delivered the best quarter of year-over-year growth (+36.7%) in 18 quarters.

Amazon is a story unto itself. The rest of the market is running into some difficulty with higher oil prices (WTI +1.9% to $85.17/bbl) and rising Treasury yields. Oh, and there is also the matter of Apple (AAPL 302.76, -30.66, -9.20%) being down 9% after issuing disappointing fiscal Q4 revenue guidance.

Strikingly, the S&P 500 energy sector (-1.2%) is among the biggest losers today despite the jump in oil prices. That is owed largely to Exxon Mobil (XOM 152.73, -4.24, -2.70%), which came up shy of Q2 EPS estimates. Fellow heavyweight Chevron (CVX 192.34, +0.03, +0.02%) is flat despite topping analysts' expectations for the second quarter.

Generally weak market conditions show up in an advance-decline line at the NYSE and Nasdaq that favors decliners by a better than 2-to-1 margin.

[BRIEFING.COM] The major indices had a bounce in their step at the opening bell, riding the momentum of Amazon (AMZN 268.54, +33.04, +14.03%) and the semiconductor stocks. That momentum helped the indices overcome an ugly start for Apple (AAPL 305.22, -28.20, -8.46%), which disappointed with its fiscal Q4 revenue outlook.

The weight of Apple is showing up in the information technology sector (-0.9%), but the real drag on the market today may just be rising Treasury yields. The 10-yr note yield has advanced to 4.73%, up seven basis points from yesterday's cash settlement. That move has slowed the stock market's charge.

Like yesterday, sector performance is pretty lopsided between winners and losers. Currently, there are only three S&P 500 sectors trading higher: consumer discretionary (+5.2%), communication services +1.8%), and industrials (+0.3%).

The materials sector (-2.7%) is the biggest loser, with Corteva (CTVA 81.49, -7.84, -8.78%), Linde plc (LIN 476.78, -31.86, -6.26%), and FMC Corp (FMC 11.23, -0.60, -5.07%) leading that decline.

Compensation costs for civilian workers increased 0.9 percent (Briefing.com consensus: 0.8%), seasonally adjusted, for the 3-month period ending in June 2026, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 0.9 percent and benefit costs increased 1.0 percent from March 2026.

Compensation costs for civilian workers were also up 0.9% for the 3-month period ending in March 2026.

Microsoft (MSFT) and the semiconductor stocks put a bullish charge in the equity market yesterday, and it looks this morning as if it will be Amazon (AMZN) and the semiconductor stocks that will put a bullish charge in it when the opening bell rings. AMZN is up 11% after its better-than-expected report, and the VanEck Semiconductor ETF (SMH) is up 2.8%.

These gains have been foundational for the equity futures market, which is trading with a bullish bias that has the cash indices on track for a nicely higher open. It is a rather remarkable show of resilience considering oil prices are up (WTI +1.7% to $85.02/bbl), Treasury yields are rising, and Apple is down 8% following some disappointing fiscal Q4 revenue guidance stemming from supply constraints.

Nonetheless, the momentum factor is flowing after South Korea's Kospi soared 17.9% in Friday's trade and the Bank of Japan refrained from raising its official rate at Friday's policy meeting, as expected. There was some conjecture that the BOJ might raise its official rate to accentuate yesterday's intervention effort by Japan to strengthen the yen. The concern was that a surprise rate hike could trigger a disorderly unwinding of yen-based carry trades, but alas, that has not happened. Japan's Nikkei surged 4.0%.

Today's data releases include the Q2 Employment Cost Index at 8:30 a.m. ET, the Chicago PMI for July at 9:45 a.m. ET, and the final University of Michigan Consumer Sentiment Index for July at 10:00 a.m. ET.

In corporate news:

• Amazon (AMZN 262.22, +26.72, +11.4%): Amazon reports Q2 (Jun) results, beats on revs; AWS segment sales increased 37% yr/yr to $42.2 bln; expects to spend approximately $220 bln in CapEx in 2026, up from its prior estimate of $200 bln
• Apple (AAPL 307.95, -25.48, -7.6%): Apple beats by $0.13 including impact of tariff refunds, reports revs in-line; guides Q4 (Sep) revenues below consensus; expects the impact from supply constraints to increase significantly sequentially
• Coinbase (COIN 155.48, -8.10, -5.0%): reports Q2 (Jun) results, misses on revs; Provides Q3 outlook, including Subscription & Services revenue of $500-$800 mln
• ExxonMobil (XOM 155.77, -1.20, -0.8%): misses by $0.04
• Reddit (RDDT 154.00, -24.04, -13.5%): beats by $0.30, beats on revs; Daily Active Uniques ('DAUq') increased 18% year-over-year to 130.3 million

Reviewing overnight developments;

Equity indices in the Asia-Pacific region ended the week on a higher note with South Korea's Kospi (+17.9%) reclaiming the bulk of this week's loss. Japan's Nikkei: +4.0%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: +0.7%, India's Sensex: +0.2%, South Korea's Kospi: +17.9%, Australia's ASX All Ordinaries: +0.2%.

In news:

• China is expected to accelerate government spending during the second half of the year.
• Investors learned that Japan, South Korea, and the U.S. intervened in the foreign exchange market yesterday, helping the yen rise off this year's low against the dollar.
• Tesla is considering a sale of its China business, according to The Wall Street Journal.
• The Bank of Japan left its policy rate at 1.00%, as expected, noting that risks to prices remain skewed to the upside.

In economic data:

• China's July Manufacturing PMI 49.2 (expected 50.1; last 50.3) and July Non-Manufacturing PMI 49.0 (expected 50.0; last 50.2)
• Japan's July Tokyo CPI 2.0% yr/yr (last 1.7%) and Tokyo Core CPI 1.9% yr/yr (expected 1.8%; last 1.6%). June Retail Sales 0.5% yr/yr (expected 3.1%; last 5.0%), June Industrial Production 1.3% m/m (expected 1.0%; last 0.1%). June Housing Starts 18.6% yr/yr (expected 12.7%; last 33.9%) and Construction Orders 2.3% yr/yr (last -6.7%)
• South Korea's June Retail Sales 2.7% m/m (last 0.1%). June Industrial Production 6.4% m/m (expected 3.0%; last -2.9%); 5.8% yr/yr (expected 2.5%; last -1.1%). June Service Sector Output 0.7% m/m (last 1.0%)
• Hong Kong's Q2 GDP -0.6% qtr/qtr (expected -0.3%; last 2.9%); 4.3% yr/yr (expected 4.8%; last 5.9%)
• Australia's Q2 PPI 1.3% qtr/qtr (expected 0.5%; last 0.4%); 3.6% yr/yr (last 3.0%). June Private Sector Credit 0.8% m/m (expected 0.6%; last 0.7%) and June Housing Credit 0.6% m/m (last 0.6%)
• Singapore's July Bank Lending SGD931.4 bln (last SGD917.7 bln). Q2 Unemployment Rate 2.0% (last 2.0%) and Q2 Business Expectations 12.00 (last 17.00)

Major European indices are looking for a higher finish to the week, benefiting from the overall sentiment improvement over the past 24 hours. STOXX Europe 600: +0.7%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.8%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.6%.

In news:

• Eurozone's flash CPI for July showed an acceleration in the year-over-year rate to 2.9% from 2.8% while Core CPI accelerated to 2.5% from 2.4%.
• British bank Natwest is up about 5% after reporting earnings while apparel retailer Puma is down after its results showed slowing demand.

In economic data:

• Eurozone's flash July CPI 2.8% m/m (last -0.1%); 2.9% yr/yr, as expected (last 2.8%). Flash July Core CPI 0.0% m/m (last 0.2%); 2.5% yr/yr (expected 2.4%; last 2.4%)
• Germany's July Unemployment Change 6,000 (expected 5,000; last -1,000) and Unemployment Rate 6.4% (expected 6.3%; last 6.3%)
• U.K.'s July Nationwide HPI 0.1% m/m, as expected (last 0.0%); 1.8% yr/yr (expected 1.9%; last 2.2%)
• France's flash July CPI 0.6% m/m (expected 0.3%; last -0.3%); 2.1% yr/yr (last 1.8%). June PPI -0.6% m/m (last -0.2%); 2.6% yr/yr (last 3.1%)
• Italy's July Business Confidence 89.6 (expected 88.9; last 88.6) and Consumer Confidence 94.2 (expected 92.5; last 92.4). Flash July CPI 0.2% m/m (expected 0.3%; last 0.0%); 2.8% yr/yr, as expected (last 3.0%)
• Spain's May Current Account surplus EUR1.84 bln (last EUR1.88 bln)Swiss June Retail Sales 1.5% yr/yr (expected 3.1%; last 3.4%)

[BRIEFING.COM] Today was more than a buy-the-dip trade. It was a return to the AI trade. The impetus for the return was rooted in earnings results and guidance from Microsoft (MSFT 451.10, +60.56, +15.51%) and Lam Research (LRCX 297.72, +45.37, +17.98%), which triumphed over all other corporate news. Arguably, a CNBC report that hedge fund Situational Awareness was forced to sell its entire book of public investments due to steep losses in its AI investments also acted as a catalyst for the rebound, as this news was viewed by some to be a "clearing event" for an AI trade that had been looking rather wobbly leading up to today's session.

Whatever the case may have been, there is no denying that Microsoft and the semiconductor stocks carried the stock market today.

Microsoft's move was gargantuan and far-reaching, impacting the Dow Jones Industrial Average, Nasdaq 100, and S&P 500 information technology sector (+5.2%) in a favorable light and providing a welcome distraction from the disappointments out of Meta Platforms (META 539.03, -46.58, -7.95%), Qualcomm (QCOM 151.54, -4.14, -2.66%), and Norwegian Cruise Line (NCLH 18.72, -2.04, -9.81%), to name a few, and the ongoing clash between the U.S. and Iran.

The Philadelphia Semiconductor Index soared 8.2%.

Most of the morning trade was simply a tech sector show, but buying efforts began to broaden out in the afternoon trade, sending the major indices to new session highs. The added lift was fueled by resurgences for the industrials (+1.0%), financial (+0.6%), and energy (+0.6%) sectors, all of which had been in negative territory earlier in the day. The consumer discretionary sector (+1.6%) was the next best-performing sector after information technology.

Conversely, the main pockets of weakness today were seen in the communication services (-2.5%), consumer staples (-2.2%), health care (-1.7%), and real estate (-1.2%) sectors.

It helped, too, that bond yields remained calm after a tough session yesterday. The 10-yr note yield hit 4.71% overnight but settled at 4.66% with oil prices pulling back, PCE inflation decelerating in June on a year-over-year basis, and Q2 GDP increasing a weaker-than-expected 1.5%.

There was still plenty of chatter in the market, though, about inflation remaining sticky well above the Fed's 2.0% target and the Fed's inflation-fighting credibility after it refrained from raising the target range for the fed funds rate yesterday. The Bank of England did as well today, voting 6 to 3 to leave its key bank rate unchanged at 3.75%.

The Bank of Japan will issue a policy announcement overnight. It is expected to leave its key policy rate unchanged at 1.00%, so it would be a surprise if the bank announced a rate hike. There was some notable strengthening in the yen today against the dollar (USD/JPY -2.5% to 159.36) ahead of the decision, prompting speculation that there was an official intervention effort on the part of Japan's government to strengthen the currency.

The U.S. market, though, traded in its own bubble (no pun intended), relishing the strength of many of its mega-cap leaders, including Amazon (AMZN 235.50, +8.85, +3.90%), which reports its results after the close. Apple (AAPL 333.43, -4.76, -1.41%) does, too, but it sat out today's advance, having made a solid move already in recent weeks leading up to its report.

• Russell 2000: +18.7% YTD
• S&P Mid Cap 400: +13.9% YTD
• DJIA: +8.6% YTD
• S&P 500: +8.6% YTD
• Nasdaq Composite: +8.1% YTD

Reviewing today's data:

• The Advance Q2 GDP report showed real GDP increasing at an annual rate of 1.5% (Briefing.com consensus: 2.3%) on the heels of a 2.1% increase for Q1. The GDP Price Index increased by a whopping 6.3% (Briefing.com consensus: 3.7%) following a 3.6% increase in Q1.
  • While the headline GDP print is a bit disappointing, it is not as soft as it appears knowing that net exports subtracted 1.01 percentage points. The bright spot was the pickup seen in personal spending (+3.2% from +0.5%) and final sales to private domestic purchasers (+3.9% from +1.7%).
• Initial jobless claims for the week ending July 25 increased by 9,000 to 197,000 (Briefing.com consensus: 203,000). Continuing jobless claims for the week ending July 18 decreased by 7,000 to 1.782 million.
  • The key takeaway from the report is initial claims remaining below 200,000, which is an historically low level and indicative of a solid labor market where layoff activity is quite low.
• Personal income increased 0.2% month-over-month in June (Briefing.com consensus: 0.3%), personal spending jumped 0.3% (Briefing.com consensus: 0.4%), the PCE Price Index was down 0.1% (Briefing.com consensus: -0.1%), and the core-PCE Price Index rose 0.1% (Briefing.com consensus: 0.2%). On a year-over-year basis, the PCE Price Index was up 3.7% versus 4.1% in May, and the core-PCE Price Index was up 3.3% versus 3.4% in June.
  • The key takeaway from the report, taking into account Fed Chair Warsh's demonstrative statement that the Fed doesn't have a soft inflation target but a hard target of 2.0%, is that the PCE Price Index remains well above 2.0%.