[BRIEFING.COM] The S&P 500 (-1.2%), Nasdaq Composite (-1.9%), and DJIA (-0.5%) are firmly lower just before midday as an early slide in tech names has expanded into a broader retreat. 

The information technology sector (-2.7%) faced early pressure as shares of Broadcom (AVGO 361.83, -44.54, -10.96%) traded sharply lower in reaction to the company's earnings report. That report was largely devoid of any flaws that would warrant a double-digit retreat, but a sharp rally in the stock this year left investors looking for a more aggressive growth outlook. 

A double-digit slide in Oracle (ORCL 187.85, -11.00, -5.53%) just yesterday in reaction to its own earnings report set an ominous tone for the AI trade today. The PHLX Semiconductor Index is down 4.8%.

Several cyclical sectors traded higher at the open but have since retreated, leaving just the defensive health care (+0.4%) and consumer staples (+0.3%) sectors in positive territory. 

Outside of the S&P 500, the small-cap Russell 2000 (-1.2%) and S&P Mid Cap 400 (-1.3%) trade lower in accordance with the broader market. 

[BRIEFING.COM] The S&P 500 (-1.2%), Nasdaq Composite (-1.8%), and DJIA (-0.4%) remain below their flatlines as losses in tech names widen and broaden to other sectors.

Broadcom (AVGO 361.76, -44.61, -10.98%) is  one of the worst-performing S&P 500 names today despite posting an impressive finish to FY25. The semiconductor and infrastructure software giant delivered upside Q4 (Oct) results, issued Q1 (Jan) revenue guidance above consensus, and even raised its dividend by 10%. However, expectations were sky-high, with the stock up over +180% since April, leaving little room for merely "strong" results. 

While results and commentary were solid, the FY26 tone wasn't quite as hyper-bullish as the market hoped, particularly given the massive AI backlog and recent enthusiasm around AI accelerators and networking.

Meanwhile, lululemon athletica (LULU 204.94, +17.93, +9.59%) is the top-performing S&P 500 name, also after posting its earnings results last night. The company beat expectations on the top and bottom line, with revenue increasing 7.1% to $2.57 billion. The company also guided Q4 EPS to $4.66-4.76, which was below expectations, and revenue to $3.50-3.59 billion, which was in line. Perhaps the biggest news was that CEO Calvin McDonald plans to step down from the role, effective January 31.

[BRIEFING.COM] Stocks have moved lower since the open, with the DJIA (-0.1%) retreating beneath its flatline after its modest opening gain notched it a record intraday high for the second consecutive day. The S&P 500 (-0.7%) and Nasdaq Composite (-1.2%) remain firmly lower amid underperformance in tech names. 

The majority of the sector's components trade lower, with Broadcom (AVGO 364.23, -42.14, -10.37%) extending its losses to double digits, while Oracle (ORCL 191.82, -7.02, -3.53%) moves lower again today after a double-digit retreat yesterday. 

The communication services sector (-0.8%) also faces a widening loss after a flattish open, with Alphabet (GOOG 309.37, -4.33, -1.38%) and Meta Platforms (META 644.00, -8.71, -1.33%) providing weak mega-cap leadership. 

The Vanguard Mega Cap Growth ETF is  now down 1.2%.

[BRIEFING.COM] The S&P 500 (-0.2), Nasdaq Composite (-0.5%), and DJIA (+0.2%) are mixed shortly after the open, with tech weakness once again weighing against broader-market strength. 

Broadcom (AVGO 370.87, -35.50, -8.74%) is down sharply following its earnings report yesterday, pressuring the top-weighted information technology sector (-1.3%) and the PHLX Semiconductor Index (-1.7%). 

The energy sector (-0.2%) holds a modest loss, while nine S&P 500 sectors trade higher. 

Similar to recent sessions, cyclical sectors are outperforming again today. The materials sector (+0.8%) tops the leaderboard after a 2.3% advance yesterday. 

Meanwhile, the consumer discretionary sector (+0.7%) holds a similar gain. lululemon athletica (LULU 210.68, +23.66, +12.65%) trades sharply higher after its own earnings report, while Tesla (TSLA 461.98, +15.09, +3.38%) holds a solid gain despite a report from Reuters that the company's U.S. sales have fallen to a four-year low. 

The stock market is on track for a mixed open this morning as tech names lag while the broader market continues to trend mostly higher in the wake of Wednesday's FOMC meeting. 

Chicago Fed President Austan Goolsbee, who dissented against Wednesday's rate cut in favor of keeping the Fed funds rate unchanged, told CNBC that he is optimistic Fed funds rates will be lower in 2026.

Mr. Goolsbee felt uncomfortable frontloading too many rate cuts but noted his "dot" is more dovish than the median for 2026, though he will not be a voting member next year. 

The S&P 500 futures currently trade in line with fair value.

Equity indices in the Asia-Pacific region had a higher finish to the week. China held its Central Economic Work Conference with officials pledging a continuation of fiscal expansion and more interest rate and reserve requirement ratio cuts. Japan is planning to make Hokkaido its base for advanced chip development. Large Japanese food producer Ajinomoto is raising the prices of some of its products by double digits. Banko Sentral ng Pilipinas lowered its policy rate by 25 basis points to 4.50%, as expected.

• In economic data:
  • China's November New Loans CNY390.0 bln (last CNY220.0 bln). November Outstanding Loan Growth 6.4% yr/yr (last 6.5%) and total social financing CNY2.49 trln (last CNY810.0 bln)
  • Japan's October Industrial Production 1.5% m/m (expected 1.4%; last 2.6%) and Capacity Utilization 3.3% m/m (last 2.5%)
  • South Korea's November Import Price Index 2.2% yr/yr (last 0.5%); 7.0% yr/yr (last 4.8%)
  • India's November CPI 0.71% yr/yr (expected 0.70%; last 0.25%)
  • New Zealand's November Business PMI 51.4 (last 51.2). November Electronic Card Retail Sales 1.2% m/m (last 0.2%); 1.6% yr/yr (last 0.8%)

---Equity Markets---

• Japan's Nikkei: +1.4%
• Hong Kong's Hang Seng: +1.8%
• China's Shanghai Composite: +0.4%
• India's Sensex: +0.5% 
• South Korea's Kospi: +1.4%
• Australia's ASX All Ordinaries: +1.2%

Major European indices trade in the green with banks contributing to the advance. The U.K.'s GDP contracted slightly in October, putting the Q4 reading at risk of a contraction ahead of next week's policy meeting at the Bank of England that could result in a rate cut. The EU will freeze Russian central bank assets held in Europe indefinitely and could use a large portion to fund a loan for Ukraine.

• In economic data:
  • Germany's November CPI -0.2% m/m, as expected (last 0.3%); 2.3% yr/yr, as expected (last 2.3%)
  • U.K.'s October GDP -0.1% m/m (expected 0.1%; last -0.1%); 1.1% yr/yr (expected 1.4%; last 1.1%). Construction Output -0.6% m/m (expected -0.1%; last 0.2%); 0.9% yr/yr (expected 1.6%; last 1.3%). October Industrial Production 1.1% m/m (expected 0.9%; last -2.0%); -0.8% yr/yr (expected -1.2%; last -2.5%). October Manufacturing Production 0.5% m/m (expected 1.1%: last -1.7%); -0.8% yr/yr (expected -0.1%; last -2.2%). October trade deficit GBP22.54 bln (expected deficit of GBP19.10 bln; last deficit of GBP18.88 bln)
  • France's November CPI -0.2% m/m (expected -0.1%; last 0.1%); 0.9% yr/yr, as expected (last 0.9%)
  • Spain's November CPI 0.2% m/m, as expected (last 0.7%); 3.0% yr/yr, as expected (last 3.1%). November Core CPI 2.6% yr/yr, as expected (last 2.5%)

---Equity Markets---

• STOXX Europe 600: +0.1%
• Germany's DAX: +0.3%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: +0.5%
• Italy's FTSE MIB: +0.4% 
• Spain's IBEX 35: +0.5%

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

Tech and AI names are mostly lower in response to a sharp slide in Broadcom (AVGO 382.94, -23.43, -5.8%) after the company's earnings report.

However, NVIDIA (NVDA 182.58, +1.65, +0.9%), which slid 1.6% yesterday, is higher in the premarket after Reuters reported that the company is considering increasing production of its H200 chip due to high demand from China. 

Equity futures point to a mixed opening this morning as futures tied to the DJIA trade higher after the index notched record highs yesterday, while lingering pressure in tech and AI names sends futures tied to the S&P 500 and the Nasdaq lower. 

Yesterday's action reflected a similar disposition, with small-cap, cyclical, and defensive stocks outperforming as tech names lagged in response to a disappointing earnings report from Oracle (ORCL 197.12, -1.73, -0.9%). There was a modest intraday buy-the-dip bid, which helped the S&P 500 finish slightly higher and notch a record closing high, but mega-cap and tech names were still a drag on the market. 

This morning, Broadcom (AVGO 382.89, -23.48, -5.8%) weighs on the market despite delivering an earnings report that was largely better than expectations. 

The market will not receive any economic data of note this morning but will hear from several FOMC officials throughout the day, including Chicago Fed President Austan Goolsbee (voting FOMC member), who notably dissented against Wednesday's rate cut, preferring to keep the federal funds target rate unchanged. 

In other Fed news, Barron's reports that people close to Kevin Hassett are concerned he will not be independent as Fed Chair. 

In corporate news: 

• Moderate House Republicans and Republican leadership are discussing adding an amendment vote to the healthcare bill that will extend Affordable Care Act subsidies. Vote on legislation is expected next week, according to Politico.
• Broadcom (AVGO 382.89, -23.48, -5.8%) beats EPS expectations by $0.08, beats revenue expectations, guides Q1 revs above consensus, and also increases its quarterly dividend.
• Costco (COST 883.00, -1.48, -0.2%) beat EPS expectations by $0.07 and reported revenues in-line. 
• lululemon athletica (LULU 205.30, +18.29, +9.8%) beat EPS expectations by $0.38, beat revenue expectations, and guided Q4 EPS below consensus with revenues in-line. The company approves a $1 billion increase to its share repurchase program, and CEO Calvin McDonald will step down
• Paramount (PSKY 14.11, -0.01, -0.1%) might increase its bid for Warner Brothers (WBD 29.94, +0.45, +1.5%) by 10%, according to The New York Post. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a higher finish to the week. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: +1.8%, China's Shanghai Composite: +0.4%, India's Sensex: +0.5%, South Korea's Kospi: +1.4%, Australia's ASX All Ordinaries: +1.2%.

In news:

• China held its Central Economic Work Conference with officials pledging a continuation of fiscal expansion and more interest rate and reserve requirement ratio cuts.
• Japan is planning to make Hokkaido its base for advanced chip development.
• Large Japanese food producer Ajinomoto is raising the prices of some of its products by double digits.
• Banko Sentral ng Pilipinas lowered its policy rate by 25 basis points to 4.50%, as expected.

In economic data:

• China's November New Loans CNY390.0 bln (last CNY220.0 bln). November Outstanding Loan Growth 6.4% yr/yr (last 6.5%) and total social financing CNY2.49 trln (last CNY810.0 bln)
• Japan's October Industrial Production 1.5% m/m (expected 1.4%; last 2.6%) and Capacity Utilization 3.3% m/m (last 2.5%)
• South Korea's November Import Price Index 2.2% yr/yr (last 0.5%); 7.0% yr/yr (last 4.8%)
• India's November CPI 0.71% yr/yr (expected 0.70%; last 0.25%)
• New Zealand's November Business PMI 51.4 (last 51.2). November Electronic Card Retail Sales 1.2% m/m (last 0.2%); 1.6% yr/yr (last 0.8%)

Major European indices trade in the green with banks contributing to the advance. STOXX Europe 600: +0.2%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.5%.

In news:

• The U.K.'s GDP contracted slightly in October, putting the Q4 reading at risk of a contraction ahead of next week's policy meeting at the Bank of England that could result in a rate cut.
• The EU will freeze Russian central bank assets held in Europe indefinitely and could use a large portion to fund a loan for Ukraine.

In economic data:

• Germany's November CPI -0.2% m/m, as expected (last 0.3%); 2.3% yr/yr, as expected (last 2.3%)
• U.K.'s October GDP -0.1% m/m (expected 0.1%; last -0.1%); 1.1% yr/yr (expected 1.4%; last 1.1%). Construction Output -0.6% m/m (expected -0.1%; last 0.2%); 0.9% yr/yr (expected 1.6%; last 1.3%). October Industrial Production 1.1% m/m (expected 0.9%; last -2.0%); -0.8% yr/yr (expected -1.2%; last -2.5%). October Manufacturing Production 0.5% m/m (expected 1.1%: last -1.7%); -0.8% yr/yr (expected -0.1%; last -2.2%). October trade deficit GBP22.54 bln (expected deficit of GBP19.10 bln; last deficit of GBP18.88 bln)
• France's November CPI -0.2% m/m (expected -0.1%; last 0.1%); 0.9% yr/yr, as expected (last 0.9%)
• Spain's November CPI 0.2% m/m, as expected (last 0.7%); 3.0% yr/yr, as expected (last 3.1%). November Core CPI 2.6% yr/yr, as expected (last 2.5%)

[BRIEFING.COM] The stock market delivered an eventful session, with cyclical and defensive names extending yesterday's rate-cut momentum to lift the DJIA (+1.3%) to a record high. At the same time, weakness in tech and other mega-cap names following Oracle's (ORCL 198.64, -24.37, -10.93%) disappointing results kept the S&P 500 (+0.2%) and Nasdaq Composite (-0.3%) subdued, though the S&P 500 still managed to log a record close. 

The smaller-cap Russell 2000 (+1.2%) and S&P Mid Cap 400 (+1.0%) continued on their run of recent outperformance as the Fed's rate cut and softer policy tone encouraged renewed interest in domestically focused, rate-sensitive names.

The information technology sector (-0.6%) spent the majority of the session as the biggest laggard, as Oracle's revenue miss and lighter-than-expected free cash flow weighed on other mega-cap names across the AI trade. 

NVIDIA (NVDA 180.96, -2.82, -1.53%) finished lower, with the broader PHLX Semiconductor Index closing with a 0.8% loss. Broadcom (AVGO 406.96, -6.01, -1.46%) also traded lower ahead of its earnings report this afternoon, which investors will look to for a boost in AI sentiment. 

While big tech certainly limited gains at the index level, it is worth noting that the information technology sector mounted an impressive intraday move after trading over 2.0% lower this morning, a move that was pivotal in getting the S&P 500 across its flatline and notching a record close. 

The communication services sector (-1.0%) finished with the widest loss, as Alphabet (GOOG 313.75, -7.25, -2.26%) was burdened by today's mega-cap weakness, without a comeback effort this afternoon.

Dow component Walt Disney (DIS 111.48, +2.64, +2.43%) still notched a solid gain after news that the company struck a licensing deal with OpenAI that will allow some 200 Disney characters to be used in the company's short-form generative AI video platform, Sora. As part of the agreement, Disney will also be investing $1 billion in OpenAI. 

The Vanguard Mega Cap Growth ETF finished 0.3% lower, contributing to the underperformance of the market-weighted S&P 500 (+0.2%) relative to the S&P 500 Equal Weighted Index (+0.8%).

Meanwhile, the energy sector (-0.4%) finished with a more modest loss as crude oil futures settled today's session $0.92 lower (-1.6%) at $57.61 per barrel.

While weakness in mega-cap tech names certainly stifled growth in the S&P 500 and Nasdaq Composite, the broader market put up another solid performance in the wake of yesterday's FOMC meeting. 

Cyclical sectors, such as the materials (+2.2%) and financials (+1.8%) sectors, outperformed again as investors rotated into sectors that benefit from a more accommodative monetary policy backdrop.

Mosaic (MOS 25.20, +1.44, +6.08%) captured one of the widest gains across S&P 500 names after reports that a Ukrainian drone strike caused a large fire at a prominent Russian mineral fertilizer plant. 

Visa (V 345.65, +19.92, +6.12%) notched a similar gain, catching an upgrade from Bank of America Securities to Buy from Neutral this morning. 

The defensive health care (+1.0%), utilities (+0.7%), and consumer staples (+0.7%) sectors also caught a solid rotational bid today amid the weakness in tech names. 

Managed care names such as Elevance Health (ELV 360.18, +19.14, +5.61%), Centene (CNC 40.47, +1.80, +4.65%), and Molina Healthcare (MOH 166.94, +6.42, +4.00%) traded sharply higher following headlines that a Republican-backed healthcare plan to redirect Affordable Care Act subsidies from insurance companies to Americans failed by a Senate vote of 51-48.

Eli Lilly (LLY 1009.14, +15.50, +1.56%) also notched a solid gain after announcing positive topline results from its Phase 3 TRIUMPH-4 clinical trial evaluating the weight-loss effects of retatrutide, its investigational "triple G" agonist.

Attention now shifts to Broadcom's earnings, which could influence the tone around chipmakers and AI, while the post-FOMC rotation into cyclicals and defensives continues to shape the market's underlying strength.

U.S. Treasuries extended their midweek bounce on Thursday, though the advance found some intraday resistance, which left yields on 5-year and longer tenors above their opening levels. The 2-year note yield settled down four basis points to 3.53%, and the 10-year note yield settled down two basis points to 4.14%.

• Nasdaq Composite: +22.2% YTD
• S&P 500: +17.3% YTD
• Russell 2000: +16.2% YTD
• DJIA: +14.5% YTD
• S&P Mid Cap 400: +8.8% YTD

Reviewing today's data:

• Weekly Initial Claims 236K; Prior was revised to 192K from 191K, Weekly Continuing Claims 1.838 mln; Prior was revised to 1.937 mln from 1.939 mln
  • The key takeaway from the report is that, on balance, it doesn't point to a material weakening in the labor market.
• September Trade Balance -$52.8 bln (Briefing.com consensus -$61.7 bln); Prior was revised to -$59.3 bln from -$59.6 bln
  • The key takeaway from the report is that the narrower deficit was the byproduct of exports being $8.4 billion more than August exports and imports being $1.9 billion more than August imports.
• September Wholesale Inventories 0.5% (Briefing.com consensus -0.2%); Prior -0.1%