[BRIEFING.COM] There has been a bit of an about-face in the underlying market action today. Recall that yesterday's trade featured the outperformance of the mega-cap stocks and the underperformance of the "rest of the market." That dynamic was evident in the Vanguard Mega-Cap Growth ETF (MGK 83.54, -0.50, -0.60%) finishing up 2.0% and the equal-weighted S&P 500 finishing flat.

Today, the MGK is down 0.6%, and the equal-weighted S&P 500 is up 0.2%. The latter isn't a big move in an absolute sense, but it is reflective of the ongoing rotation that has been a hallmark of the enduring bull market.

Breadth figures show advancers with a 7-to-6 lead over decliners at the NYSE. At the Nasdaq, decliners lead advancers by a 13-to-8 margin.

[BRIEFING.COM] The major indices, with their modest losses, are teasing buyers and sellers alike.

The tease for buyers is that the losses aren't that much at all relative to recent gains, which might lead some to think this is a temporary blip before a resumption to the upside. The tease for sellers is that there is weakness today that is being paced by the software stocks, which might lead some to think the recovery off the March lows is a dead-cat bounce.

To be sure, the tape will ultimately tease things out to determine where this market is headed in the near term if headlines surrounding Iran don't do so first.

Our last comment called attention to the weakness in the software stocks today. Now, we'll turn the page and highlight the continued strength in the semiconductor space. Texas Instruments (TXN 274.65, +38.34, +16.22%) is the pacesetter there, rallying after easily topping Q1 consensus estimates and issuing guidance for Q2 that is well above current consensus estimates.

The Philadelphia Semiconductor Index is up 1.8%, leaving it up 33.0% this month!

[BRIEFING.COM] There is some early weakness at the index level, with some selling activity in the mega-cap space.

Tesla (TSLA 375.44, -12.07, -3.11%) is a key laggard there, with investors expressing some dismay over the company's vague indication that it expects a very significant increase in capital expenditures. Microsoft (MSFT 418.00, -14.92, -3.45%) is another major drag, sliding in sympathy with ServiceNow (NOW 87.94, -15.13, -14.68%) and IBM (IBM 225.08, -26.78, -10.63%) after their earnings reports.

The iShares GS Software ETF (IGV 83.98, -4.76, -5.36%) reflects the rollback in the software space after it has had a big run off its March lows.

Separately, the preliminary April S&P Global U.S. Manufacturing PMI checked in at 54.0 vs. 52.3 prior, while the preliminary April S&P Global U.S. Services PMI checked in at 51.3 vs. 49.8 prior.

The S&P 500 futures trade 14 points below fair value.

Equity indices in the Asia-Pacific region had a mostly lower showing on Thursday, though Japan's Nikkei (-0.8%) and South Korea's Kospi (+0.9%) set fresh record highs. The trading day started with some impulse selling that took place alongside a sudden jump in the price of oil amid speculation about renewed military action against Iran, but the speculation was never confirmed. South Korea's Q1 GDP growth (1.7%; expected 1.0%) was much stronger than expected. SK Hynix reported strong results but its guidance did not live up to sky-high expectations. Bank Indonesia made no policy changes, keeping its policy rate at 4.75%. New Zealand's Treasury sees the potential for FY25/26 inflation reaching 7.4% in a worst-case scenario.

• In economic data:
  • Japan's flash April Manufacturing PMI 54.9 (expected 51.1; last 51.6) and flash Services PMI 51.2 (last 53.4)
  • South Korea's April Consumer Confidence 99.2 (last 107.3). Q1 GDP 1.7% qtr/qtr (expected 1.0%; last -0.2%); 3.6% yr/yr (expected 2.7%; last 1.6%)
  • Hong Kong's March CPI 0.0% m/m (last 0.5%); 1.7% yr/yr (last 1.7%). March Unemployment Rate 3.7% (last 3.8%)
  • Singapore's March CPI 0.5% m/m (last 0.6%); 1.8% yr/yr (last 1.2%). Core CPI 1.7% yr/yr (last 1.4%)
  • India's flash April Manufacturing PMI 55.9 (last 53.9) and flash Services PMI 57.9 (last 57.5)
  • Australia's flash April Manufacturing PMI 51.0 (last 49.8) and flash Services PMI 50.3 (last 46.3)
  • New Zealand's March Credit Card Spending 2.1% yr/yr (last 1.1%)

---Equity Markets---

• Japan's Nikkei: -0.8%
• Hong Kong's Hang Seng: -1.0%
• China's Shanghai Composite: -0.3%
• India's Sensex: -1.1%
• South Korea's Kospi: +0.9%
• Australia's ASX All Ordinaries: -0.6%

Major European indices trade on a mostly lower note while France's CAC (+0.2%) outperforms with automakers and consumer names contributing to the strength. Flash April Manufacturing PMI readings from the region showed an acceleration in activity but Services PMI readings from Germany (46.9) and France (46.5) pointed to contracting activity. The U.K.'s Debt Management Office lowered its FY27 debt issuance forecast to GBP246.2 bln from GBP252.1 bln.

• In economic data:
  • Eurozone's flash April Manufacturing PMI 52.2 (expected 50.9; last 51.6) and flash Services PMI 47.4 (expected 49.8; last 50.2)
  • Germany's flash April Manufacturing PMI 51.2 (expected 51.4; last 52.2) and flash Services PMI 46.9 (expected 50.4; last 50.9)
  • U.K.'s March Public Sector Net Borrowing GBP12.60 bln (expected GBP10.40 bln; last -GBP12.80 bln). Flash April Manufacturing PMI 53.6 (expected 50.3; last 51.0) and flash Services PMI 52.0 (expected 50.0; last 50.5). April CBI Industrial Trends Orders -38 (expected -34; last -27)
  • France's April Business Survey 100 (expected 99; last 99). April Manufacturing PMI 52.8 (expected 49.5; last 50.0) and Services PMI 46.5 (expected 48.5; last 48.8)

---Equity Markets---

• STOXX Europe 600: -0.2%
• Germany's DAX: -0.5%
• U.K.'s FTSE 100: -0.5%
• France's CAC 40: +0.4%
• Italy's FTSE MIB: -0.1%
• Spain's IBEX 35: -1.0%

Initial jobless claims for the week ending April 18 increased by 6,000 to 214,000 (Briefing.com consensus: 212,000). Continuing jobless claims for the week ending April 11 increased by 12,000 to 1.821 million.

The equity futures market has made a significant recovery from overnight lows following a CCTV report that preparations for talks between the U.S. and Iran might see a breakthrough by tomorrow.

Equity futures point to a lower open. There is finger-pointing at rising oil prices ($93.99, +1.03, +1.1%) and concerns about the Iran situation. That is part of it, but profit taking after a huge run to record highs in a short amount of time and disappointing price action in several influential stocks following their earnings reports, namely Tesla (TSLA), IBM (IBM), Honeywell (HON), and ServiceNow (NOW), is a larger part of it.

Another headwind is the 10-yr note yield, which has quietly moved back above 4.30% again, currently at 4.32%.

The stock market has seen its share of indications for lower opens, only to regroup quickly and spring back into positive territory on buy-the-dip action. Traders will be watching to see if that trend remains their friend today or decides to turn a cold shoulder and defies the buy-the-dip impulse.

Today's economic calendar features the weekly Initial and Continuing Jobless Claims report at 8:30 a.m. ET followed by the preliminary S&P Global U.S. Manufacturing and Services PMI readings for April at 9:45 a.m. ET.

In corporate news:

• American Airlines (AAL 11.42, -0.08, -0.7%) beats by $0.07, reports revs in-line; guides Q2 EPS in-line, revs in-line; guides FY26 EPS above consensus
• American Express (AXP 333.00, +0.10, +0.03%) beats by $0.28, beats on revs; reaffirms FY26 EPS guidance, revs guidance
• Hasbro (HAS 99.98, +9.37, +10.3%) issues upside Q1 revenue guidance, reaffirms FY26 guidance
• Honeywell (HON 205.10, -14.87, -6.8%) beats by $0.13, misses on revs; sees Q2 EPS and revs below consensus; guides FY26 EPS in-line, revs in-line; selling Warehouse and Workflow Solutions business
• IBM (IBM 232.62, -19.24, -7.6%) beats by $0.10, beats on revs; expects Q2 revenue to be similar to full year guidance of more than +5% CC; reaffirms FY26 revs guidance
• Lam Research (LRCX 263.76, -1.79, -0.7%) beats by $0.11, beats on revs; guides Q4 EPS above consensus, revs above consensus
• Lockheed Martin (LMT 540.00, -15.43, -2.8%) misses by $0.30, misses on revs; guides FY26 EPS in-line, revs in-line
• Netflix (NFLX 94.47, +1.23, +1.3%) authorized the repurchase of an additional $25 billion of the Company's common stock
• ServiceNow (NOW 89.12, -13.95, -13.5%) reports EPS in-line, revs in-line
• Tesla (TSLA 376.30, -11.21, -2.9%) beats by $0.06, beats on revs; Expects volume production of Cybercab and Tesla Semi this year and first large-scale Optimus factory will begin shortly in Q2;  expects $25 bln in CapEx in 2025; says expects to see significant increase in CapEx, but it is "well justified for a substantially increased future revenue stream"
• Texas Instruments (TXN 257.18, +20.87, +8.8%) beats by $0.32, beats on revs; guides Q2 EPS above consensus, revs above consensus

Equity indices in the Asia Pacific region had a mostly lower showing on Thursday, though Japan's Nikkei (-0.8%) and South Korea's Kospi (+0.9%) set fresh record highs. Japan's Nikkei: -0.8%, Hong Kong's Hang Seng: -1.0%, China's Shanghai Composite: -0.3%, India's Sensex: -1.1%, South Korea's Kospi: +0.9%, Australia's ASX All Ordinaries: -0.6%.

In news:

• The trading day started with some impulse selling that took place alongside a sudden jump in the price of oil amid speculation about renewed military action against Iran, but the speculation was never confirmed.
• SK Hynix reported strong results but its guidance did not live up to sky-high expectations.
• Bank Indonesia made no policy changes, keeping its policy rate at 4.75%.
• New Zealand's Treasury sees the potential for FY25/26 inflation reaching 7.4% in a worst-case scenario.

In economic data:

• Japan's flash April Manufacturing PMI 54.9 (expected 51.1; last 51.6) and flash Services PMI 51.2 (last 53.4)
• South Korea's April Consumer Confidence 99.2 (last 107.3). Q1 GDP 1.7% qtr/qtr (expected 1.0%; last -0.2%); 3.6% yr/yr (expected 2.7%; last 1.6%)
• Hong Kong's March CPI 0.0% m/m (last 0.5%); 1.7% yr/yr (last 1.7%). March Unemployment Rate 3.7% (last 3.8%)
• Singapore's March CPI 0.5% m/m (last 0.6%); 1.8% yr/yr (last 1.2%). Core CPI 1.7% yr/yr (last 1.4%)
• India's flash April Manufacturing PMI 55.9 (last 53.9) and flash Services PMI 57.9 (last 57.5)
• Australia's flash April Manufacturing PMI 51.0 (last 49.8) and flash Services PMI 50.3 (last 46.3)
• New Zealand's March Credit Card Spending 2.1% yr/yr (last 1.1%)

Major European indices trade on a mostly lower note while France's CAC (+0.2%) outperforms with automakers and consumer names contributing to the strength. STOXX Europe 600: -0.3%, Germany's DAX: -0.5%, U.K.'s FTSE 100: -0.8%, France's CAC 40: +0.2%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: -1.2%.

In news:

• Flash April Manufacturing PMI readings from the region showed an acceleration in activity but Services PMI readings from Germany (46.9) and France (46.5) pointed to contracting activity.
• The U.K.'s Debt Management Office lowered its FY27 debt issuance forecast to GBP246.2 bln from GBP252.1 bln.

In economic data:

• Eurozone's flash April Manufacturing PMI 52.2 (expected 50.9; last 51.6) and flash Services PMI 47.4 (expected 49.8; last 50.2)
• Germany's flash April Manufacturing PMI 51.2 (expected 51.4; last 52.2) and flash Services PMI 46.9 (expected 50.4; last 50.9)
• U.K.'s March Public Sector Net Borrowing GBP12.60 bln (expected GBP10.40 bln; last -GBP12.80 bln). Flash April Manufacturing PMI 53.6 (expected 50.3; last 51.0) and flash Services PMI 52.0 (expected 50.0; last 50.5). April CBI Industrial Trends Orders -38 (expected -34; last -27)
• France's April Business Survey 100 (expected 99; last 99). April Manufacturing PMI 52.8 (expected 49.5; last 50.0) and Services PMI 46.5 (expected 48.5; last 48.8)

[BRIEFING.COM] The S&P 500 and Nasdaq Composite started on higher ground today and held that higher ground throughout today's session. In fact, the S&P 500 and Nasdaq finished at their best levels of the day and with record closing highs. They did so, fortified by leadership from the tech stocks and specifically the mega-cap tech stocks, software stocks, and semiconductor stocks.

It was a concentrated rally effort, but because the market's most influential sector was in a leadership position, the major indices looked better than breadth figures suggested.

To that end, advancers ended only slightly ahead of decliners at the NYSE but held a more comfortable lead at the tech-dominated Nasdaq.

Buying efforts today followed President Trump's announcement that he will extend the ceasefire with Iran to allow its fractured leadership more time to come up with a unified proposal for securing a lasting ceasefire. The caveat is that Iran only has a short time to do so or it will face a resumption of bombing efforts.

Stocks were not rattled by this thought, yet oil prices ($93.01, +3.45, +3.9%) reflected some lingering nervousness about the unsettled state of affairs with Iran and the Strait of Hormuz remaining a chokepoint for global energy supplies and goods.

The higher prices took some steam out of the broad market relief rally seen at the start of today's trading. The information technology (+2.3%), communication services (+1.4%), and energy (+1.1%) sectors were the only sectors up more than 1.0%. Four sectors--real state (-0.7%), industrials (-0.2%), financials (-0.2%), and utilities (-0.2%)--finished lower.

The underperformance of the industrials sector was a bit surprising given how Boeing (BA 231.28, +12.12, +5.53%), GE Vernova (GEV 1126.01, +134.71, +13.59%), and Masco (MAS 73.95, +7.19, +10.77%) fared after their earnings reports, but weakness in the defense stocks and airline stocks dictated the sector bias. United Airlines (UAL 91.71, -5.42, -5.58%) was a focal point, falling sharply after it cut its full-year outlook due in large part to rising fuel costs.

Elsewhere, Adobe (ADBE 255.94, +8.76, +3.54%) set a good tone for continued bargain hunting in the software space after it announced a $25 billion share repurchase program, while the mega-cap stocks set a good tone for the market. The Vanguard Mega-Cap Growth ETF (MGK 84.06, +1.69, +2.05%) jumped 2.0%.

Tesla (TSLA 387.20, +0.78, +0.20%), which is reporting after today's close, trailed the mega-cap cohort, which was led by Apple (AAPL 273.17, +7.00, +2.63%), Amazon (AMZN 255.36, +5.45, +2.18%), and Alphabet (GOOG 337.73, +7.26, +2.20%), which unveiled new chips to power next-gen agentic AI training and inference at scale.

There was no U.S. economic data of note today. The Treasury market ended the day roughly flat, battling back from early selling efforts with the help of a strong $13 billion 20-yr bond reopening.

• Russell 2000: +12.2% YTD
• S&P Mid Cap 400: +10.0% YTD
• Nasdaq Composite: +6.1% YTD
• S&P 500: +4.3% YTD
• DJIA: +3.0% YTD