[BRIEFING.COM] The major averages remain modestly lower at midday.

The communication services sector (+0.2%) has moved into positive territory as its largest component, Alphabet (GOOG 385.45, +0.55, +0.14%) now holds a modest gain. The consumer discretionary sector (-0.1%) is also at session highs as Amazon (AMZN 265.63, +0.62, +0.23%) and Tesla (TSLA 417.38, +0.12, +0.03%) move above their flat lines.

The Vanguard Mega Cap Growth ETF is now down just 0.1% after trading nearly 1.0% lower this morning.

[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.5%), and DJIA (-0.2%) are under modest but broad pressure this morning, as growth-oriented stocks give back some of yesterday's gains while a surge in oil prices weighs on sentiment.

Nine S&P 500 sectors trade lower, with the top-weighted information technology sector (-0.5%) among the laggards. Action is mixed in the sector, though its largest component, NVIDIA (NVDA 219.19, -4.28, -1.92%), moves lower despite an impressive beat-and-raise earnings report.

There is some buying interest across the defensive utilities (+0.7%) and health care (+0.2%) sectors, but the consumer staples sector (-2.0%) holds the widest loss as Walmart (WMT 121.34, -9.52, -7.27%) moves sharply lower after the company beat revenue expectations, though EPS was just in-line.

On the geopolitical front, oil moved sharply higher this morning after Reuters reported that Iran's Supreme Leader said that Iran's enriched uranium needs to remain in the country, though the report has been refuted by other reporters. Still, crude oil is up $3.36 (+3.4%) to $101.62 per barrel.

[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.6%), and DJIA (-0.2%) have settled into a narrower range, albeit at lower levels.

Strength is limited to the defensive utilities (+0.6%) and health care (+0.1%) sectors, with strength across electric utilities names such as Vistra Corp. (VST 147.71, +3.71, +2.58%).

Meanwhile, the consumer staples sector (-2.0%) remains the worst-performing S&P 500 sector as Walmart (WMT 121.67, -9.18, -7.02%) trades sharply lower following its Q1 (Apr) earnings report this morning. EPS was just in-line while revenue grew a healthy 7.3% year-over-year (+5.9% CC) to $177.8 billion, topping analyst expectations. The Q1 growth rate was Walmart's strongest in any quarter over the past three years. However, investors appeared concerned that the strength may not be fully sustainable given heavier rollback activity, favorable FX tailwinds, and a boost from larger-than-expected tax refunds.

Walmart delivered a mixed quarter that ultimately failed to live up to elevated investor expectations following the stock's rally over the past several months. While revenue growth was impressive and represented the company's strongest quarterly growth rate in three years, investors focused more heavily on the underwhelming Q2 EPS outlook and Walmart's increasingly aggressive rollback strategy. The company's push toward lower pricing should support unit volume growth, but it also raises concerns about margin pressure and the health of lower-income consumers.

[BRIEFING.COM] The S&P 500 (-0.5%), Nasdaq Composite (-0.8%), and DJIA (-0.1%) are facing some choppy action this morning.

Much of that volatility is in the information technology sector (-0.6%), which now sits near session lows.

In particular, the PHLX Semiconductor Index (-0.2%) is now in negative territory after surging more than 1.0%.

NVIDIA (NVDA 219.02, -4.44, -1.99%) made a sharp move lower despite the AI chip giant reporting a robust Q1 (Apr) beat-and-raise last night. The Q2 (Jul) upside revenue guidance really stood out, easing fears of any slowing AI infrastructure spending. Importantly, the Q2 guidance was strong despite assuming zero Data Center compute revenue from China.

NVIDIA once again delivered the type of massive beat-and-raise quarter investors have come to expect, particularly within its dominant Data Center business. Management commentary surrounding hyperscale AI spending and accelerating AI factory deployments also reinforces the view that the AI investment cycle remains in its early innings. That said, the stock reaction reflects extraordinarily high expectations heading into the print. NVDA shares had rallied sharply ahead of earnings (+35% since late March), and investors likely already priced in another substantial upside quarter. While the long-term AI narrative remains firmly intact, near-term upside may depend more on valuation expansion and flawless execution around the upcoming Vera Rubin launch.

[BRIEFING.COM] The S&P 500 (-0.3%), Nasdaq Composite (-0.4%), and DJIA (-0.2%) opened to losses as a surge in oil prices sends Treasury yields higher across the curve.

Reuters reported that Iran's Supreme Leader called for the country's enriched uranium to remain in Iran, which has cast doubt over yesterday's claim of negotiation progress. Crude oil is currently up $2.27 (+2.3%) to $100.50 per barrel, and the 10-year note yield is up three basis points to 4.60%.

Eight S&P 500 sectors trade lower. The consumer staples sector (-2.3%) is an outlier, which is largely due to a sharp pullback in Walmart (WMT 121.80, -9.06, -6.92%) after the company turned in a somewhat disappointing earnings report with EPS coming in at just in-line amid some pressure in consumer spending.

Losses are more modest elsewhere, but the real estate (-0.9%) sector is pressured by the backup in yields, while the consumer discretionary (-0.9%) and communication services (-0.8%) sectors also lag.

The information technology sector (flat) is actually one of the better performers, with the PHLX Semiconductor Index (+0.6%) up modestly despite a muted response to NVIDIA's (NVDA 221.94, -1.52, -0.68%) earnings report.

Elsewhere, the energy sector (+0.4%) outperforms as oil moves higher, while the utilities sector (+0.2%) garners some defensive rotational interest.

The preliminary S&P Global U.S. Manufacturing PMI for May checked in at 55.3, from the final April level of 54.5. The preliminary S&P Global U.S. Services PMI checked in at 50.9, from the final prior level of 51.0.

The stock market remains poised for a lower opening following a busy slate of economic data.

Initial jobless claims for the week ending May 16 decreased by 3,000 to 209,000 (Briefing.com consensus: 210,000), while continuing jobless claims for the week ending May 9 were unchanged from the prior week at 1.782 million.

The key takeaway from the report is that there is nothing to see here, meaning there is nothing in these latest numbers that would suggest there has been a sea change in a labor market environment that remains characterized by low firing and low hiring activity.

Housing starts decreased 2.8% month-over-month in April to a seasonally adjusted annual rate of 1.465 million units (Briefing.com consensus: 1.420 million). Building permits rose 5.8% month-over-month to a seasonally adjusted annual rate of 1.442 million (Briefing.com consensus: 1.380 million).

The key takeaway from the report is that there was broad-based weakness across all regions for both single-family starts and single-family building permits, underscoring the headwind posed for builders by rising costs for financing, materials, and labor.

The Philadelphia Fed Index fell from 26.7 in April to -0.4 in May (Briefing.com consensus: 15.5). The dividing line between expansion and contraction for this survey is 0.0, so the May result reflects a slight contraction in activity versus April.

The key takeaway from the report, though, is that the diffusion index for future general activity climbed 12 points to 53.2, which is the highest reading since June 2021 and a sign that manufacturers are expeting better activity to follow in the next six months.

The S&P 500 futures currently trade 17 points below fair value.

Equity indices in the Asia-Pacific region had a mixed showing on Thursday with South Korea's Kospi (+8.4%) rebounding strongly after a last-minute labor agreement at Samsung Electronics averted a labor strike. Softbank soared nearly 20% in Japan after it was reported that OpenAI will file for an IPO. Japan's extra budget is expected to reach JPY3 trillion, but Prime Minister Takaichi has not confirmed that amount yet. Australia lost jobs in April, leading the market to push out its forecast for the next rate hike from the Reserve Bank of Australia to August from June. Bank Indonesia raised its policy rate by 50 basis points to 5.25% against expectations for a smaller increase.

• In economic data:
  • Japan's flash May Manufacturing PMI 54.5, as expected (last 55.1) and flash Services PMI 50.0 (last 51.0). April trade surplus JPY240 bln (expected deficit of JPY230 bln; last surplus of JPY90 bln). April Imports 9.7% yr/yr (expected 8.3%; last 10.9%) and Exports 14.8% yr/yr (expected 9.3%; last 11.5%). March Core Machinery Orders -9.4% m/m (expected -7.7%; last 13.6%); 5.9% yr/yr (expected 4.5%; last 24.7%)
  • South Korea's April PPI 2.5% m/m (last 1.7%); 6.9% yr/yr (last 4.1%)
  • Hong Kong's April CPI -0.1% m/m (last 0.0%); 1.7% yr/yr (last 1.7%)
  • Australia's flash May Manufacturing PMI 50.2 (last 51.3) and flash Services PMI 47.7 (last 50.7). April Employment Change -18,600 (expected 16,700; last 23,300) and full Employment Change -10,700 (last 63,400). April Unemployment Rate 4.5% (expected 4.3%; last 4.3%) and April Participation Rate 66.7% (expected 66.8%; last 66.8%). April Credit Card Spending 2.9% yr/yr (last 2.1%)
  • New Zealand's April trade surplus NZD1.92 bln (expected NZD980 mln; last NZD430 mln)
  • India's flash May Manufacturing PMI 54.3 (last 54.7) and flash Services PMI 58.9 (last 58.8)

---Equity Markets---

• Japan's Nikkei: +3.1%
• Hong Kong's Hang Seng: -1.0%
• China's Shanghai Composite: -2.0%
• India's Sensex: -0.2%
• South Korea's Kospi: +8.4%
• Australia's ASX All Ordinaries: +1.4%

Major European indices trade in the red. Flash May PMI readings from the region showed notable weakening with Germany's Manufacturing PMI (49.9), France's Manufacturing PMI (48.9), and U.K.'s Services PMI (47.9) coming in below 50.0, reflecting a contraction. The weak readings are fueling speculation about a potential contraction for Q2. European Central Bank policymaker Rehn said that a rate hike may be needed to preserve credibility.

• In economic data:
  • Eurozone's flash May Manufacturing PMI 51.4 (expected 51.7; last 52.2) and flash Services PMI 46.4 (expected 47.8; last 47.6). March Current Account surplus EUR14.9 bln (expected EUR26.3 bln; last EUR25.6 bln). Q1 Labor Cost Index 3.3% yr/yr (last 3.3%) and March Construction Output 0.78% m/m (last -0.77%)
  • Germany's flash May Manufacturing PMI 49.9 (expected 51.0; last 51.4) and flash Services PMI 47.8 (expected 47.1; last 46.9)
  • U.K.'s flash May Manufacturing PMI 53.7 (expected 52.9; last 53.7) and flash Services PMI 47.9 (expected 51.7; last 52.7)
  • France's flash May Manufacturing PMI 48.9 (expected 52.1; last 52.8) and flash Services PMI 42.9 (expected 46.6; last 46.5)
  • Swiss Q1 Industrial Production -7.1% yr/yr (expected 0.5%; last -0.4%)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.6%
• U.K.'s FTSE 100: -0.3%
• France's CAC 40: -0.6%
• Italy's FTSE MIB: -0.4%
• Spain's IBEX 35: -0.5%

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

Just released, housing starts decreased 2.8% month-over-month in April to a seasonally adjusted annual rate of 1.465 million units (Briefing.com consensus 1.420 million).

Building permits, meanwhile, increased 5.8% month-over-month in April to a seasonally adjusted annual rate of 1.442 million units (Briefing.com consensus 1.380 million).

Initial jobless claims for the week ended May 16 decreased by 3,000 to 209,000 (Briefing.com consensus 210,000) from the upwardly revised prior level of 212,000 ( from 211,000).

Continuing jobless claims for the week ended May 9 increased by 6,000 to 1.782 million, from the downwardly revised prior level of 1.776 million (from 1.782 million).

The Philadelphia Fed Index contracted to -0.4% in May (Briefing.com consensus 15.5), from the previous level of 26.7.

Equity futures point to a lower opening this morning after stocks rallied in yesterday's session to snap the S&P 500's three-day losing streak. There was a strong rebound across semiconductor and mega-cap names, while retreating oil prices and Treasury yields provided support for the broader market.

Oil and yields are both moving higher this morning, which is somewhat attributed to a Reuters report that Iran's Supreme Leader said enriched uranium must stay in Iran. President Trump said yesterday that the U.S. and Iran were on the precipice of a breakthrough, but reports suggest the two sides remain far apart on key issues.

On the earnings front, NVIDIA (NVDA 223.88, +0.41, +0.2%) delivered another beat-and-raise earnings report, but lofty expectations coming into the print leave the stock flattish.

This morning is slightly busier on the data front, with the market set to receive April Housing Starts (Briefing.com consensus 1420K) and Building Permits (1380K) data in addition to weekly initial jobless claims (Briefing.com consensus 210K).

In corporate news:

• The Trump administration will award $2 billion in grants to quantum computing companies and take equity stakes, according to The Wall Street Journal.
• IBM (IBM 239.71, +14.71, +6.5%) and the U.S. Department of Commerce confirm America's first purpose-built quantum foundry, supported by a proposed $1 billion CHIPS award.
• NVIDIA (NVDA 223.88, +0.41, +0.2%) beat EPS expectations by $0.12, beat revenue expectations, guided Q2 revenues above consensus, increased its share repurchase authorizations by $80 billion, and increased its dividend.
• Walmart (WMT 127.30, -3.55, -2.7%) reported EPS in-line, beat revenue expectations, guided Q2 EPS below consensus, and reaffirmed FY27 EPS guidance.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mixed showing on Thursday with South Korea's Kospi (+8.4%) rebounding strongly after a last-minute labor agreement at Samsung Electronics averted a labor strike. Japan's Nikkei: +3.1%, Hong Kong's Hang Seng: -1.0%, China's Shanghai Composite: -2.0%, India's Sensex: -0.2%, South Korea's Kospi: +8.4%, Australia's ASX All Ordinaries: +1.4%.

In news:

• Softbank soared nearly 20% in Japan after it was reported that OpenAI will file for an IPO.
• Japan's extra budget is expected to reach JPY3 trillion, but Prime Minister Takaichi has not confirmed that amount yet.
• Australia lost jobs in April, leading the market to push out its forecast for the next rate hike from the Reserve Bank of Australia to August from June.
• Bank Indonesia raised its policy rate by 50 basis points to 5.25% against expectations for a smaller increase.

In economic data:

• Japan's flash May Manufacturing PMI 54.5, as expected (last 55.1) and flash Services PMI 50.0 (last 51.0). April trade surplus JPY240 bln (expected deficit of JPY230 bln; last surplus of JPY90 bln). April Imports 9.7% yr/yr (expected 8.3%; last 10.9%) and Exports 14.8% yr/yr (expected 9.3%; last 11.5%). March Core Machinery Orders -9.4% m/m (expected -7.7%; last 13.6%); 5.9% yr/yr (expected 4.5%; last 24.7%)
• South Korea's April PPI 2.5% m/m (last 1.7%); 6.9% yr/yr (last 4.1%)
• Hong Kong's April CPI -0.1% m/m (last 0.0%); 1.7% yr/yr (last 1.7%)
• Australia's flash May Manufacturing PMI 50.2 (last 51.3) and flash Services PMI 47.7 (last 50.7). April Employment Change -18,600 (expected 16,700; last 23,300) and full Employment Change -10,700 (last 63,400). April Unemployment Rate 4.5% (expected 4.3%; last 4.3%) and April Participation Rate 66.7% (expected 66.8%; last 66.8%). April Credit Card Spending 2.9% yr/yr (last 2.1%)
• New Zealand's April trade surplus NZD1.92 bln (expected NZD980 mln; last NZD430 mln)
• India's flash May Manufacturing PMI 54.3 (last 54.7) and flash Services PMI 58.9 (last 58.8)

Major European indices trade in the red. STOXX Europe 600: -0.3%, Germany's DAX: -0.7%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.6%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: -0.3%.

In news:

• Flash May PMI readings from the region showed notable weakening with Germany's Manufacturing PMI (49.9), France's Manufacturing PMI (48.9), and U.K.'s Services PMI (47.9) coming in below 50.0, reflecting a contraction. The weak readings are fueling speculation about a potential contraction for Q2.
• European Central Bank policymaker Rehn said that a rate hike may be needed to preserve credibility.

In economic data:

• Eurozone's flash May Manufacturing PMI 51.4 (expected 51.7; last 52.2) and flash Services PMI 46.4 (expected 47.8; last 47.6). March Current Account surplus EUR14.9 bln (expected EUR26.3 bln; last EUR25.6 bln). Q1 Labor Cost Index 3.3% yr/yr (last 3.3%) and March Construction Output 0.78% m/m (last -0.77%)
• Germany's flash May Manufacturing PMI 49.9 (expected 51.0; last 51.4) and flash Services PMI 47.8 (expected 47.1; last 46.9)
• U.K.'s flash May Manufacturing PMI 53.7 (expected 52.9; last 53.7) and flash Services PMI 47.9 (expected 51.7; last 52.7)
• France's flash May Manufacturing PMI 48.9 (expected 52.1; last 52.8) and flash Services PMI 42.9 (expected 46.6; last 46.5)
• Swiss Q1 Industrial Production -7.1% yr/yr (expected 0.5%; last -0.4%)

[BRIEFING.COM] Stocks posted a strong session today, with the S&P 500 (+1.1%), Nasdaq Composite (+1.5%), and DJIA (+1.3%) finishing near their best levels as tech and mega-cap names rebounded from recent weakness while an improving macro backdrop supported broader market gains.

Investors bought into semiconductor stocks from the opening bell, with NVIDIA's (NVDA 223.33, +2.72, +1.23%) earnings report after the close acting as a catalyst amid expectations for another blowout quarter. Advanced Micro Devices (AMD 447.58, +33.53, +8.10%) and Intel (INTC 118.96, +8.16, +7.36%) were among the information technology sector's (+1.9%) top performers, as the PHLX Semiconductor Index (+4.5%) moved into positive territory for the week.

Several mega-cap names elsewhere also received some "buy-the-dip" attention this morning, including Tesla (TSLA 417.26, +13.15, +3.25%) and Amazon (AMZN 265.01, +5.67, +2.19%), helping the Vanguard Mega Cap Growth ETF (+1.4%) move into positive week-to-date territory as well.

The consumer discretionary sector (+2.5%) was already off to a strong start as a result.

Momentum accelerated just before midday after President Trump told reporters on Air Force One that the U.S. is in the "final stages" of talks on Iran, which sent oil prices and Treasury yields sharply lower after both had already been trending modestly downward.

Crude oil futures settled today's session $5.96 lower (-5.7%) at $98.19 per barrel, and the 10-year note yield settled down ten basis points to 4.57%.

Cruise lines such as Norwegian Cruise Line (NCLH 16.04, +1.24, +8.42%) and Carnival (CCL 26.04, +2.14, +8.98%) moved sharply higher, while homebuilders including Lennar (LEN 87.32, +4.32, +5.20%) and D.R. Horton (DHI 141.78, +7.06, +5.24%) also outperformed, helping the consumer discretionary sector build on its strong start and finish as the best-performing S&P 500 sector.

The iShares U.S. Home Construction ETF finished 4.5% higher.

The intraday retreat in yields and oil prices helped the broader market move firmly higher after a somewhat muted start. United Airlines (UAL 98.02, +8.90, +9.99%) and Delta Air Lines (DAL 74.12, +6.36, +9.39%) were among the best-performing S&P 500 components, contributing to strength in the industrials (+1.2%), while a rebound in container and packaging names pushed the materials sector (+1.4%) higher, and the real estate sector (+1.2%) benefited from the retreat in yields.

Weakness was limited to the energy sector (-2.6%) amid the plunge in oil prices, while the defensive consumer staples (-1.0%) and health care (-0.1%) sectors were overlooked in favor of more growth-oriented stocks today.

The consumer staples sector was also pressured by weakness in Target (TGT 122.33, -4.91, -3.86%) despite the company posting a solid beat-and-raise earnings report, while Walmart (WMT 130.85, -3.35, -2.50%) traded lower ahead of its earnings tomorrow morning.

Outside of the S&P 500, the Russell 2000 (+2.6%) and S&P Mid Cap 400 (+1.9%) outperformed amid the more favorable interest rate backdrop.

Stocks posted wins on multiple fronts today, which helped the major averages move into positive territory for the week. While there is still a lack of clarity around the state of negotiations between the U.S. and Iran, today's slide in oil prices alleviated some upward pressure on Treasury yields that were becoming increasingly viewed as a material headwind for equities.

Additionally, investors continued to buy dips across semiconductor and mega-cap stocks, with NVIDIA's upcoming earnings release serving as an additional potential catalyst for the group.

U.S. Treasuries climbed on Wednesday, bouncing from a slide that lifted yields to fresh 2026 highs earlier this week. The market held its ground through today's $16 billion 20-year bond auction, which met good demand, while the April FOMC Minutes showed some division among policymakers about the future rate path, which was not a surprise. The 2-year note yield settled down eight basis points to 4.04%, and the 10-year note yield settled down ten basis points to 4.57%. 

• Russell 2000: +13.5% YTD
• Nasdaq Composite: +13.0% YTD
• S&P Mid Cap 400: +10.1% YTD
• S&P 500: +8.6% YTD
• DJIA: +4.1% YTD

Reviewing today's data:

• April Pending Homes Sales 1.4% (Briefing.com consensus 1.6%); Prior was revised to 1.7% from 1.5%