Closing Stock Market SummaryThe stock market closed on a softer note today. The price action in the mega caps drove a lot of the index level moves, as well as a sense the market is still due for some consolidation. Notwithstanding the losses seen in the mega cap stocks, the major indices held up fairly well. The market-cap weighted S&P 500 fell 0.5%, but the Invesco S&P 500 Equal Weight ETF (RSP) fell by a modest 0.1%.
Market participants were also digesting Fed Chair Powell's semiannual monetary policy testimony before the House Financial Services Committee, but his comments didn't contain anything too surprising; therefore, they did not move the market much. Specifically, he reiterated that there is still a long way to go to get inflation back down to the 2.0% target and that nearly all Fed members anticipate the need for additional tightening before year end.
Following an early slide, there was a rebound effort in the afternoon trade as stocks pared their losses in response to falling Treasury yields, which reacted to a strong $12 billion 20-year bond reopening at 13:00 ET. The 2-yr note yield, which flirted with 4.76% earlier, fell to 4.67% before settling the session up one basis point at 4.71%. The 10-yr note yield, which hit 3.79% earlier, fell to 3.71% and settled down one basis point at 3.72%.
Selling in the stock market, however, picked up again in the final hour of trading on no news. Ultimately, the major indices all closed in negative territory.
The Vanguard Mega Cap Growth ETF (MGK), which had narrowed its loss to 0.6%, fell 1.1% today.
S&P 500 sector performance was mixed. The energy (+0.9%) and utilities (+0.8%) sectors held the top spots on the leaderboard at the close.
Meanwhile, lagging mega cap stocks pinned the communication services (-1.4%), information technology (-1.4%), and consumer discretionary (-1.2%) sectors at the bottom of the pack. Tesla (TSLA 259.46, -14.99, -5.5%), which has been on a tear, gaining 50% since May 24, was the main drag on the consumer discretionary sector after being downgraded by Barclays to Equal Weight from Overweight.
The information technology sector was also weighed down by its weak semiconductor components. The PHLX Semiconductor Index declined 2.7% with every component registering a loss. NVIDIA (NVDA 430.45, -7.63, -1.7%), up nearly 200% for the year, was among the more influential laggards from the space.
- Nasdaq Composite: +29.0% YTD
- S&P 500: +13.7% YTD
- Russell 2000: +5.8% YTD
- S&P Midcap 400: +5.3% YTD
- Dow Jones Industrial Average: +2.4% YTD
Reviewing today's economic data:
- The weekly MBA Mortgage Applications Index rose 0.5% with purchase applications rising 2.0% while refinancing applications fell 2.0%.
Looking ahead, market participants will receive the following economic data on Thursday:
- 8:30 ET: Weekly Initial Claims ( consensus 259,000; prior 262,000), Continuing Claims (prior 1.775 mln), and Q1 Current Account balance (prior -$206.80 bln)
- 10:00 ET: May Existing Home Sales (consensus 4.28 mln; prior 4.28 mln) and May Leading Indicators ( consensus -0.8%; prior -0.6%)
- 10:30 ET: Weekly natural gas inventories (prior +84 bcf)
- 11:00 ET: Weekly crude oil inventories (prior +7.92 mln)
Also, Fed Chair Powell will appear before the Senate Banking Committee at 10:00 a.m. ET.