Closing Stock Market SummaryThe stock market started this holiday-shortened week on a mostly softer note. Initially, the market seemed poised for a stronger showing after participants learned over the weekend that President Biden and House Speaker McCarthy reached a debt ceiling agreement. Enthusiasm quickly dissipated, though, with uncertainty about the deal passing in both chambers of Congress still weighing on sentiment.
The House is expected to vote on the debt ceiling deal Wednesday night and the Senate is expected to hold a vote this weekend.
The lingering uncertainty about the passage of the debt ceiling deal, along with ongoing concerns about the economic outlook, kept the broader market in check. Market participants received the Consumer Confidence Index for May today, which fell from last month's reading and showed that expectations remain "gloomy."
Also, worries about Fed policy came into focus after Richmond Fed President Thomas Barkin (not an FOMC voter) said he has one of the higher rate forecasts on the committee and he hasn't backed off of that, according to CNBC.
Mega cap stocks, along with other growth stocks, were a big source of support and helped to drive the relative outperformance of the S&P 500 and Nasdaq. The S&P 500 was able to maintain a position above 4,200 on a closing basis after slipping below that level a few times today.
Market breadth reflected underlying weakness in the market. Decliners led advancers by an 11-to-10 margin at the NYSE and a 4-to-3 margin at the Nasdaq.
Most of the S&P 500 sectors closed with losses while the consumer discretionary (+0.8%) and information technology (+0.6%) sectors led the outperformers. The former was supported by gains in Amazon.com (AMZN 121.66, +1.55, +1.3%) and Tesla (TSLA 201.16, +7.99, +4.1%), the latter of which was reiterated Overweight at Barclays.
The info tech sector got a big boost from NVIDIA (NVDA 401.11, +11.65, +3.0%), which reached a $1 trillion market cap at its high today after announcing a new DGX GH200 AI Supercomputer.
The consumer staples (-1.1%) and energy (-0.9%) sectors were the top laggards today.
Treasuries settled with gains across the curve, adding some support for the mega caps and other growth stocks. The 2-yr note yield fell seven basis points to 4.49% and the 10-yr note yield fell 11 basis points to 3.70%.
- Nasdaq Composite: +24.4% YTD
- S&P 500: +9.5% YTD
- Russell 2000: +0.3% YTD
- S&P Midcap 400: +0.4% YTD
- Dow Jones Industrial Average: -0.3% YTD
Reviewing today's economic data:
- The FHFA Housing Price Index rose by 0.6% in March from a revised 0.7% increase in February (from 0.5%)
- The S&P Case-Shiller Home Price Index declined 1.1% in March (consensus -2.3%) following a 0.4% increase in February
- The Conference Board's Consumer Confidence Index dipped to 102.3 in May (consensus 99.5) from an upwardly revised 103.7 (from 101.3) in April. In the same period a year ago, the index stood at 103.2.
- The key takeaway from the report is that expectations remain "gloomy," which incorporates a notable worsening in the outlook in May among consumers over 55 years of age.
Advance Auto (AAP) headlines the companies reporting earnings ahead of tomorrow's open.
Looking ahead to Wednesday, market participants will receive the following economic data:
- 7:00 ET: Weekly MBA Mortgage Index (prior -4.6%)
- 9:45 ET: May Chicago PMI (consensus 46.1; prior 48.6)
- 10:00 ET: April job openings (prior 9.590 mln)
- 14:00 ET: May Fed Beige Book
