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Market Snapshot

https://www.briefing.com/stock-market-update

Dow 32991.99 -220.99 (-0.67%)
Nasdaq 12081.38 -49.74 (-0.41%)
SP 500 4132.16 -26.09 (-0.63%)
10-yr Note
NYSE Adv 1093 Dec 2240 Vol 2.2 bln
Nasdaq Adv 1949 Dec 2818 Vol 5.7 bln

Industry Watch
Strong: Communication Services, Consumer Discretionary
Weak: Health Care, Real Estate, Materials, Energy, Industrials, Utilities

Moving the Market

-- Oil prices turn negative after testing $120.00/bbl earlier on EU's agreement to ban 90% of Russian crude imports by the end of the year

-- Fed Governor Waller (FOMC voter) endorses policy rate above neutral rate by end of year

-- Resilience to early selling efforts

Closing Summary
31-May-22 16:05 ET
Dow -220.99 at 32991.99, Nasdaq -49.74 at 12081.38, S&P -26.09 at 4132.16

[BRIEFING.COM] A soft start for the stock market firmed up as the session progressed thanks to the stabilizing influence of the mega-cap stocks and a welcome pullback in crude oil prices, which flirted with $120.00/bbl early in the day before settling the session up just 0.1% at $114.93/bbl.

The pop in oil prices stemmed from a report that EU leaders had agreed to a ban on 90% of Russia's crude imports by the end of the year. That pop in prices stirred concerns about discretionary spending potential and inflation pressures persisting longer than expected. Consequently, there was an early push to do some selling following last week's huge gains.

At their lows of the morning, the Dow, Nasdaq, and S&P 500 were down 1.4%, 1.6%, and 1.3%, respectively. They didn't stay down -- or at least they didn't stay depressed. Instead, they demonstrated some resilience to selling efforts, which itself became a catalyst that attracted renewed buying interest that helped each of the indices edge their way into positive territory.

The upside momentum, however, didn't run abated like it did last week. There was more weakness beneath the surface than met the eye, evidenced by an advance-decline line that favored declining issues by a 2-to-1 margin at the NYSE and by a 7-to-5 margin at the Nasdaq. The relative strength of the mega-cap stocks stood out in the Vanguard Mega-Cap growth ETF (MGK), which slipped 0.3% versus a 0.9% decline for the Invesco S&P 500 Equal Weight ETF (RSP).

Today ultimately turned into a day of consolidation as market participants sat on the idea that there will be some key economic reports later this week, including the May ISM Manufacturing Index on Wednesday and the May Employment Situation Report on Friday.

Also, the trading action was stunted by a lack of market-moving corporate news and rising yields in the Treasury market, which were triggered by the early move in oil prices and a contention from Fed Governor Waller (FOMC voter) that he supports a policy rate above the neutral rate by the end of the year.

The 10-yr note yield settled the day up 10 basis points at 2.84% while the 2-yr note yield jumped eight basis points to 2.54%. The U.S. Dollar Index increased 0.1% to 101.77.

Reviewing today's economic data:

The Conference Board's Consumer Confidence Index dipped to 106.4 in May (Briefing.com consensus 103.7) from an upwardly revised 108.6 (from 107.3) in April. In the same period a year ago, the index stood at 120.0.
The key takeaway from the report is that inflation continues to be top of mind for consumers, which could pose downside risk for the economy if inflation pressures persist and curtail consumers' discretionary spending activity.
The S&P Case-Shiller Home Price Index was up 21.2% year-over-year in March (Briefing.com consensus 20.0%) following an upwardly revised 20.3% (from 20.2%) in February. The FHFA Housing Price Index increased 1.5% month-over-month in March following a downwardly revised 1.9% increase (from 2.1%) in February.
The May Chicago PMI checked in at 60.3 (Briefing.com consensus 55.5) versus 56.4 in April.

Looking ahead, market participants will receive the weekly Mortgage Applications Index, the Final IHS Manufacturing PMI for May, the May ISM Manufacturing Index, the April JOLTS - Job Openings Report, the April Construction Spending Report, and the Fed's Beige Book.

Dow Jones Industrial Average -9.3% YTD
S&P 500 -13.3% YTD
S&P 400 -11.5% YTD
Russell 2000 -16.6% YTD
Nasdaq Composite -22.8% YTD

Looking ahead to economic data
31-May-22 15:30 ET
Dow -117.62 at 33095.36, Nasdaq -8.20 at 12122.92, S&P -13.26 at 4144.99

[BRIEFING.COM] Entering the last half hour of trading for the month, the major indices have turned negative. Note that most of the major indices are in the green month-to-date thanks entirely to the rally we saw last week. The one exception is the Nasdaq, which is still down 1.8% for the month.

Looking ahead, market participants will receive several pieces of economic data tomorrow. The two releases that are apt to draw the most attention are the ISM Manufacturing Index for May and the JOLTS Job Openings report for April. The former is a gauge of manufacturing activity and the latter is a labor market indicator.

In coming months, the JOLTS report will take on added importance as a gauge of the Fed's success in tempering demand with its rate hikes.

The most important report of the week however awaits on Friday in the form of the May Employment Situation report.
Crude oil prices pulled back
31-May-22 15:00 ET
Dow -233.05 at 32979.93, Nasdaq -75.45 at 12055.67, S&P -25.35 at 4132.90

[BRIEFING.COM] The market moved to new session highs in the past hour but has been pulling back more recently on some modest but broader selling interest.

Notably, WTI Crude Futures, which tested $120.00/bbl earlier today, settled the session up just $0.16, or 0.1%, at $114.93/bbl. As prices pulled back, so, too, did the S&P 500 energy sector.

At its high today, the energy sector was up 2.2% but it is now down 1.3% for the session. Most stocks within the sector are now negative on the day including Chevron (CVX 174.99, -3.24, -1.8%) and Exxon (XOM 96.66, -0.96, -1.0%).

Separately, the Vanguard Mega Cap Growth ETF (MGK), which was up as much as 0.8% earlier today, is now down 0.2%.
Mosaic, fellow material/fertilizer peers higher on Tuesday
31-May-22 14:30 ET
Dow -45.50 at 33167.48, Nasdaq +33.43 at 12164.55, S&P +0.12 at 4158.37

[BRIEFING.COM] The S&P 500 (flat) is now hovering near last week's closing levels, albeit solidly off morning lows which had the index down about -1.28%.

S&P 500 constituents Mosaic (MOS 64.06, +4.21, +7.03%), Las Vegas Sands (LVS 35.93, +1.31, +3.78%), and Starbucks (SBUX 79.37, +2.66, +3.47%) dot the top of today's standings. MOS, and other fertilizer stocks, move higher on Tuesday, while casino stocks like LVS and casual dining stocks like SBUX get a decent boost today.

Meanwhile, California-based healthcare firm Illumina (ILMN 241.31, -16.75, -6.49%) is today's worst performer, underperforming alongside other biotech/healthcare names amid speculation that Senators Manchin and Schumer could renew discussions about an agreement for drug price control provisions.
Gold modestly lower to start holiday-abbreviated week
31-May-22 14:00 ET
Dow +4.89 at 33217.87, Nasdaq +44.19 at 12175.31, S&P +7.26 at 4165.51

[BRIEFING.COM] The major averages have squeaked above flat lines in recent trading, the tech-heavy Nasdaq Composite (+0.36%) holding a firm lead.

Gold futures settled $8.90 lower (-0.5%) to $1,848.40/oz owing in part to a modest move higher in both treasury yields and the greenback.

Meanwhile, the U.S. Dollar Index is up approx. +0.1% to $101.74.