The S&P 500 Index ($SPX) (SPY) today is up +0.23%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.26%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.31%. September E-mini S&P futures (ESU26) are up +0.27%, and September E-mini Nasdaq futures (NQU26) are up +0.21%.

Stock indexes are moving higher today, with the S&P 500 posting a 1-month high following today’s US economic news, which showed that June producer prices rose less than expected and the July Empire manufacturing survey rose more than expected.

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Strength in technology stocks is also positive for the broader market, following strong earnings results from ASML, which offered fresh evidence of the relentless demand for chips needed for the global artificial intelligence buildout. ASML is the only maker of sophisticated lithography machines needed to manufacture advanced semiconductors.

Gains in the broader market are limited today amid weakness in chipmakers. Also, health insurance stocks are under pressure after Elevance Health plunged as its updated guidance fell short of the second-quarter beat.

US MBA mortgage applications fell -2.7% in the week ended July 10, with the purchase mortgage sub-index down -7.3% and the refinancing mortgage sub-index up +3.5%. The average 30-year fixed rate mortgage rose +7 bp to 6.65% from 6.58% in the prior week.

US Jun PPI final demand eased to +5.5% y/y from +6.0% y/y, weaker than expectations of +6.2% y/y. Jun PPI ex food and energy rose +4.7% y/y, weaker than expectations of +5.1% y/y.

The US Jul Empire manufacturing survey of general business conditions rose +9.9 to 15.6, stronger than expectations of 9.2.

Dovish comments today from New York Fed President John Williams were supportive for stocks and bonds when he said, "Inflation is unquestionably too high, but there are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters."

Chinese economic news was mixed for global growth prospects. On the negative side, China's Q2 GDP rose +4.3% y/y, slightly weaker than expectations of +4.4% y/y and the smallest increase in 3.5 years. Also, Jun new home prices fell by -0.15% m/m, marking the 37th consecutive month of declines. On the positive side, China's industrial production rose 5.3% y/y, stronger than the expected 4.6% y/y. Also, Jun retail sales unexpectedly rose +1.0% y/y, stronger than expectations of -0.1% y/y. In addition, the Jun surveyed jobless rate unexpectedly fell -0.1 to 5.0%, showing a stronger labor market than expectations of no change at 5.1%.

On the negative side, WTI crude oil (CLQ26) is up nearly +1%, adding to this week’s +10% surge, as the interim peace deal between the US and Iran has effectively collapsed. The US maintained its naval blockade of Iran and launched another wave of airstrikes on Iran today, the fifth straight day of attacks. President Trump pledged to intensify the bombardment until Iran stops attacking ships in the Strait of Hormuz and agrees to open the waterway. Iran responded with missile and drone attacks against Kuwait.

The outlook for strong Q2 earnings, which will begin this week, is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2.

The markets are discounting a 10% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.

Overseas stock markets are mixed today. The Euro Stoxx 50 is down -0.02%. China's Shanghai Composite closed down -0.29%. Japan's Nikkei-225 Stock Average closed up +1.49%.

September 10-year T-notes (ZNU6) today are up +5 ticks, and the 10-year T-note yield is down -2.6 bp to 4.563%. T-notes recovered from early losses today and moved higher after US Jun producer prices rose less than expected, a dovish factor for Fed policy. T-notes added to their gains today when New York Fed President John Williams said, “there are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters." T-notes initially moved lower on today’s strength in WTI crude oil prices, which boosts inflation expectations and is bearish for T-notes.

European government bond yields are mixed today. The 10-year German bund yield rose to a 1.75-month high of 3.148% and is up +2.4 bp to 3.138%. The 10-year UK gilt yield is down -0.5 bp to 4.972%.

Eurozone May industrial production unexpectedly fell -0.2% m/m, weaker than expectations of a+0.2% m/m increase.

ECB Governing Council member and Bundesbank President Joachim Nagel said, "The development of energy prices is a decisive factor in determining the future inflation outlook, and monetary policy will maintain its vigilant stance."

Swaps are discounting a 7% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.

Software stocks are climbing today, recovering some of Tuesday’s sharp losses. Atlassian Corp (TEAM) and Thomson Reuters (TRI) are up more than +4%, and Adobe Systems (ADBE) is up more than +3%. Also, Workday (WDAY) is up more than +2%, and ServiceNow (NOW), Oracle (ORCL), Salesforce (CRM), Autodesk (ADSK), and Microsoft (MSFT) are up more than +1%.

Chipmakers and AI-infrastructure stocks are under pressure today, a negative factor for the broader market. The iShares Semiconductor ETF (SOXX) is down -0.28%. Sandisk (SNDK) is down more than -4% to lead losers in the Nasdaq 100, and Western Digital is down more than -3%. Also, Micron Technology (MU), Seagate Technology Holdings Plc (STX), and Marvel Technology (MRVL) are down more than -2%, and Lam Research (LRCX), Applied Materials (AMAT), and KLA Corp (KLAC) are down more than -1%.

Elevance Health (ELV) is down more than -8% to lead health insurance stocks lower after Evercore ISI said the company’s updated guidance was “lower” than the beat in the second quarter. Also, Centene (CNC) and Molina Healthcare (MOH) are down more than -3%, and Humana (HUM), Cardinal Health (CAH), and Cigna Group (CI) are down more than -1%.

PayPal Holdings (PYPL) is up more than +15% to lead gainers in the S&P 500 after Reuters reported Stripe and Advent International have made a joint offer to buy the company for $53 billion, or $60.50 per share.

BlackRock (BLK) is up more than +7% after reporting Q2 adjusted EPS of $13.91, well above the consensus of $12.66.

Karman Holdings (KRMN) is up more than +7% after S&P Dow Jones Indices reported that the company will replace BrightSpring Health Services in the S&P SmallCap 600 effective before the opening of trading on Friday, July 17.

Lionsgate Studios (LION) is up more than +6% after Reuters reported the company is exploring a sale and has attracted takeover interest from Bollore Group.

Cintas (CTAS) is up more than +5% after reporting Q2 revenue of $2.91 billion, better than the consensus of $2.87 billion, and forecasting 2027 revenue of $12.10 billion to $12.25 billion, the midpoint above the consensus of $12.12 billion.

3M Co (MMM) is up more than +3% to lead gainers in the Dow Jones Industrials after announcing a strategic partnership with Microsoft focused on AI data center infrastructure and enterprise transformation.

Pentair Plc (PNR) is down more than -17% to lead losses in the S&P 500 after cutting its full-year adjusted EPS forecast to $4.60 to $4.80 from a previous forecast of $5.30 to $5.40, well below the consensus of $5.33.

Phoenix Education Partners (PXED) is down more than -11% after cutting its 2026 net revenue forecast to $1.02 billion to $1.03 billion from a previous estimate of $1.03 billion to $1.04 billion.

Travelers Cos (TRV) is down more than -2% to lead losers in the Dow Jones Industrials after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $290.

Bank of New York Mellon Corp/The (BNY), BlackRock Inc (BLK), Cintas Corp (CTAS), Conagra Brands Inc (CAG), Elevance Health Inc (ELV), First Horizon Corp (FHN), JB Hunt Transport Services Inc (JBHT), Johnson & Johnson (JNJ), M&T Bank Corp (MTB), Morgan Stanley (MS), PNC Financial Services Group Inc (PNC), Progressive Corp/The (PGR), United Airlines Holdings Inc (UAL).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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