There is a bit of rotation on the tape this afternoon, with the Dow Jones Industrial Average (DJI) outperforming as investors rotate out of technology stocks. The Russell 2000 (RUT) is also one of the best performing indices this afternoon, giving credence to the notion that rotation is underway.

Mega caps are driving the S&P500's and Nasdaq 's underperformance, with the exception of Apple (AAPL), as investors take profits in many of the names that had a strong run in June.

The only two sectors moving lower are the mega cap heavy Communication Services (XLC) and Technology (XLK) sectors.  Meanwhile, Materials (XLB) is well in the lead.

Packaging and paper stocks are giving the Materials sector a boost, accompanied by chemical stocks.

The Big Beautiful Bill was passed in the senate today following a tie breaking vote from Vice President Vance. Now it is back to the House of Representatives for another vote.

 

Economic Data

ISM Manufacturing PMI for June rose 0.5 points from May to 49 and came in above forecasts of 48.8.

Notable Changes:

• Production rose to 50.3 from 45.4
• Inventories improved to 49.2 from 46.7
• New Order fell to 46.4 from 47.6
• Employment fell to 45 from 46.8
• The Price Gauge rose to 69.7 from 69.4

Notably, the comments section still shows concerns over tariffs as there were 9 mentions.

Job openings rose by 374K to 7.769M in May and were above estimates of 7.3M. This comes despite a 39K drop in federal government openings, showing that the private sector is still able to compensate for government reductions.

The Dallas Services Index rose 5.7 points to -4.4 in June. While employment fell to -1.2 from -0.2 and capital expenditure rose to 7.5 from 4.4, the outlook for future revenue, which rose to 33.4 from 27.2, more than compensated for the difference.

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