The S&P 500 and the Dow Jones have distanced themselves from their lows and are showing resilience. The Nasdaq saw a sharp pullback at the open of the gate as chipmakers and AI-infrastructure stocks retreated. Historically, July has been the best month for the S&P 500 and it hasn’t seen a losing July since 2014. The index has averaged a 2.5% gain in July since 2005.

The Semiconductor Index (SOXX) is down today, driven by profit-taking in the start of the second half.

Six sectors are higher, driven by Financials (XLF), which is seeing strong action in fintech names and regional banks. The second best performing sector is Communication Services (XLC), which gains thanks to the impressive performance from its mega-cap components. Elsewhere, the Utilities (XLU) and Consumer Staples (XLP) sectors continue to lag.

The bounce off session lows could be attributed to Warsh’s remarks at the ECB forum in Portugal where he reaffirmed his commitment to price stability.

Economic Data

ADP came in a little light at +98k, below +118K expected, but showed all firm sizes seeing job gains for two consecutive months.

Nine sectors saw an increase in hiring with services leading the way while goods producing sectors slowed.

ISM Manufacturing PMI for June eased to 53.3 but continues in expansion territory. Orders and production decelerated but expanded while input prices saw the largest decline since 2022.

On the commentary section, 34% of the comments were positive and 66% were negative, with 50% of the panelists mentioning pricing volatility.

May construction spending increased +0.1% MoM, in-line with consensus but below +0.3% from April. Residential spending went up 0.4% while nonresidential flattened.