Stocks closed lower yesterday with all of the indexes in the red.

After the Nasdaq and the S&P 500 closed at records over the previous few days (the Nasdaq as recently as Tuesday), with both closing up for the week last week, the Dow fell last week. Same goes for the small-cap Russell 2000 and mid-cap S&P 400.

Some profit taking was bound to happen after a multi-week rally off of mid-April's pullback lows. But the recent price action has been uneven. Indexes with more big tech exposure have been noticeably outperforming those with lesser exposure.

But even big tech was down yesterday with plenty of semiconductors losing ground (although not NVIDIA).

It was a mixed bag of earnings reports yesterday. Before the open we heard from Abercrombie & Fitch and DICK'S Sporting Goods. ANF posted a positive EPS surprise of 28.9%, and a positive sales surprise of 7.19%. They soared by 24.32% in the regular session. DKS posted a positive EPS surprise of 12.2%, and a positive sales surprise of 2.58%. They gained 15.91% in the regular session.

But after the close, Salesforce posted a positive EPS surprise of 2.52%, and a negative sales surprise of -0.07%. It was their first negative sales surprise in 18 years. Although, for context, that translated to a quarterly EPS growth rate of 44.4% vs. this time last year, and a sales growth of 10.7%. Nonetheless, they were down -16% in after-hours trade.

We'll get another 132 companies on deck to report today with familiar names like Costco, Dell, and Marvell Technology to name a few.

In other news yesterday, MBA Mortgage Applications declined by -5.7% w/w with purchases down -1.1% and refi's down -13.6%.

The Richmond Fed Manufacturing Index came in at 0, an improvement from last month's -7 and views for -6.

The Survey of Business Uncertainty showed U.S. firms expecting year-ahead sales growth to come in at 3.82% vs. last month's pace of 3.76%, while employment growth is expected to be 4.14% vs. last month's 4.04%.

And the Beige Book report showed 10 of the 12 regional economies reporting slight or modest growth (2 showed no change). But businesses reported being "somewhat more pessimistic" this time vs. the previously reported "cautiously optimistic."

Today we'll get the second estimate for Q1'24 GDP. Last time was 1.6%. Estimate this time is 1.5%. We'll also get the International Trade in Goods report, Weekly Jobless Claims, Corporate Profits, Retail and Wholesale Inventories, and Pending Home Sales.

We'll also hear from Fed policymakers John Williams and Lorie Logan today.

The report everybody is really waiting for, however, is tomorrow's Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge. That will show whether inflation is continuing to head back down, or if progress has stalled. That comes out tomorrow at 8:30 AM ET.

In the meantime, we'll see if the market can regroup after yesterday's decline.

See you tomorrow,