Indexes closed mixed. S&P 500 slipped 0.4% to 5,842. Dow Jones Industrial Average fell 0.8% to 41,210. Nasdaq Composite edged up 0.1% to 18,915, buoyed by late-session tech buying.
Top gainers: NVDA (+4.2%) on refreshed AI infrastructure guidance, AMD (+3.1%) following supply chain upgrades, and RTX Corp (+2.8%) on defense contract wins. Top losers: META (-3.9%) after ad-revenue guidance cut, INTC (-3.4%) on delayed node rollout, and LMT (-2.7%) on budget reallocation fears.
Sector rotation accelerated. Capital rotated out of mega-cap software and consumer discretionary into semiconductors, industrials, and defense. Utilities and consumer staples held flat, signaling defensive hedging alongside growth bets. Energy underperformed as WTI crude dipped 1.3% to $78.40/bbl on rising OPEC+ output forecasts.
Economic data delivered mixed signals. April PCE core inflation printed at 2.8% YoY, matching consensus but stalling disinflation momentum. Q1 GDP revised to +2.1% from +1.9%. Weekly jobless claims came in at 234K, slightly below the 238K forecast. The Atlanta Fed’s GDPNow tracker nudged down to +2.0% for Q2.
FOMC chatter dominated the tape. Chair Powell reiterated a “data-dependent” stance, signaling no rate move until Q3 unless labor or inflation shows a sharp deviation. Markets now price in a 25bps cut in September, down from 40bps last week. Treasury yields moved sideways: 10Y at 4.31%, 2Y at 4.15%. The yield curve remains inverted by 16bps, reflecting persistent near-term policy caution.
Tariff headlines flared overnight. The administration expanded 25% levies on imported EVs and select semiconductor components, citing national security and domestic manufacturing targets. Auto and tech supply chains are pricing in margin compression. Trade partners signaled retaliatory measures targeting agricultural and aerospace exports.
Bottom line: Range-bound trading persists. Macro crosscurrents—sticky inflation, delayed easing, and trade friction—are keeping volatility elevated. Position for earnings dispersion, not broad momentum. Volume ran 12% above the 30-day average, confirming institutional repositioning. Watch PCE revisions and June non-farm payrolls for the next directional catalyst.
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