MARKET WRAP

It was a sea of red on Wall Street today after the latest inflation report indicated a September rate cut is all but set in stone.

Investors rotated out of mega-cap stocks and into small caps. The S&P 500 fell 0.88%, while the Nasdaq fell 1.95%. The Russell 2000 soared 3.71% for its best day of the year.

CNBC notes that the move was triggered by the lowest consumer price index reading in more than three years and raising the odds of a September rate cut to nearly 90%, per the CME FedWatch Tool.

The so-called Mag 7 stocks, Apple, Nvidia, Meta, Amazon, Microsoft, Alphabet, and Tesla, were all down by at least 2%, with Tesla down more than 8%. We’ll have more on Tesla later.

On the other hand, housing stocks soared as the yield on the U.S. 10-year dropped to 4.2%.

The ITB US Home Construction ETF was up more than 6% in the session. DR Horton, Lennar, and PulteGroup were among the top stocks in the S&P 500 today, all up around 7%.

Biotech also rallied with today's move in yields. The IBB biotech ETF was up 2.3%. CNBC notes that Biotech companies depend on debt, especially at the clinical stage. Therefore, they tend to perform better when interest rates are lower.

On the sector front, Real Estate was up 2.7%, making it the best performer. Utilities and Materials followed, up 1.75% and 1.4%, respectively.

Technology was the worst performer, down 2.2%.

MRKT MATRIX: July 11, 2024

Today’s Top Stories:

• S&P 500 falls from record as investors rotate out of 2024 tech winners (CNBC)

• The S&P 500 hasn’t been this overbought since late 2023 — signaling trouble ahead (CNBC)

• Tesla Delays Robotaxi Event in Blow to Musk’s Autonomy Drive (Bloomberg)

• Delta shares fall as a glut of flights drives down fares despite high demand (CNBC)

• PepsiCo, After Years of Price Hikes, Sounds an Alarm on Consumer Spending (WSJ)

• Costco hikes membership fee for the first time since 2017 (CNBC)

• S&P 500 Financials Sector Q2 Earnings Preview: Banks Expected to Report Largest Decline (FactSet)

Today’s MRKT Call is Presented by FactSet

The Great Unwind of Big Tech Begins?

Guy Adami and Carter Worth break down the top market headlines and bring you stock market trade ideas for Thursday, July 11th.

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