The S&P 500 and Nasdaq are retreating from yesterday’s record as the 10-year yield hit a 24-year high.

Defensive sectors continue to offer the strongest counterweight; gains are led by Health Care (XLV) followed by Consumer Staples (XLP). On the other end of the spectrum, Industrials (XLI) have struggled since the start of the session. Meanwhile, the Technology (XLK) sector has from its early lows and now is near the flat line with memory names outperforming following yesterday’s weakness.

The strong action in memory names comes after AMD CEO Lisa Su reinforced the demand for high-bandwidth memory after saying Samsung and SK Hynix are crucial to its data-center ambitions.  In addition, Micron (MU) received a price target increase from D.A. Davidson this morning.

Economic Data

The 1-year inflation expectations reached their highest level since May 2023. The 3-year expectations rose to 3.3%, while five-year expectations stayed at 3.0%.

The latest Redbook data shows continued strength and resilience in consumer spending with same-store sales increasing 8.3% YoY.

All eyes on the FOMC minutes which could shed some light on how firmly officials support further rate hikes in their recent meeting. October hike odds have cooled sharply to 20% from 55% after softer inflation and payroll data.