Thursday’s session was nonchalant but not an uneventful one. However, it was the correct medicine for the market. The hottest stock in the NASDAQ-100 (NDX) took it on the chin, and that paved the way for investors to give love to other parts of the market. 

The sell-off in VanEck Vectors Semiconductor ETF (SMH) hovering right above the 20-day exponential moving average.

Buyers zeroed in on software (particularly in cybersecurity).

Don’t look now, but the iShares Expanded Tech-Software Sector ETF (IGV) has been up four out of the last five sessions and down four out of the previous five years.

“You Like Me”

The rally broadened out, and up volume outpaced down volume.

The gains were insignificant, but almost all the boxes were checked off.

Today’s Session

May PCE was 2.6% y/y on both a headline and core basis. Based on the Fed’s median year-end projections, headline sits at their estimate of 2.6% and core is below.

This could be viewed as a good omen for rate cuts, as PCE is the FED’s preferred metric for inflation. The reaction can be seen with the 10-year interest rate (TNX) falling by 2.5 basis points this morning to a yield of 4.26%.