The stock market is grappling with digesting new information. However, bond yields have taken a meaningful dip, suggesting the Fed will start a new rate cutting cycle.

Right now, there is a 96% chance of a rate cut in September. Some Fed officials are still pushing against a series of cuts.

The ISM Service Report was a pleasant surprise. The index rose to 52 in August from 50.1 in July and above forecasts of 51. The rise was in part due to a surge in new orders. The reading indicated the highest expansion in the services sector since February.

The only sector moving lower is Utilities (XLU), while Real Estate (XLRE) remains flat. On the other hand Consumer Discretionary (XLY) is leading the pack.

It has been 100 trading days since the closing low of April 8^th and the market has risen over 25% since then. Historically, this tends to see the rally continue over the next year.