Major indices are retreating as investors rotate out of unprofitable Technology (XLK) names. The Dow Jones (DJI) is also pulling back from yesterday’s record high.

The Magnificent Seven is once again under pressure today and contributing to the Nasdaq’s underperformance. Tesla (TSLA) is the worst performer in the group driven by recent bearish developments which include a plunge in electrical vehicle sales in China.

Four sectors are in the green this afternoon. Energy (XLE) is in the lead as oil and natural gas prices rise. Defensive sectors such as Consumer Staples (XLP) and Health Care (XLV) are also moving higher as investors rotate.

On the flip side, Technology (XLK) and Consumer Discretionary (XLY) are lagging due to weakness in their biggest components.

Rate Cut Update

Investors are currently pricing in a coin flip on whether the Fed cuts rates next meeting.

Fed Kashari made comments today indicating inflation at around 3% is still too high, while also noting some pressure in the labor market.

Meanwhile, the Ten Year Treasury Yield (TNX) is holding above its 50 MA, rising 3.3 basis points, and sitting just below 4.10%.

The 30-year bond auction concluded with the yield slightly falling to 4.694%, a minor dip from the previous yield of 4.734%. This shows a modest improvement in the bond’s market outlook for long-term instruments.