Major indices are mostly moving lower following this morning’s economic data. Small caps, in the Russell 2000, are still edging into the green.

The magnificent seven are all moving lower. Nvidia (NVDA) and semiconductor names are making a move lower after news that China will restrict H200 chip purchases to special circumstances. Meanwhile, Tesla (TSLA) is moving lower on reports of the company struggling to offload a third of the initial vehicles it imported to India last year.

Five sectors are moving higher, with Energy (XLE) in the lead as oil prices rise on potential escalation in Iran. However, while oil prices are higher, natural gas is seeing a nearly 9% decline this afternoon driven primarily by lower demand from Freeport LNG in Texas.

On the other hand, Technology (XLK) is the laggard. The weakness of semiconductors and software names is dragging the sector lower. The other underperformer is Consumer Discretionary (XLY), which is being driven lower by its mega cap components and travel service stocks.

In other news, the Supreme Court once again delayed the ruling on Trump’s tariffs.

As anticipated, the National Cybersecurity Strategy is set to expand the United States’ offensive cyberwarfare capabilities by enlisting private companies.

Economic Data

Existing home sales rose 5.1% M/M in December following a 0.7% rise in November. Additionally, unsold inventory fell by 18.1% M/M.

This morning’s PPI number was primarily driven by goods, rising 0.9% M/M, with services flat M/M.

The uptick in headline PPI was mainly due to higher energy prices. More than half the rise in final goods are being attributed to gasoline, rising 10.5% M/M. This was partially offset by continued downward pressure in food prices.

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