The market remains in negative territory with five sectors trading lower while Consumer Staples (XLP) is the only group with steady gains. Investors are showing interest in the countercyclical group amid ongoing volatility in the AI trade. Other pockets of strength include Financials (XLF), Utilities (XLU), Energy (XLE), and Health Care (XLV) as investors opt for lower volatility and defensive sectors while technology names remain unsettled.

Technology (XLK) is the worst performing sector driven by a sharp pullback in semiconductor stocks after this week’s show of strength. The PHLX Semiconductor Index (SOX) narrowed this week’s gain to 5.7%.

The 10-year yield is getting close to its multi-decade high with continued concerns about a potential 50-basis point rate hike in December.

New York Fed President Williams (FOMC voter) and Chicago Fed President Goolsbee (2027 FOMC voter) both said the Fed has work to do to lower inflation back to the 2% target.

NVDA Update

There were reports circulating this morning that Nvidia’s (NVDA) board approached Arm (ARM) CEO Rene Haas about succeeding Jensen Huang. Notably, prediction markets have Rene Haas as the potential winner for the job.

Have a great weekend!