Main US indexes red; Nasdaq off most, down >2%
Tech weakest S&P 500 sector; Energy leads gainers
Dollar dips; bitcoin slides ~7%; crude gains ~1%; gold up >5%
US 10-Year Treasury yield edges up to ~4.27%
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SEMIS COULD CONTINUE TO SEE MORE SUPPORT THAN SOFTWARE Large-capitalization U.S. semiconductor stocks have recently sharply outperformed software companies, and semis could continue to have the price momentum and fundamentals to support them further, according to Jessica Rabe, co-founder of DataTrek Research. Semis have been supported by increased demand to build out infrastructure behind generative artificial intelligence, while software firms "risk being disrupted by advances in AI tools that businesses can use instead of relying on these companies," she writes in a note Tuesday. "Over the last 100 trading days, Semis outperformed Software by 56.0 points, an all-time high and almost 5 standard deviations (59.3 points) above the long-run average," Rabe notes, using the VanEck Semiconductor exchange-traded fund SMH.P and the iShares Expanded Tech-Software ETF IGV.P for comparison. While in the 2010s, the performance of the two groups had been more even, semis have been outperforming widely since 2020 and especially since 2023, she notes. And even though software may look like a good buy for investors seeking out a contrarian or oversold trade, software's "unprecedented underperformance suggests that its underlying fundamentals face structural headwinds that don’t necessarily support an immediate 'reversion to the mean' trade," she says.
(Caroline Valetkevitch)*****
EARLIER ON LIVE MARKETS:
SILVER STARING AT A STEEP CLIMB CLICK HERE
INDIVIDUAL INVESTORS' SHRINKING CASH STASH A CONCERN CLICK HERE
NASDAQ, S&P SLUMP AS SOFTWARE STOCKS DROP CLICK HERE
BOFA SELL SIDE INDICATOR STILL SHOWS ROOM FOR MORE MARKET GAINS CLICK HERE
HOTELS FIRE UP THEIR AI GAME AS FIFA 2026 IGNITES BOOKING RUSH CLICK HERE
BENCHMARK TREASURY YIELD: IS THE LID STARTING TO COME OFF THIS BUBBLING CAULDRON? CLICK HERE
PRICEY COPPER MINERS FACE ROTATION RISKS, SAYS MS CLICK HERE
EUROPEAN STOCKS JUMP, MINERS LEAD ON GOLD BOUNCE CLICK HERE
EUROPE BEFORE THE BELL: BUOYANT MOOD CLICK HERE
TRUMP CUTS INDIA DEAL, AUSTRALIA HIKES CLICK HERE
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)