There was a distinct air of rotation in US stock markets on Thursday as chipmakers struggled and dragged down the Nasdaq while most other stocks were higher, some strongly so.
This highlights the divergence:
Within IT, the losers were some of the chip and memory names that rallied big earlier in the week. Western Digital was a laggard, down 6.8% to erase the pop.
High-flying Intel and Micron were also losers while Nvidia fell 2%.
The big winners were energy names as Iran protests spread and Trump talked about the US attacking if protesters were killed.
Some highlights:
- Haliburton +6.8%
- OXY +5.6%
- COP +5.4%
- XOM +4.9%
Crude prices rallied more than 4% and are finishing the day near the highs, wiping out the prior two days of selling. It's been a very volatile week in energy markets given the events in Venezuela.
A big potential event tomorrow is the Supreme Court decision on tariffs at 10 am ET. The court doesn't pre-announce what decisions are coming but it said tomorrow would be a 'decision day' and that could mean tariffs. One of the top performers today was Costco, up 3.7% and it stands to be one of the winners if tariffs are struck down.
Another winner on the day was Ford, up 4.8% and Nike up 3.0% with the later reversing after early losses. There is always the lingering feeling that decisions like this leak, especially given the stakes. I suspect Nike is one of the cleanest trades on tariffs but the details of the decision and what it means for inevitable US efforts to reconstitute them will be critical.
Other winners on the day were housing-related names, which could be a tariff trade and it's also somewhat counter-intuitive to see home builders rally (LEN up 5.3%) on a day when yields rose on better-than-expected US trade data.
Another big winner was defense after Trump said late yesterday he wanted to boost the US military budget by 50%.
Closing changes:
- S&P 500 flat
- Nasdaq Comp -0.4%
- DJIA +0.5%
- Russell 2000 +1.1%
- Toronto TSX Comp +0.6%
