Semis added another 2.1% while the rest of the S&P went nowhere. Three names did almost all of it. An index carried by three stocks is a table on one leg, fine until somebody leans on it.
The capex bill is the part worth your attention. Three hyperscalers raised data centre spending guidance inside a fortnight, and money like that comes out of margins long before it shows up anywhere else.
Then the inflation print, which was cooler than the headline suggested. Core came in soft once you strip shelter, and the market read the top line and moved on. The detail underneath is the more interesting story, and I would watch whether it holds next month.
The two lines above are the whole argument. Headline moves on petrol and food, core takes both out, and the gap between them is where every disagreement about inflation actually lives.
Elsewhere: the dollar gave back most of last week’s move, energy was the only sector red on the day, and the two-year is still saying something the equity market is not listening to.
Retail earnings are the week’s real test. Two of the three that have reported so far beat on revenue and missed on margin, which is the combination that tells you discounting did the work. Volumes held up; what they were sold for did not.
The bond desk read of it is more sober than the equity one, and when those two disagree for more than a fortnight the bond desk has usually been right. Credit spreads have not moved, which is the part that keeps me from calling it a warning rather than a wobble.
One more thing worth your time before the bell. The jobs revision nobody covered took ninety thousand off the last two months, and it went out on a Friday afternoon, which is where numbers go when somebody would rather they were not discussed.