Nasdaq to lead Wall Street higher as sector rotation fluctuates

• Only three sectors finished higher in the previous session (financials and real estate both +1%, industrials +0.5%), while eight sectors declined, indicating targeted rotation rather than panic selling
• Major tech stocks remain significantly below recent peaks: Amazon down 24%, Nvidia 14%, Meta 20%, and Palantir 40%, with a major tech index 10% off its highs
• Key US economic data due Wednesday includes durable goods, housing numbers, and Federal Reserve minutes, alongside earnings from chipmaker ADI and payments firm GPN

Market Summary: Nasdaq to Lead Wall Street Higher Amid Sector Rotation

Market Overview:

Wall Street futures pointed higher Wednesday morning, with Nasdaq 100 futures up 0.45%, S&P 500 futures up 0.3%, and Dow Jones futures indicating a 0.1% gain. The previous session saw all three major indices finish up approximately 0.1% after a rocky start.

Key Movers:

Tech stocks led premarket gains, with Nvidia, Amazon, and Palantir pointing to gains of at least 1% following Meta's multibillion-dollar "full-stack" supply contract with Nvidia. Apple, Microsoft, and Meta remained relatively flat.

Sector Rotation Dynamics:

Market analyst Kenny Polcari highlighted significant sector divergence beneath headline moves. Only three sectors finished higher: financials and real estate (both +1%) and industrials (+0.5%). Eight sectors closed lower, with consumer staples down 1.5% after a 15% eight-week rally, energy falling 1.1% after a 21% run, and basic materials dropping 1.1% following an 18% surge.

Polcari characterized this as "short-term rotation" rather than panic, with traders harvesting profits from outperforming sectors to offset broader weakness and create alpha in volatile conditions.

Tech Sector Pressure:

Major tech stocks remain significantly below recent peaks: Amazon down 24%, Nvidia 14%, Meta 20%, and Palantir 40%. A major tech index is 10% off its highs.

Other Markets:

The dollar trimmed earlier gains, the 10-year Treasury yield reached 4.06%, oil rebounded to $63 amid Middle East tensions, and gold held near $4,913.

Upcoming Catalysts:

Today's releases include durable goods, housing data, Federal Reserve minutes, and earnings from chipmaker ADI and payments group GPN.