Yield Curve Steepening Shreds Tech Premium; Financials Find Floor

The morning tape was dominated by a violent de-grossing event in the Mag7. After the 8:30 AM CPI beat, NVDA saw immediate distribution at the open, failing to hold its 20-day moving average and triggering a wave of stop-hunts that washed out the $125 support level. Growth-sensitive desks were forced sellers as the QQQ fell 1.8% in the first hour, creating a liquidity vacuum that wasn't filled until the mid-day European close.

While tech bled, the intraday rotation into the 'old economy' was palpable. JPM and the broader KBE basket saw aggressive dip-buying as traders bet on a wider net interest margin environment. This wasn't just a flight to safety; it was a tactical repositioning. Small caps via the IWM initially cratered on the rate scare but managed a late-session recovery, printing a hammer candle on the daily chart that suggests the 'higher for longer' narrative is already priced into the laggards.

Volatility remains the primary play for the overnight session. The VIX spiked toward 18 before settling, but the real story was in the options flow where we saw massive put-buying in semi-conductors countered by outlier calls in energy. Expect a choppy open tomorrow as institutional rebalancing continues; the key remains the 4,450 level on the S&P—closing below that would signal a shift from a pullback to a correction.

Today's edge: Today’s edge: Spotting the rotation into financials required tracking the institutional block trades that hit the tape via StocksLeak before the volume bars even registered.