Semi-Conductor Squeeze Neutralizes FOMC Jitters

The morning session belonged to the bears as sticky CPI data from earlier in the week continued to weigh on the tape. The SPY dipped below the key 5,450 pivot, triggering a cascade of stop-orders that briefly threatened the 50-day moving average. However, the bid returned aggressively at the European close, led by a massive buy-program in NVDA that squeezed late-day shorts and returned the Nasdaq-100 to the flat line by the 3:00 PM lull.

Technically, the price action was a masterclass in liquidity grabs. We saw a classic 'stop-run' below the weekly low before the VIX collapsed from 18.50 back to the 16 handle. AMD and the broader SOXL ETF tracked the NVDA move, showing that the appetite for high-beta momentum remains the primary driver despite the macro uncertainty. Most of the volume was concentrated in the 0-DTE options space, which amplified the afternoon gamma squeeze as market makers were forced to hedge.

Heading into tomorrow, the focus remains on whether this rally can find follow-through or if it was simply a vacuum fill. Keep an eye on the 10-year yield; any move back above 4.30% will likely cap the upside for tech. For now, the trend remains 'buy the dip' until the 20-day EMA is lost on a closing basis. The tape is fast, favoring those who can execute at the turn rather than chasing the extended move.

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