Yield Curve Steepening Rattles Tech; Semiconductors Test Q3 Lows

The morning session saw a systematic rejection of the $130 level in NVDA, setting a bearish tone for the broader MAG7 complex. As the 10-year yield reclaimed the 4.25% handle following a weak auction, the bid-side liquidity in high-beta names evaporated. Momentum shifted abruptly at the European close, triggering a cascade of stop-orders in the semiconductor space that saw AMD and MU undercut their 50-day moving averages on heavy volume.

Energy was the lone bright spot, with XLE decoupling from the broader indices as crude futures tested the top of their recent range. Traders who played the rotation saw relative strength in names like OXY and XOM, which provided a necessary hedge against the carnage in the Nasdaq. The intraday correlation between the USD/JPY and the NQ futures remains tight, suggesting that the carry-trade unwind continues to dictate the pace of these afternoon flushes.

Heading into the overnight session, all eyes are on the $18,200 level in the NQ. A failure to reclaim this zone during the Tokyo open could signal a deeper retracement toward the September lows. The tape remained heavy into the closing bell, with MOC sell imbalances totaling over $2.4B, indicating that institutional de-risking is likely to persist into tomorrow's PCE data release.

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