Tech Sell-Off Adds Pressure to MU Earnings, Jobs Show Case for Two 2026 Rate Cuts

Market Overview - The market is experiencing a rotation away from high-flying technology stocks, with cyclical sectors such as financials, industrials, and discretionary goods benefiting from this shift [2][4][5] - The S&P 500 is down slightly over 1% month-to-date, while equal-weighted indices show positive performance, indicating a divergence in market dynamics [11] Bond Market Insights - The bond market is relatively quiet, but the steepening yield curve is a dominant trend, with expectations of potential Fed rate cuts continuing into 2026 [7][8] - Rising global yields and increasing supply due to deficits are contributing to the steepening yield curve, particularly as Japan approaches a 2% yield for the first time in decades [8] Economic Indicators - Recent labor market data indicates a softening trend, with wage growth easing, which may influence the Fed's decision on rate cuts [15][16] - Inflation remains sticky near the 3% mark, complicating the outlook for long-term yields and the potential for rapid Fed rate cuts [17][18] Technical Analysis - Current market technicals show a lack of strong trend strength, with the market consolidating around the 50-day moving average [13][14] - The volatility of bond yields is seen as a key factor that could provide a favorable backdrop for equities, potentially allowing for a rotation back into technology stocks if conditions stabilize [14]