Tech Stocks Ease As Treasury Yields Rise, Commodity Rally Fuels Sector Rotation: What's Driving Markets Wednesday?
Portfolio Pulse from Piero Cingari
Tech stocks declined as treasury yields rose and a commodity rally fueled sector rotation, with energy and materials sectors advancing. The S&P 500 remained flat, while the Nasdaq 100 fell by 0.5%. The iShares 20+ Year Treasury Bond ETF (TLT) declined for the fifth session. Commodities like copper and silver surged, with copper reaching highs last seen in April 2023. Gold and oil prices also increased. The SPDR S&P 500 ETF Trust (SPY) was flat, while the Invesco QQQ Trust (QQQ) fell. Sector-wise, the Energy Select Sector SPDR Fund (XLE) and the Materials Select Sector SPDR Fund (XLB) were top performers, whereas the Technology Select Sector SPDR Fund (XLK) trailed. Dollar Tree (DLTR) tumbled after missing earnings, while Southern Copper (SCCO) and other miners rallied. Williams-Sonoma (WSM) soared on strong results, PayPal (PYPL) rose after announcing a new executive, Carnival Corp (CCL) gained on a bullish note, and Tesla (TSLA) fell after a downgrade.
March 13, 2024 | 5:55 pm
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POSITIVE IMPACT
Materials Select Sector SPDR Fund rose by 1.5%, driven by gains in commodities like copper.
The rally in commodities, especially copper, has a direct positive impact on materials sector stocks, benefiting XLB.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Energy Select Sector SPDR Fund was the top performer, up by 1.7%, benefiting from the commodity rally.
The surge in oil prices and overall commodity rally positively impacted energy stocks, driving gains for XLE.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 80
NEUTRAL IMPACT
SPDR S&P 500 ETF Trust remained flat amid a mixed market with sector rotation.
The flat performance of SPY reflects the overall unchanged position of the S&P 500, indicating a neutral impact.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Invesco QQQ Trust fell by 0.6% as tech stocks declined amid rising treasury yields.
The decline in QQQ is directly related to the underperformance of tech stocks, which are heavily represented in its portfolio.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
iShares 20+ Year Treasury Bond ETF declined for the fifth consecutive session amid rising treasury yields.
Rising treasury yields typically lead to declining prices for existing bonds, impacting bond ETFs like TLT.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Technology Select Sector SPDR Fund trailed, down by 1%, as tech stocks declined.
The decline in tech stocks directly impacts XLK, which is focused on the technology sector.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 80