Stock Rotation Hits Megacaps As Apple Sinks 3%: Markets Wrap

Stock rotation hits Megacaps as Apple sinks 3%. Wall Street traders gearing up for this week’s Federal Reserve decision kept driving a rotation out of the tech megacaps that have powered the bull market in stocks.

As bets on a half-point Fed cut on Wednesday kept growing, money continued to flow into economically sensitive corners of the market and out the perceived safety of big tech. Apple Inc. sank after a closely followed analyst warned that demand for the iPhone 16 Pro has been lower than expected. While the S&P 500 didn’t do much on Monday, its equal-weighted version — one that gives Target Corp. as much clout as Microsoft Corp. — hit an all-time high amid hopes the advance will broaden out.

“We remain positive on equities,” said John Stoltzfus at Oppenheimer Asset Management. “The broad rotation which began in the rally from last year’s S&P 500 low has deflected volatility repeatedly evidenced on a day-to-day basis since the lows in early August. Pullbacks experienced thus far this year have mostly looked like “trims” and “haircuts” for the S&P 500.”

The S&P 500 was little changed. The Nasdaq 100 fell 0.6%. The Dow Jones Industrial Average rose 0.5% The Bloomberg Magnificent 7 Total Return Index fell 0.9%. The Russell 2000 Index rose 0.3%.

The yield on 10-year Treasuries was little changed at 3.65%. The dollar fell.

• Intel Corp. has officially qualified for as much as $3.5 billion in federal grants to make semiconductors for the Pentagon, according to people familiar with the matter, after the chipmaker reached a binding agreement with US officials.
• Colgate-Palmolive Co. was downgraded at Wells Fargo to underweight from equal-weight.
• Bausch + Lomb Corp. climbed after a report that the eye-care company is considering selling itself to disentangle from its debt-laden parent company.
• Deutsche Bank AG is exploring options to make it harder for UniCredit SpA to buy Commerzbank AG as it considers how — or whether — to react to a potential deal that would create a huge competitor in its home market, people with knowledge of the matter said.

Key events this week:

• Germany ZEW, Tuesday
• US business inventories, industrial production, retail sales, Tuesday
• Eurozone CPI, Wednesday
• Fed rate decision, Wednesday
• UK rate decision, Thursday
• US US Conf. Board leading index, initial jobless claims, US existing home sales, Thursday
• FedEx earnings, Thursday
• Japan rate decision, Friday
• Eurozone consumer confidence, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 10:25 a.m. New York time
• The Nasdaq 100 fell 0.6%
• The Dow Jones Industrial Average rose 0.5%
• The Stoxx Europe 600 was little changed
• The MSCI World Index was little changed
• Bloomberg Magnificent 7 Total Return Index fell 0.9%
• The Russell 2000 Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%
• The euro rose 0.5% to $1.1127
• The British pound rose 0.6% to $1.3202
• The Japanese yen rose 0.2% to 140.54 per dollar

Cryptocurrencies

• Bitcoin fell 2.7% to $58,165.07
• Ether fell 3.4% to $2,284.62

Bonds

• The yield on 10-year Treasuries was little changed at 3.65%
• Germany’s 10-year yield declined one basis point to 2.14%
• Britain’s 10-year yield was little changed at 3.77%

Commodities

• West Texas Intermediate crude rose 2.5% to $70.38 a barrel
• Spot gold rose 0.1% to $2,580.61 an ounce

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