Yesterday’s market action was characterized by broad-based strength, with the S&P 500 (+80bps), Russell 2000 (+160bps), and Nasdaq Composite (+136bps) all posting gains. Healthy market breadth was on display, with 320 names in the S&P 500 currently trading up on the day. The technology sector continued to outperform, led by semiconductors and memory stocks. Apple’s reported consideration of using Intel and Samsung to build device processors was a tailwind for the sector, with Intel (+13.85%), Micron Technology (+10.75%), and SanDisk Corporation (+9%) among the top performers.

The “risk on” mentality continued to drive market action, with momentum stocks breaking out once again. The long leg of momentum (skewed towards semis/AI) saw 12-month winners gain +285bps, while the short leg of momentum also worked with high beta 12M losers down -115bps. Our HF pair (GSPRHVMS +175bps) and software vs semis pair (-277bps) were among the top performers in the thematic space.

In terms of flows, GS PB observed net selling in both single names and macro products, with a gross leverage ratio of -5.1 pts to 307.8% (80th percentile 1-year, 96th percentile 5-year). Overall book net leverage was down -0.8 pts to 76.0% (23rd percentile 1-year, 55th percentile 5-year).

Looking ahead, investors will be eyeing today’s economic data releases, including the Consumer Price Index (CPI) and Retail Sales reports. With inflation concerns on the rise, any signs of a pickup in price growth could provide tailwinds for the broader market. However, given the recent surge in tech stocks, it’s possible that some profit-taking may occur in the near term.