Some rotational action and late strength in the Nasdaq and S&P 500 covered up some mixed action under the surface.
The S&P 500 exchange-traded fund (SPY) saw its lightest volume of the year, and breadth was two-to-three negative, but the S&P 500 hit a new high, and Nasdaq hit a new all-time closing high. Small caps were weak, with the Russell 2000 losing ground, as did the Dow.
Strength was seen in a number of big-cap names such as Adobe (ADBE) , Salesforce.com (CRM) , Biogen (BIIB) , Apple (AAPL) , Chipotle Mexican Grill (CMG) . The cyclical names that pushed the Dow higher recently did not participate. Financials were weak, which pressured the Dow and small caps.
It was an odd mix of action and illustrated some uncertainty as we head into what some are calling the most important Fed meeting in quite a while. Inflation fears pressured bonds, but the rotation in equities didn't make much sense. If this is the "inflation playbook," then it isn't very logical.
While there were quite a few strong stocks, traders struggle as they had to try to shift into some new names. The things that were strong last week did not see a lot of follow-through, so some quick repositioning was needed in order to keep pace.
It was an odd brew of action that frustrated some trades, but made the Nasdaq and S&P 500 look pretty good.
Have a good evening. I'll see you tomorrow.