A second straight soft inflation print sent the S&P 500 to a fresh record, but under the hood the semis split in two.
June PPI slowed more than expected, echoing Tuesday's cool CPI — the biggest single-month drop in inflation since April 2020 — and that pulled forward easing bets across duration-sensitive megacap tech. The S&P closed up 0.39% at a record, the Nasdaq added 0.67%, the Dow 0.17%, and the Russell 2000 0.39% for broad green. Apple notched a record high on approval to launch its generative-AI features in China, while a bullish outlook from ASML bid up the chip-equipment complex.
The tape was not clean underneath. Memory makers Micron and SK Hynix cratered more than 7%, dragging the SOX even as equipment names ripped — a textbook intra-semis rotation. Breadth stayed middling, with six of eleven sectors green: tech, communication services and energy led, healthcare lagged. Soft data plus positive dealer gamma keeps the path of least resistance higher, but leadership is narrowing to megacap and AI-capex winners.
The risk: bank earnings and any hawkish Fedspeak that fades the disinflation trade. If tomorrow's financials disappoint or the memory-chip crack spreads to the broader SOX, the record tape loses its cover and this rotation flips into broad de-risking.