The CPI inflation report Thursday morning was a nail in the coffin for the Mega cap only rally. This lower than expected inflation reading increases the odds of a Fed rate cut in September...and some thinking it may start as soon as end of July.
This flipped the switch on the S&P 500 (SPY) leading to losses on the session while the rest of the market exploded higher. This Risk On rotations is most evident in the +3.7% gain for the small caps in the Russell 2000 on Thursday.
