Most main sectors finished in the green today despite a decisively bearish start to the session on Wall Street. Still, there were a few notable negative outliers, as communication services and consumer discretionaries lost some ground. Tech, healthcare, and utilities showed the most promise, with materials, real estate, and energy outperforming the broader market. Consumer staples trod water, while financials and industrials finished marginally lower as recession fears lingered.

Traders said that bulls fought back following yesterday's tech-led dip. As one trader explained, “Bulls quickly stepped in to buy yesterday's pullback in most ‘risk-on’ sectors, but the fact that defensive stocks also showed strength could be hinting at a possible profit-taking event in the near future.”

This morning's economic releases were in line with a sluggish second quarter in the U.S., as new jobless claims matched last week’s eight-month high, while producer prices barely budged despite the Trump administration’s tariff push. Treasury yields and the dollar took a beating as rate cut odds jumped higher, although there is still virtually no chance of an easing step from the Fed next week despite this week’s promising inflation data. That said, today's data makes the Fed's monetary statement even more important, as a shift in the Central Bank's rhetoric could definitely be in the cards.

Besides the economic surprises, Oracle’s (ORCL, +13.3%) post-earnings surge turned the most heads today, as the software giant erased this year's steep pullback, scoring a new all-time high for the first time since December. The ongoing artificial intelligence (AI) boom fueled robust growth in Oracle’s cloud sales, suggesting that the most important driver behind the past couple of years’ tech rally is alive. With a slew of leading tech stocks, including Microsoft (MSFT, -1.3%), Nvidia (NVDA, +1.5%), and Facebook parent Meta (META, -0.1%) also trading at or near their record highs, the Nasdaq looks poised to top 20K in the near future.

We are in for another busy morning of economic releases, with the consumer economy and inflation in focus ahead of the weekend break. The Michigan consumer sentiment number is forecast to edge higher for the second straight month, to 53.2, while inflation expectations are projected to come inch lower from last month’s reading of 6.6%. The Eurozone trade balance and industrial production will also be released during pre-market trading, while the Chinese new loans report could make waves overnight.

Technical Corner:
Despite the fact that the S&P 500 closed only 2% off its record high today, with the Nasdaq and the broad-based index trading well above their 50-and 200-day moving averages, the Dow still failed to join this month's rally in earnest. The Dow is stuck near its May high and long-term moving average, while more than 2,000 points below its all-time high. On another negative note, the Russell 2000 continues to lag its large-cap peers from a technical perspective, as, despite a promising start to the week, the small-cap benchmark is still stuck below its 200-day moving average.

The Volatility Index (VIX, +4.4%) has been showing a negative divergence this week, compared to the market-leading Nasdaq and S&P 500, as the “fear gauge” is on track to close the week in the green. The VIX is also within striking distance of its 200-day moving average and the key 20 level, trading well above its 2024 range. Despite this week’s worrisome trends, the VIX is still way below its year-to-date high, but, according to the VIX, stocks might need a breather before a move to new record highs.