Equities roared back to life in Tuesday’s session as the major indices regained all of Monday’s losses and then some with the S&P 500 seeing its second strongest day of the year. Breadth was pretty strong among sectors as all but one, Real Estate (XLRE), finished the day higher. The Technology Sector (XLK) rose the most, surging 3.34%. This is only one day after a rout of tech giants (like Alphabet (GOOGL) and Apple (AAPL) in response to government investigations) dragged on XLK to finish the day just below the 200-DMA. Names like Facebook (FB) similarly dragged on the Communication Services sector (XLC) for the same reasons, but these losses were mostly made up for on Tuesday. Semis were a major factor in Tuesday’s tech rally as names like Advanced Micro Devices (AMD) and Nvidia (NVDA) rose as much as 7%. Materials (XLB) were the second best performing sector of the day as breadth in the sector was very strong with DowDuPont (DD) being the only S&P 500 Materials stock to be lower at Tuesday’s close. After gapping up to just above the 200-DMA, XLB rose further taking out the 50-DMA and finishing the day 2.81% higher. In addition to taking out the moving averages, XLB also broke out of its recent short term downtrend in dramatic fashion. Industrials (XLI) similarly saw a break out of its downtrend. Other cyclicals, the Financial Sector (XLF) and Consumer Discretionary (XLY), also performed well with both rising 2.71%. XLF’s chart has a similar pattern to XLB with Tuesday’s opening price sitting at the 200-DMA and finishing above the 50-DMA while also breaking out of its downtrend.
While cyclicals were bid up, defensives underperformed. The Consumer Staples sector was the best performing of the defensives as it rose 0.91%. Utilities (XLU) also managed to finish in the green, but it only rose 8.5 bps. Granted, Utilities finished well off of the day’s lows. Intraday, the sector had briefly dipped all the way below the 50-DMA. Finally, as previously mentioned, Real Estate (XLRE) was the only sector to move lower on the day, finishing down 0.55%. Similar to XLU, Real Estate finished off of the day’s lows near the 50-DMA. Start a two-week free trial to Bespoke Institutional to access our interactive Chart Scanner tool and much more.