U.S. headline PPI rose 1.4% month-over-month to reach 6.0% annually, marking the highest print since late 2022bls.gov. The 10-year Treasury yield rose to a ten-month high of 4.49%. The Treasury factor fell -0.63% on a residualized basis (z=-3.10), an extreme move across our proprietary suite. Selling pressure concentrated in yield-proxy sectors, with Real Estate, Utilities, and Financials underperforming.
The Size factor notably gained +0.87% (z=2.62), while the Momentum factor trended higher (z=1.27). The Semis factor (+0.70%, z=1.39) anchored the advance, driven by structural AI demand and diplomatic developments. Micron (MU) and Marvell (MRVL) led the group, with MRVL advancing +10.0% and MU rising +4.5% on a raw basis amid sold-out high-bandwidth memory supply through 2026. Semiconductor sentiment found support from news that Nvidia CEO Jensen Huang joined the U.S. diplomatic delegation to Beijing to negotiate market access for H200 AI chipsstraitstimes.com.
| Factor | Return | Z-Score | Category | Direction |
|---|---|---|---|---|
| Treasury | -0.63% | -3.10 | Theme | treasury exposure underperforms |
| Size | +0.87% | 2.62 | Style | large names outperform |
| China | +0.49% | 1.91 | Theme | china exposure outperforms |
| Semis | +0.70% | 1.39 | Theme | semiconductors exposure outperforms |
| Momentum | +0.95% | 1.27 | Style | 1-year moves trend |
| Liquidity | -0.25% | -0.59 | Style | low liquidity outperforms |
The China factor advanced (z=1.91) as investors priced in the prospect of a formal "Board of Trade" mechanism between the U.S. and China. Concurrently, a pending order of 500 Boeing 737 Max jets lifted aerospace equities.
Alibaba (BABA) rose +9.0% after reporting 38% year-over-year revenue growth in its Cloud Intelligence Group. KWEB traded at 3.7x its average 30-day volume, while FXI traded at 3.37x.
| ETF | Theme | Today | 1d Ago | 5d Ago | 20d Ago |
|---|---|---|---|---|---|
| KWEB | china | +5.32% | -1.49% | +2.17% | -0.75% |
| FXI | china | +2.69% | -0.37% | +2.30% | +1.19% |
| SMH | semiconductors | +1.94% | -2.61% | +7.38% | +24.17% |
| XLV | healthcare | +0.71% | +1.96% | +0.38% | -2.00% |
| TLT | long-term bonds | -0.18% | -0.67% | -0.52% | -2.55% |
| KRE | banking | -1.55% | -0.47% | -2.42% | -1.53% |
The Health Care Select Sector SPDR (XLV) traded at 2.0x its average volume. Activity increased following the administration's announcement of a $1.3 billion Medicaid deferral to California and a six-month moratorium on new Medicare provider enrollments, prompting institutional repositioning within managed care providers and pharmaceutical constituentsrobinhood.com.
Cisco (CSCO) advanced +19.9% on a raw basis, capturing 18% of its total move in the final hour. AppLovin (APP) fell -7.0% despite an earnings beat, pressured by multiple compression affecting long-duration software assets amid the 10-year Treasury yield increasebusinesswire.com.
This document is generated by an AI assistant for informational purposes only. It does not constitute financial advice, an investment recommendation, or an offer to buy or sell any securities. Data is based on proprietary models and recent market information, which may be incomplete or subject to change. Always consult a qualified financial professional before making investment decisions.
For more on factor construction methodology, see www.factorpulse.com/glossary.