Sector Rotation Triggered by Inflation Numbers Release

The market initially rallied after the release of inflation numbers, followed by a subsequent dip, with the S&P down 50 points. However, the equal weight index on the S&P surged by 1%, and the Russell index by 3%, indicating a significant breakout and sector rotation. The rally was primarily driven by the Russell 2000 index, benefiting the non-profitable companies with floating rate debt. This sector rotation dynamic is exemplified when one index surges, the other may not follow suit.