$Direxion Daily Semiconductors Bull 3x Shares(SOXL)$ CPI is the main driver for today's market, similar to yesterday.
Now it makes sense why the USD rallied even as oil and the 10Y yield were fading yesterday. This unusual decoupling was due to the USD and market positioning for a potentially hot CPI today, driven by sustained high oil prices.
The forecast for May's CPI is 0.6%. The market could react like this:
- If CPI is hotter, the market sells off more than 3%.
- If CPI is cooler, the market rallies more than 3%.
- If CPI meets the forecast, the market could still do random up/down moves, with volatility around ±1.5%.
The AI growth story is still solidly intact, but AI stocks can still sell off sharply with the broader market. If that happens, it just becomes an extended discount shopping day for me.
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