The major indices are lower by roughly 1% at midday as they absorb fresh inflation news. The headline number looks good, but the core number, which takes out volatile food and energy prices came in a bit higher than estimates. On the detail, CPI rose 0.2% in August, matching the consensus and in line with the prior month's increase. Core CPI rose 0.3%, above the 0.2% consensus. The year over year increase was 2.5% (below the 2.6% consensus) for the headline figure and 3.2% (in line) for the core.

The major indices are all lower more than 1%. Historically, September is a difficult month for stocks and it appears the prophecy could come true, at least with this morning's start on the first trading day of the month. Wall Street will be hyper-focused on the key Jobs data coming on Friday. Last month, we got a surprise that the labor market might be in worse shape than expected.

The minor change in character in the stock market lasted three to five days, depending on how it is measured. After three down days, that was enough for the 'king of the hill' and investors swooped in and catapulted Nvidia (NVDA) to a 6.7% pop on June 25. The stock is now just 7% from its recent all-time closing high. While other semiconductor stocks rose as well, their gains were muted -- with most of the heavyweights gaining 2%-3%. ARM Holdings Plc (ARM) was the exception, reclaiming 6.4%. So was that it for the great semiconductor decline in 2024? Bullishly, most of the big stocks held initial support from their 21-day exponential averages. In addition, the semis quickly worked off extreme momentum divergences on a daily basis. But many remain overbought on a weekly basis and have traced out weekly bearish divergences, with some quite glaring. From a technical basis, we would prefer (and lean toward) more sideways-to-down price action in the coming weeks before the next leg higher. Seasonally, the summer-to-fall period has been the worst for semiconductors and technology in general. As for the areas of the market that benefited recently, June 25 was not a pretty day. The S&P MidCap 400 declined 1% while the S&P SmallCap 600 fell 0.9%. Looking at sectors, Real Estate (XLRE), Materials (XLB), and Utilities (XLU) all dropped at least 1%, with Financials (XLF) and Industrials (XLI) giving back 0.8%. NYSE breadth was -1,000 while advancing issues/total issues and up volume/total volume was fairly weak at only 33%.