The rotation of stock sectors in the U.S. market is accelerating, with semiconductors firmly holding the C-position. Capital inflow into this sector is quite noticeable!
Last night, the entire market's funds flowed into the semiconductor sector, causing some previously rising popular tech stocks to plummet, with nuclear power and quantum computing being the hardest hit.
The biggest shock factor for U.S. stocks this week is Trump's tariff policy, which has caused many companies to fluctuate wildly. Therefore, patience is key when considering entering positions.
Otherwise, entering at the open and immediately facing a drop can be very disheartening. Currently, large funds are engaged in a tug-of-war around Nvidia, especially at the 160 level. If it holds above 160 without dropping, short sellers will quickly become fuel for a short squeeze.
Correspondingly, the semiconductor sector will also be lifted by Nvidia, leading to capital rotation in other sectors. For example, the healthcare sector plummeted on Monday but surged on Tuesday, which is a sign of capital rotation.
Since there are unlikely to be major macroeconomic shocks this month, there is no immediate need for a market correction. The market may remain in a high-range oscillation for a while, with capital rotating continuously. The broader direction will be determined after the CPI data is released on July 15.
Current data suggests that U.S. inflation is declining. Last night's one-year inflation expectation for June was lower than expected, which is a relatively clear positive signal.
Another reason for the strong performance of A-shares is the warming of Sino-U.S. relations, with Trump leading a delegation for a visit. This is also good news for U.S. stocks.
However, those who chase highs can easily get burned, as Trump is known for his tough talk on tariffs. While the market may quickly adjust, it can be frustrating for those who didn't time their entry well.
From a broader market perspective, the "Magnificent Seven" are rotating to maintain the index at high levels, while semiconductors are in a core uptrend. Many semiconductor companies have already rebounded after pulling back to their 10-day moving averages, approaching the 20-day moving average. Those looking to enter the semiconductor sector should keep an eye out.
Other popular companies like PLTR, HOOD, OKLO, and IONQ still present opportunities.
Recently, there has been significant capital inflow into AI software, with many AI software companies rising. For stability, consider ORCL and CRM; for more aggressive plays, look at SOUN, U, and ZETA.
Overall, capital is rotating, but it's important to hold onto key positions and remain patient.
2025 is destined to be a volatile year, requiring full digestion of the gains from the past two years. This demands higher discipline from individual investors, so everyone should plan their portfolio management carefully. Those who prioritize strict discipline may consider joining our community.
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