
The recent S&P 500 loss was triggered by a combination of factors, including a squishy CPI report that opened a clearer line of sight to a Federal Reserve rate cut in September, and the interplay of market rhythms and macro forces that have often exceeded the bounds of historical norms over the past few years.

The Russell 2000 outperformed the Nasdaq 100, with the former jumping 5.5% while the latter fell more than 1%. This significant rotation in market leadership came as investors shifted from mega-cap tech stocks to smaller companies that could potentially benefit more from a Federal Reserve rate cut6.