Dear Trader,
If Thursday had been a Sesame Street segment, that's the song they'd have played.
The S&P 500 closed up 0.72 percent and the Invesco QQQ Trust (QQQ) gained 1.43 percent. Look at the sector map and you'll see what those two numbers are hiding:
Every sector in the S&P 500 finished red except Technology Select Sector SPDR Fund (XLK). Salesforce ran more than 21 percent and NVIDIA (NVDA) more than eight after its report. Tech carries enough weight in the index to drag the whole thing green by itself, and Thursday it did.
This is why I keep the Invesco S&P 500 Equal Weight ETF (RSP) on my screen. It gives all 500 names the same say, so you find out whether 500 stocks went up or whether one sector did.
Here's the part that matters for what comes next. RSP has beaten SPY by about four points this year. Breadth has been fine in 2026, and Thursday was the exception rather than the pattern.
Fed Chair Kevin Warsh spoke Friday morning at Jackson Hole and said inflation hasn't improved enough, leaving the door open to a hike. Scott Bessent has been running the more consequential policy out of Treasury all summer with the buyback program. I'm still watching oil and bonds first.
Look at Thursday afternoon. You can pick out the exact minute the crude headline hit by watching the SPX:
Oil and bonds are still a BIG BIG story right now.
The One Mega Cap They Sold
Amazon (AMZN) has been getting pummeled. It closed Thursday at $256.26 on a day the index rallied, with traders dumping it like a retail stock. Some of that is mechanical, since Amazon sits in consumer discretionary and spent the whole session in a red sector.
The stock closed at a record $284.02 on August 3, the day its market cap crossed three trillion dollars for the first time. It's down roughly 10 percent from there.
The quarter behind it doesn't support a 10 percent haircut. Revenue hit $200.6 billion, up 20 percent, and AWS grew 37 percent to $42.2 billion, its fastest in 18 quarters. Operating income jumped 43 percent to $27.5 billion, with margin going from 11.4 percent to 13.7 percent.
Andy Jassy raised capital spending guidance to $220 billion, and that number is what scared people off in August. It also means customers have already reserved 2027 and part of 2028 capacity, with $496 billion of work booked and waiting.
It's getting close to my buy-this-with-both-hands price.
Amazon is a buy here. If the rally broadens the way I expect, this is the mega cap with the most ground to make up.
Where the War Premium Went
Energy has had a monster 2026, and the fuel for it was the Strait of Hormuz. Brent traded near $100 a barrel earlier this month with tanker traffic at a standstill.
That's unwinding. Brent closed Thursday around $87.65 and WTI around $82.90, after crude gave back more than seven percent in two sessions. The Brent to WTI spread is back to $4.75, roughly where it sits when nobody's panicking about supply.
The Energy Select Sector SPDR Fund (XLE) hasn't caught up to that. It's trading near $62.50, about three percent under its 52-week high of $64.70. ExxonMobil (XOM) and Chevron (CVX) make up 35 percent of the fund between them, and XOM has already started leaking, from $164.05 on August 24 to $157.52 Thursday.
I want to short XLE here. If XOM works its way back into the 130s, that's where I'd want to own the best operator in the group.
So which one will the crew pick for Monday's Ticker Highlight Show? Tap this link, pick your subscription rate, and get Monday's pick as soon as it hits.
Your only option,
