Daily PA Wrap

Utilities topped every sector Tuesday, and not on a safety bid: Constellation Energy jumped 12.25% and Vistra 10.77%, the same AI-power-demand trade Barchart and Nasdaq have both flagged as this year's driver behind nuclear-heavy utilities, while the uranium proxy rose 3.58% alongside them. The broader tape was healthier than that headline alone suggests: the S&P 500 added 0.58% to 7,818.93 and the Nasdaq 100 rose 0.48% to 31,224.69 on breadth of 338 advancers against 159 decliners, with equal-weight RSP's 0.57% gain essentially matching cap-weighted SPY's 0.55% — even as the Russell 2000 fell 0.59% and the VIX dropped 3.29% to 15.01. The same power-and-infrastructure split ran through tech itself: Ciena, the index's best performer at +13.85%, and Corning (+6.02%) rallied on AI-buildout exposure while chip-equipment names KLA (-4.54%) and Lam Research (-3.44%) fell, leaving Information Technology up just 0.60% net. Health Care was the only sector lower, down 0.15% as Moderna dropped 7.75%.

Larry Summers has argued the Fed should move in one 100bp hike rather than smaller steps to rebuild credibility, per Bloomberg; the market's own priced path leans the same hawkish way, climbing from 3.88% this month to 4.32% by next March. Credit isn't flinching at it — HY OAS widened just 2bp to 3.12% and the 2s10s spread only 1bp to 0.48 — tightening that's priced without stress.

Our take: A supposedly defensive sector leading the board the same day the Fed's priced path turns more hawkish isn't a flight to safety — it's AI power demand re-rating utilities into a growth trade, with uranium's rally confirming the read. Credit's calm says the buildout's financing cost isn't the worry; the chip-equipment selloff inside the same tape says investors are getting picky about whose capex they trust.

The Fear & Greed gauge rose to 47.4 ('neutral') from 43.03 the session before, while the 10-year breakeven held flat at 2.36% — the market pricing higher real rates into that climbing Fed path, not higher inflation expectations.

New highs (18) comfortably outran new lows (5), but only 29.9% of the index sits above its 50-day average against 49.8% above its 200-day — the rally still hasn't repaired the trend damage underneath it.