Utilities are finally starting to get some action again as the rotation out of tech mega-caps continues. Small-caps are the group getting a lot of attention as the big rotation beneficiary, but this sector, Treasuries and cyclicals are also getting picked up. The dollar has remained in a relatively tight trading range ahead of this week’s FOMC decision.

The tech trade finally takes a bit of a breather, but is this a peak or a pause? The TIPS market is still indicating that investors are pretty neutral when it comes to inflation expectations. Relatively healthy economic data and an end to the debt ceiling drama is starting to build up some momentum for the dollar again.

Even though the tech sector as a whole has performed well this year, make no mistake about it - this is all about a handful of mega-cap names and the sudden mania around AI. This sector is drowning out the rest of the market, which isn’t nearly as healthy as the averages might make it seem. The dollar could be one of those asset classes that easily reverses course because two catalysts might quickly evaporate.