PM Session Wrap — Fed, PCE, and Rotation into Chips & Autos (2025-10-31)
TL;DR: Powell’s dovish undertone and the latest PCE print kept rates rangebound; traders rotated into semiconductors and autos while energy lagged. Big movers: NVDA and AMD outperformed, SMH led sector strength, GM jumped on delivery/EV chatter, UPS and GE mixed. Held selective semiconductor exposure into the close; stops were tight. Plan: look for continuation in chips, monitor rate-sensitive names, and fade energy weakness if macro deteriorates.
Market context: The morning’s PCE data showed inflation still cooling in core measures, and Powell’s PM remarks leaned slightly dovish — enough to keep long-duration assets from selling off. That backdrop encouraged risk-on positioning late in the session.
Rotation & Sectors: Semiconductors and autos saw clear rotation. The SOX/SMH complex rallied on renewed demand narratives and AI positioning; large-cap chip names (notably NVDA and AMD) outperformed on heavy flows. Autos (GM in particular) caught buyers on delivery/EV-related headlines and supply-chain optimism. Energy underperformed — crude softness and weaker refiners’ cues weighed on the group.
Key stock moves: NVDA & AMD led upside within chips; SMH outpaced the broader market. GM showed a notable gap/higher momentum into the close. UPS and GE were mixed — IDPs and service headlines caused choppy intra-session action.
What we held & why: We kept a selective, size-controlled semiconductor leg (including a large-cap AI-exposed chip) and a swing-sized auto name for momentum — both fit the post-PCE risk-on thesis and had clean technicals. Stops: disciplined, tight intraday-to-swing stops keyed to recent structure (not account-level specifics).
Plan for next session: Watch SMH and NVDA leadership for continuation; use any morning weakness to add small, staggered entries into pro-chip setups. If energy broadens its weakness, consider fading the move with small mean-reversion trades. Keep position sizes limited and stops strict — macro prints or a hawkish pivot could flip sector leadership quickly.
Sources: PCE release and Fed remarks — Bureau of Economic Analysis (https://www.bea.gov) and Federal Reserve statements (https://www.federalreserve.gov).