The market responded to this morning’s largely in-line CPI with a sell-off.

It seems the market is unhappy with the reduced likelihood of a 50 bps cut, which dropped to 17% after starting the month as a slight 51% favorite. Personally, I find the 25 vs. 50 debate myopic. Focus on the idea the Fed is acting to find neutral, not save the economy. This is positive for the economy and stocks.

Let’s end on a positive note. Despite the heavy tape, semiconductor leadership is outperforming, with support at the 200-day SMA on the SMH holding firm. A recovery in this leadership group can mask a lot of underlying weakness at the index level and have a disproportionately positive impact on sentiment.