Why software stocks are outperforming chip stocks

Yahoo Finance markets and data editor Jared Blikre takes a look at broader market trends as stocks continue their rally. This ongoing rally was sparked by the Federal Reserve's interest rate cut last week. He also breaks down what has been happening in the tech space, where software stocks have started to diverge from chip stocks.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

Video Transcript

This is what happened Friday and this is in semiconductors.

Let me just show you the five day look.

So we see what happened last week because it was more bullish than Bearish Mobile.

I recently talked about here and Intel are the leaders in that, and we see arm here down about 6% now in software, let's take a look.

We had a lot of green last week as well.

Crowd strike crowd strike was up 15%.

E a down 4%.

But let's take a look at what's on this year, and I'm going to compare software to semiconductors.

This is year to date, and you can see in Cyan.

Here we have software just slightly outperforming.

But over the last month it's clear that software is the leader here.

It's positive, and the negative goes to the chip stocks here, So I also want to compare large cap tech to unprofitable tech.

I think this is an interesting comparison, because with all the rotation that we've seen into small caps and a lot of those you're going to see in those Arc Innovation Fund tickers that is the leader over the last month, slightly outperforming Tech, which is negative over that time frame.

Now.

Before we go, I got to hit crude oil crude oil looking a little bit bearish.

Now this is overnight, so it's still positive.

But the bearishness comes from traders bets.

Every week, the CFTC Commodity Futures Trading Commission polls traders and see what their bets are.

And, uh, it's very negative right now.

In fact, the most bearish since 2011.

Now the story is OPEC plus is going to be adding 100 80,000 barrels per day.

They were going to do that in October, but now they're kicking that can down to 2025.

But I've got a choice.

Quote here from, uh, Javier Blas over at Bloomberg, saying O opec plus is like a tea bag.

It only works in hot water.

Uh, so to judge by its latest actions, OPEC plus has yet to realise it's inside a warming kettle.

So I take a look at this year to date chart in crude oil, which I'm gonna pull up here.

It looks like we're down by the lows.

We went a little bit negative, but you take over a look over the last three years.

We just bounced off support.

So I think the danger is an upsized squeeze, and you can consider that a contrarian opinion.

All right, Jared, you win the award for quote of the morning so far.

Jared, Thanks so much for breaking that down for us.