Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

STIFEL SAYS RECORD DISPERSION SIGNALS FRESH MARKET ROTATION

A surge in market dispersion is signaling another shift in leadership within U.S. equities and could pave the way for a broader market rally beyond mega-cap technology stocks, according to a Stifel note.

Dispersion, which measures the volatility of individual stocks relative to overall index volatility, recently climbed to record highs even as broader market volatility remained subdued — a situation that is unlikely to persist.

Since the end of May, the equal-weight S&P 500 .SPXEW has outperformed the market-capitalization-weighted benchmark .SPX, helped by gains in previously lagging sectors such as healthcare and banks. Semiconductor stocks and the so-called Magnificent Seven technology companies lagged during that period.

In recent weeks, however, Mag-7 stocks have resumed leadership at the expense of other momentum trades, while stock-specific volatility has continued to rise, according to Stifel. That suggests another leg of market rotation may be approaching.

Several potential catalysts remain that could lead to increased volatility in July, including the upcoming Federal Reserve policy meeting, earnings reports from high-spending Mag-7 companies, employment data and geopolitical tensions in the Middle East.

Stifel sees the S&P 500 rallying to 7,800 by year-end 2026 despite expecting continued market volatility.

(Chibuike Oguh)

*****

EARLIER ON LIVE MARKETS:

BREAKOUT OR A FAKEOUT? TRADERS WATCH THE 10-YEAR YIELD CLICK HERE

WAR & PEACE & INFLATION: CPI, SMALL BUSINESS SENTIMENT CLICK HERE

MAIN US INDEXES RISE AS COOLING INFLATION OFFSETS SOFTWARE-SECTOR WEAKNESS CLICK HERE

S&P 500 FUTURES SLIGHTLY GREEN AFTER COOL CPI CLICK HERE

HALF-TIME IN EUROPE: LOOKING TOUGH CLICK HERE

NOT JUST ABOUT OIL, REMEMBER GAS CLICK HERE

GOLDILOCKS RETURNS TO EUROPE, BUT OIL'S THE SPOILER CLICK HERE

BROAD-BASED LOSSES DRAG STOXX 600 LOWER CLICK HERE

BEFORE THE BELL: EUROPE SOFT AS US KICKS OFF EARNINGS SEASON CLICK HERE

FED IN THE SPOTLIGHT AS WARSH FACES CONGRESS CLICK HERE