Nasdaq just refused the relief rally everyone was banking on. Even with oil getting hammered on Middle East de-escalation, the index closed at 25,678.82, down 0.97%, while the S&P 500 only managed to trim its losses to 0.26% at 7,386.65.

The street clearly expected the crude drop (WTI at 88.70, off 2.85%, Brent near 91.45) to spark broad risk-on flows. Instead, chip names kept selling into the final hour and dragged everything else down with them. Russell 2000 actually finished green by 0.41%, which tells you small-caps liked the lower energy costs but growth wasn’t buying it.

What changed

De-escalation news hit the tape and oil futures immediately priced in lower geopolitical risk. That should have been tailwind for equities. Reality was different: the bar for tech was already high after weeks of rotation chatter, and any dip in energy costs wasn’t enough to overcome persistent semiconductor weakness.

Traders who were positioned for a relief bounce in Nasdaq got squeezed the other way. The move feels like a classic “buy the rumor, sell the fact” unwind, except the fact was supposed to be positive.

What I’m watching tomorrow

• Whether the S&P can hold above 7,380 or if this was just a pause before more downside.
• How oil stabilizes—another leg lower in crude could finally give cyclicals and transports room to run.
• Any follow-through selling in semis or if today was just end-of-day positioning.

Anyone else see this as the start of a sector rotation that’s finally sticking, or just one weird session?