U.S. equities were split by midday Thursday as a hot inflation read stoked Federal Reserve rate-hike bets, hammering chip and AI-hardware stocks while the Dow Jones Industrial Average pushed above 52,000 as investors rotated into defensives and older-economy names.
Wednesday’s inflation data was a cold shower for the Fed’s dovish hopes. September producer prices rose 6.3% year over year, the biggest gain since 2022 and above the 5.5% economists expected. A Fed hike at the meeting in two weeks is now seen as roughly a coin flip.
AI spending fears weighed on the global chip complex overnight: South Korea’s Kospi fell 8%, with Samsung Electronics (OTC:SSNLF) down 9% and SK Hynix Inc. (NASDAQ:SKHY) 11% lower, while Japan’s Nikkei 225 dropped 5%.
Seoul-listed shares of SK Hynix have now lost nearly a third of their value over the past seven sessions, the worst slump since November 2008.
Oil edged lower. West Texas Intermediate crude slipped 0.5% to $94.61 a barrel, while Brent crude eased 0.6% to $105.41.
Treasuries rallied as growth fears resumed:
- The 10-year Treasury yield fell about 8 basis points to 5.10%
- The 2-year yield dipped about 3 basis points to 4.77%, and
- The 30-year yield declined about 10 basis points to 5.43%.
By midday Thursday, the divergence across U.S. equity markets was stark: defensives and value held up while technology bore the brunt of the selling.
The S&P 500 edged up 0.1% to around 7,726, while the Dow Jones Industrial Average gained 0.9%, or about 459 points, to 52,080. Walmart Inc. (NASDAQ:WMT) led the Dow strength, up 2.3%, followed by Visa Inc. (NYSE:V), up 2.0%, and McDonald’s Corp. (NYSE:MCD), up 2%.
The Nasdaq 100 fell 0.6% to about 29,783 as chipmakers sold off.
The iShares Semiconductor ETF (NYSE:SOXX) is on track for its eighth straight session of declines.
Gold rebounded as yields eased. The SPDR Gold Shares (NYSE:GLD) rose 1.1%, with spot gold near $4,141 an ounce, still down about 2.9% for the month.
Thursday’s Performance In Major US Indices
| Index | Last | % Change | MTD | YTD |
|---|---|---|---|---|
| S&P 500 | 7,726.26 | +0.09% | +0.98% | +12.87% |
| Dow Jones | 52,080.31 | +0.89% | +2.31% | +8.36% |
| Nasdaq 100 | 29,782.65 | -0.56% | -2.06% | +17.95% |
| Russell 2000 | 2,750.98 | +0.79% | -1.64% | +10.84% |
According to the Benzinga Pro platform:
- The iShares Russell 2000 ETF (NYSE:IWM) gained 0.7%.
- The Vanguard S&P 500 ETF (NYSE:VOO) edged up 0.0%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) rose 0.9%.
- The Invesco QQQ Trust (NASDAQ:QQQ) slid 0.6%.
Healthcare And Housing Rally As Chip Rout Drags Tech
- Among S&P 500 sectors:
- The Health Care Select Sector SPDR Fund (NYSE:XLV) led with a 2.6% gain
- Followed by the Materials Select Sector SPDR Fund (NYSE:XLB) (+1.4%)
- The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) (+1.4%)
- The Consumer Staples Select Sector SPDR Fund (NYSE:XLP) (+1.2%) and
- The Communication Services Select Sector SPDR Fund (NYSE:XLC) (+1.2%).
The Real Estate Select Sector SPDR Fund (NYSE:XLRE) added 0.9% and the Financial Select Sector SPDR Fund (NYSE:XLF) gained 0.8%.
On the downside, the Energy Select Sector SPDR Fund (NYSE:XLE) fell 1.3% as crude slipped, and the Technology Select Sector SPDR Fund (NYSE:XLK) lost 1.3%.
The Industrials Select Sector SPDR Fund (NYSE:XLI) declined 0.4% and the Utilities Select Sector SPDR Fund (NYSE:XLU) slipped 0.4%.
Falling Yields Lift Rate-Sensitive Industries
The iShares U.S. Home Construction ETF (BATS:ITB) jumped 3.6% and the SPDR S&P Retail ETF (NYSE:XRT) gained 3.3%.
The VanEck Gold Miners ETF (NYSE:GDX) climbed 2.9% alongside bullion, and the iShares Biotechnology ETF (NASDAQ:IBB) rose 2.7%.
Among individual movers, Penske Automotive Group, Inc. (NYSE:PAG) led the Russell 1000 gainers with a rise of about 8.5% after agreeing a deal with its two largest shareholders to go private at a $16.3 billion enterprise value.
Quantinuum Inc. (NASDAQ:QNT) jumped 10.3%, Karman Holdings Inc. (NYSE:KRMN) rose 10.0%, TransUnion (NYSE:TRU) gained 9.0% and Etsy, Inc. (NYSE:ETSY) added 7.8%.
On the losing side, Rocket Lab Corporation (NASDAQ:RKLB) sank 10.6% after delaying the debut of its medium-lift rocket.
Vicor Corporation (NASDAQ:VICR) plunged 13.8%, the biggest Russell 1000 decliner, while Sanmina Corporation (NASDAQ:SANM) fell 8.2%, Advanced Energy Industries, Inc. (NASDAQ:AEIS) dropped 7.9% and MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) lost 7.6%.
They fell with the broader AI-infrastructure and chip sell-off. Vicor is due to report third-quarter results on Oct. 20.
Elsewhere in AI hardware, Dell Technologies Inc. (NYSE:DELL) slid 7.4%.
Thursday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Quantinuum Inc. | +10.31% |
| Karman Holdings Inc. | +10.04% |
| TransUnion | +8.97% |
| Penske Automotive Group, Inc. | +8.55% |
| Etsy, Inc. | +7.84% |
Thursday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Vicor Corporation | -13.78% |
| Rocket Lab Corporation | -10.64% |
| Sanmina Corporation | -8.23% |
| Advanced Energy Industries, Inc. | -7.93% |
| MACOM Technology Solutions Holdings, Inc. | -7.60% |
Image: Shutterstock
