The S&P 500 Index SPY is down by -0.57% today, the Dow Jones Industrial Average DIA is up by +0.30%, and the Nasdaq 100 Index QQQ is down -1.71%. December E-mini S&P futures (ESZ26) are down -0.58%, and December E-mini Nasdaq futures (NQZ26) are down -1.54%.
Stock indexes are mostly lower today, with the S&P 500 falling to a 2-week low and the Nasdaq 100 dropping to a 3.5-week low. The broader market is under pressure today as the rout in chipmakers and AI-infrastructure stocks spreads globally, with South Korea’s Kospi Index sinking more than -7% and China’s Shanghai Composite falling to a 14-month low. Today’s drop in chipmakers followed Anthropic PBC's disclosure of $16.8 billion in Q3 growth to prospective investors, figures that suggest growth has slowed even as it remains robust.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.Stocks extended their losses today on rising US producer price pressures after the Sep PPI final demand rose +6.3% y/y, stronger than expectations of +5.4% y/y and the most in 3.75 years. Also, Sep PPI ex-food and energy rose +5.0% y/y, stronger than expectations of +4.4% y/y and the most in more than 3.5 years.
Other US economic news today was mixed, with Sep retail sales and the Oct Empire manufacturing survey rising more than expected and weekly jobless claims near expectations. However, the Oct Philadelphia Fed business outlook survey fell more than expected.
On the positive side, the slump in global equity markets has sparked a rally in government bond markets, knocking yields lower. The 10-year German Bund yield fell to a 5-week low today of 3.35%, and the 10-year T-note yield fell to a 3-week low of 5.04%. Also, investors rotating out of chip stocks into software companies and defensive pharmaceuticals stocks are lifting the Dow Jones Industrials.
US weekly initial unemployment claims rose by +1,000 to 199,000, close to expectations of 200,000.
US Sep retail sales rose +0.8% m/m, stronger than expectations of +0.3% m/m, and Sep retail sales ex-autos rose+0.9% m/m, stronger than expectations of +0.5% m/m.
The US Oct Philadelphia Fed business outlook survey fell by -16.9 to 20.9, weaker than expectations of 28.0.
The US Oct Empire manufacturing survey of general business conditions rose +17.9 to a 4.75-year high of 25.5, stronger than expectations of 12.0.
Stocks and bonds got some support today after San Francisco Fed President Mary Daly said she thinks rate hikes are likely needed, just not immediately, and that she would hold interest rates steady at the October 27-28 FOMC meeting.
Stocks have support from the prospect of solid quarterly earnings results starting this week. Goldman Sachs on Monday raised its three-month view on global equity markets to overweight from neutral, saying. “Earnings growth remains supportive for equities and the recent valuation de-rating has improved asymmetry into the third-quarter earnings season.” According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +25% from a year earlier, up from a July estimate of 22%. As of today, 32 of the S&P 500 companies have reported results, with 78% beating estimates.
Nov WTI crude oil prices (CLX26) are up +0.20% today. Crude prices are supported by risks to global oil supplies as Yemen's Houthi rebels continue drone and missile attacks across Saudi Arabia, including energy infrastructure. Also, Iranian attacks on shipping attempting to transit the Strait of Hormuz have increased in recent weeks, threatening a rebound in energy supplies from the Middle East. However, today’s selloff in global equity markets is curbing demand for risk assets, including crude.
Markets are discounting a 29% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets are lower today. The Euro Stoxx 50 is down -0.62%. China's Shanghai Composite fell to a 14-month low and closed down -1.59%. Japan's Nikkei-225 Stock Average dropped to a 4-week low and closed down sharply by -4.90%.
December 10-year T-notes (ZNZ6) are up by +23 ticks today. The 10-year T-note yield is down -12.5 bp to 5.060%. Dec T-notes rallied to a 3-week high today, and the 10-year T-note yield fell to a 3-week low of 5.041%. Today’s selloff in global equity markets has boosted safe-haven demand for T-notes. Also, dovish comments from San Francisco Fed President Mary Daly were bullish for T-notes when she suggested she would support holding interest rates steady at the October 27-28 FOMC meeting.
Hawkish US economic news is limiting gains in T-notes after US Sep producer prices and Sep retail sales rose more than expected, and the Oct Empire manufacturing survey's general business conditions rose to a 4.75-year high.
European government bond yields are moving lower today. The 10-year German bund yield fell to a 5-week low of 3.353% and is down -10.7 bp to 3.359%. The 10-year UK gilt yield fell to a 1.5-week low of 5.301% and is down -11.3 bp to 5.312%.
Eurozone Aug industrial production fell -0.5% m/m, weaker than expectations of no change and the biggest decline in 7 months.
ECB Governing Council member Martins Kazaks said the ECB can afford to take its time adjusting interest rates, despite persistent energy price rises that are set to keep consumer price growth elevated, as the recent surge in government bond yields may start to weigh on economic activity.
UK Aug manufacturing production rose +1.2% m/m, stronger than expectations of no change and the largest increase in 9 months.
Markets are discounting an 11% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
Chipmakers and AI-infrastructure stocks are falling today on demand concerns after Anthropic disclosed Q3 revenue growth that likely slowed from the previous quarter. The iShares Semiconductor ETF SOXX is down more than -3% at a 1-month low. SanDisk SNDK and Seagate Technology Holdings Plc STX are down more than -7%, and Intel INTC, Lam Research LRCX, and Western Digital WDC are down more than -6%. Also, Advanced Micro Devices AMD, Applied Materials APLD, and Marvell Technology MRVL are down more than -5%, and KLA Corp KLAC and Micron Technology MU are down more than -4%.
Cryptocurrency-exposed stocks are falling today, with Bitcoin IREN is down more than -10%, and Galaxy Digital Holdings GLXY and Riot Platforms RIOT are down more than -8%. Also, MARA Holdings MARA and BitMine Immersion Technologies BMNR are down more than -6%, and Robinhood Markets HOOD and Strategy MSTR are down more than -5%. In addition, Coinbase Global COIN is down more than -3%, and Circle Internet Group CRCL and Bullish BLSH are down more than -2%.
Cloud infrastructure stocks are under pressure today on debt concerns after credit-default swaps have priced in a more than 50% chance that CoreWeave could default on its debt within the next five years. Nebius Group NV NBIS and Lumentum Holdings LITE are down more than -8%, and CoreWeave CRWV is down more than -6%. Also, Arista Networks ANET and Applied Digital APLD are down more than -5%.
Software stocks are climbing today as investors rotate out of chip stocks into software. Intuit INTU is up more than +5% to lead gainers in the Nasdaq 100, and Autodesk ADSK is up more than +4%. Also, Workday WDAY and Adobe Systems ADBE are up more than +3%, and Salesforce CRM and Thomson Reuters TRI are up more than +2%. In addition, IBM IBM and ServiceNow NOW are up more than +1%.
Defensive pharmaceutical stocks are climbing today amid the broader market slump. Amgen AMGN, Eli Lilly LLY, Gilead Sciences GILD, and Vertex Pharmaceuticals VRTX are up more than +3%, and Biogen BIIB, Merck & Co MRK, Alnylam Pharmaceuticals ALNY, and Regeneron Pharmaceuticals REGN are up more than +2%. Also, Pfizer PFE is up more than +1%.
FMC Corp FMC is down more than -34% after cutting its Q3 adjusted Ebitda forecast to a loss of -$510 million to -$565 million, after previously expecting a profit of$120 million to $140 million.
Rocket Lab RKLB is down more than -13% to lead losers in the Nasdaq 100 after announcing that it will delay the launch of its inaugural Neutron medium-lift rocket until sometime in 2027.
Penske Automotive Group PAG is up more than +8% after entering a deal to be taken private for $212 a share in cash by Penske Corporation and Mitsui.
International Paper IP is up more than +5% to lead gainers in the S&P 500 after the Financial Times reported private equity firms Lone Star and Atlas Holdings are exploring bids to acquire the company.
Walmart WMT is up more than +3% after Deutsche Bank upgraded the stock to buy from hold with a price target of $136.
Kimberly-Clark KMB is up more than +3% after reporting preliminary Q3 net sales of $4.13 billion, above the consensus of $4.10 billion.
Commercial Metals CMC is up more than +2% after reporting Q4 net sales of $2.66 billion, better than the consensus of $2.54 billion.
Alcoa Corp (AA), Bank of New York Mellon Corp/The (BNY), Charles Schwab Corp/The (SCHW), First Horizon Corp (FHN), Interactive Brokers Group Inc (IBKR), JB Hunt Transport Services Inc (JBHT), Marsh & McLennan Cos Inc (MRSH), PNC Financial Services Group Inc (PNC), Prologis Inc (PLD), US Bancorp (USB).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.For more information please view the Barchart Disclosure Policy here.
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