Wall Street slipped at midday Wednesday as a hotter-than-expected September inflation report stoked bets that the Federal Reserve will keep raising rates, with the Nasdaq 100 down 1.0% and semiconductors extending their losing streak to a seventh straight session.
Headline consumer prices rose 3.7% from a year earlier, above the 3.6% forecast and up from 3.4% in August, as gasoline prices jumped 7.1% on the month. Core CPI also came in above expectations at 2.6%.
Treasury yields climbed in response. The 2-year yield rose 14 basis points to 4.93%, while the 10-year gained 10 basis points to 5.31%, and the U.S. dollar index hit an 18-month high near 102.75.
Markets now assign a 45% chance of a further Fed rate hike at the Oct. 28 meeting.
White House economic adviser Kevin Hassett said earlier Wednesday that “this month’s core inflation was a blip,” adding that more data is needed before the Fed decides on rates.
Across U.S. equity markets by midday Wednesday, losses were concentrated in technology and rate-sensitive areas, while defensive health care names provided a cushion.
- The S&P 500 fell 0.7% to 7,751
- The Dow Jones Industrial Average slipped just 0.1%, or 46 points, to 51,624.
Gains in UnitedHealth Group Inc. (NYSE:UNH) (up 2.5%), Amgen Inc. (NASDAQ:AMGN) (up 3.2%) and Merck & Co. Inc. (NYSE:MRK) (up 2.2%) offset a 1.8% drop in Caterpillar Inc. (NYSE:CAT) and a 1.9% decline in Nvidia Corp. (NASDAQ:NVDA).
The Nasdaq 100 dropped 1.0% to 30,265. Within Magnificent Seven stocks, Meta Platforms Inc. (NASDAQ:META) fell 2.1%, Nvidia lost 1.9% and Tesla Inc. (NASDAQ:TSLA) slid 1.8%, while Apple Inc. (NASDAQ:AAPL) bucked the trend with a 1.1% gain.
In chips, Advanced Micro Devices Inc. (NASDAQ:AMD) sank 3.5%, Broadcom Inc. (NASDAQ:AVGO) fell 1.7% and Micron Technology Inc. (NASDAQ:MU) lost 1.6%. The small-cap Russell 2000 fell 1.3%.
Gold retreated as the stronger dollar and higher real yields weighed. The SPDR Gold Shares (NYSE:GLD) slid 1.7%, with gold futures down 1.4% near $4,119 an ounce and silver dropping 5.3% to about $56.36.
Wednesday’s Performance In Major US Indices
| Index | Last | % Change | MTD | YTD |
|---|---|---|---|---|
| S&P 500 | 7,751.26 | -0.69% | +1.30% | +13.23% |
| Dow Jones | 51,624.28 | -0.09% | +1.41% | +7.41% |
| Nasdaq 100 | 30,264.81 | -1.00% | -0.47% | +19.86% |
| Russell 2000 | 2,746.87 | -1.31% | -1.79% | +10.68% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) fell 0.7%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) slipped 0.1%.
- The Invesco QQQ Trust (NASDAQ:QQQ) declined 1.0%.
- The iShares Russell 2000 ETF (NYSE:IWM) dropped 1.3%.
Health Care Stands Alone As Chips, Gold Miners And AI Infrastructure Sell Off
Among S&P 500 sectors, the Health Care Select Sector SPDR Fund (NYSE:XLV) led with a 1.6% gain. The Consumer Staples Select Sector SPDR Fund (NYSE:XLP) rose 0.7% and the Energy Select Sector SPDR Fund (NYSE:XLE) added 0.2%.
The Technology Select Sector SPDR Fund (NYSE:XLK) was the weakest, down 1.6%.
The Financial Select Sector SPDR Fund (NYSE:XLF) and the Utilities Select Sector SPDR Fund (NYSE:XLU) each lost 1.3%, while the Real Estate Select Sector SPDR Fund (NYSE:XLRE) and the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) fell 1.2%.
The Communication Services Select Sector SPDR Fund (NYSE:XLC) and the Industrials Select Sector SPDR Fund (NYSE:XLI) each slid 1.0%, and the Materials Select Sector SPDR Fund (NYSE:XLB) lost 0.8%.
Among industry funds, the VanEck Gold Miners ETF (NYSE:GDX) tumbled 4.0% alongside bullion, and the iShares U.S. Home Construction ETF (BATS:ITB) dropped 2.7% as mortgage-sensitive stocks reacted to higher yields.
The iShares Semiconductor ETF (NASDAQ:SOXX) fell 2.3% for a seventh straight session, leaving it nearly 10% below its Oct. 5 close, while the VanEck Semiconductor ETF (NASDAQ:SMH) lost 2.2%.
On the Upside
The iShares Biotechnology ETF (NASDAQ:IBB) rose 1.3%.
In Russell 1000 gainers, the bid was led by drug and biotech names.
Halozyme Therapeutics Inc. (NASDAQ:HALO) jumped 7.2% and Eli Lilly and Co. (NYSE:LLY) gained 3.4%, with Amgen adding 3.2% and AbbVie Inc. (NYSE:ABBV) up 3.0%.
The moves look like a sector-wide rotation into defensives.
GlobalFoundries Inc. (NASDAQ:GFS) rose 5.0% after it was selected to operate two new semiconductor fabs in New York under a U.S.-Japan initiative, according to a company press release. Caris Life Sciences Inc. (NASDAQ:CAI) climbed 4.8%.
On the Downside
AI infrastructure financing names were hit hardest.
CoreWeave Inc. (NASDAQ:CRWV) plunged 13.8% as a bond yield touching 15% and a “Yikes” reaction from Elon Musk weighed on the stock.
TeraWulf Inc. (NASDAQ:WULF) fell 9.3% and DigitalOcean Holdings Inc. (NYSE:DOCN) dropped 10.0%, trading in sympathy with CoreWeave and other neocloud peers such as IREN Ltd. (NASDAQ:IREN), which lost 8.5%.
Fermi Inc. (NASDAQ:FRMI) sank 9.3%, giving back part of Tuesday’s 14% surge on AMD credit support for its Project Matador.
Affirm Holdings Inc. (NASDAQ:AFRM) slid 9.2 as rate-sensitive fintechs sold off, with SoFi Technologies Inc. (NASDAQ:SOFI) down 6.2% and Robinhood Markets Inc. (NASDAQ:HOOD) off 6.2%.
Elsewhere, Dell Technologies Inc. (NYSE:DELL) fell 8.2% and Oracle Corp. (NYSE:ORCL) lost 6.5%, while Bank of America Corp. (NYSE:BAC) dropped 7.7% after a $1.2 billion money-laundering penalty drove an earnings miss.
Wednesday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Halozyme Therapeutics, Inc. | +7.22% |
| GLOBALFOUNDRIES Inc. | +5.00% |
| Caris Life Sciences, Inc. | +4.76% |
| Eli Lilly and Company | +3.36% |
| Amgen Inc. | +3.19% |
Wednesday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| CoreWeave, Inc. | -13.82% |
| DigitalOcean Holdings, Inc. | -9.96% |
| TeraWulf Inc. | -9.33% |
| Fermi Inc. | -9.27% |
| Affirm Holdings, Inc. | -9.20% |
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