Philadelphia Semiconductor Index plummets 3.39%; Nvidia and Broadcom lead sector decline
Energy stocks surge on oil rally; Treasury yields retreat after intraday spike
U.S. equities closed in mixed territory on October 8 as weakness in the semiconductor sector dominated trading. Concerns regarding revenue expectations for major AI-linked firms pressured technology stocks, dragging the Nasdaq Composite down by more than 1%. The Dow Jones Industrial Average posted a modest gain, buoyed by strength in the energy and consumer staples sectors.
The Dow Jones Industrial Average rose 51.77 points (0.10%) to close at 51,231.64. The S&P 500 declined 36.41 points (0.47%) to 7,765.36, while the Nasdaq Composite fell 345.35 points (1.25%) to 27,193.34.
The semiconductor sector faced a particularly sharp downturn, with the Philadelphia Semiconductor Index sliding 442.44 points (3.39%) to finish at 12,623.72. Nvidia dropped 2.94% and Broadcom slid 4.35%, while Micron and AMD fell 4.79% and 3.90%, respectively. Intel shares retreated 5.34%.
AI-related stocks were weighed down by reports regarding OpenAI's revenue. The Financial Times (FT), citing materials provided to investors, reported that OpenAI’s annualized revenue as of the end of September was approximately $50 billion—lower than the previously reported $70 billion figure. The FT noted that the discrepancy arose during the investor estimation process as analysts adjusted for differing revenue calculation methodologies among competitors.
The broader technology sector saw divergent performances. Oracle dropped 5.48%, while Microsoft and Amazon shed 1.35% and 2.25%, respectively. Alphabet and Tesla declined by 0.63% and 0.74%. Conversely, Apple gained 1.11% and Palantir rose 2.40%.
The sharp rise in oil prices exacerbated inflation concerns, as geopolitical tensions in the Middle East and hurricane-related disruptions to U.S. offshore production stoked supply fears. West Texas Intermediate (WTI) crude futures surged 3.6% to settle at $91.49 per barrel, while Brent crude rose 4.1% to $104.28. Prices pared some gains during the session after U.S. President Donald Trump indicated he would not authorize an attack on Iran before the November midterm elections.
Energy stocks rallied in line with oil prices: ExxonMobil gained 2.71% and Chevron rose 3.12%. In the consumer staples sector, Walmart climbed 2.22%, Coca-Cola rose 2.27%, and PepsiCo jumped 3.73%.
In the bond market, Treasury yields retreated after strong demand was observed during the auction of U.S. 30-year notes. The 10-year Treasury yield, which had climbed to 5.35% earlier in the session, moderated to the 5.23% level.
Economic data released today showed a decline in new jobless claims. The U.S. Department of Labor reported that new filings for unemployment benefits for the week ending October 3 totaled 197,000, a decrease of 2,000 from the revised previous week. Meanwhile, continuing claims for the week ending September 26 rose by 17,000 to 1.716 million.
Market expectations regarding monetary policy continue to lean toward a rate hold in October, followed by potential further hikes toward the end of the year. The CME FedWatch tool indicated that the probability of a benchmark interest rate freeze at the October meeting outweighs the likelihood of a hike. Furthermore, the market is pricing in a higher probability that interest rates will be elevated above current levels by the December meeting.
