Major indices finish higher as Philadelphia Semiconductor Index retreats for seventh straight session
CoreWeave rebounds 5.9%; Treasury yields decline despite jump in producer prices
New York stocks closed higher on Tuesday following a mixed performance across major sectors. While semiconductor equities remained under pressure due to concerns over the debt burden of artificial intelligence (AI) infrastructure firms, robust gains in healthcare and software sectors buoyed the benchmarks. The Dow Jones Industrial Average rose more than 1%, while the tech-heavy Nasdaq Composite saw more modest gains.
On October 15 (local time), the Dow Jones Industrial Average jumped 556.21 points, or 1.08%, to close at 52,177.69. The S&P 500 Index added 25.12 points, or 0.33%, to finish at 7,744.06, while the Nasdaq Composite edged up 20.16 points, or 0.08%, to 26,713.03. The Russell 2000, which tracks small-cap stocks, also climbed approximately 1.4%.
In the healthcare sector, Eli Lilly rose 3.55% and UnitedHealth gained 2.79%. Medical device manufacturer Stryker also advanced 4.12%. Among consumer-related stocks, Walmart and Home Depot showed strength, rising 1.47% and 4.31%, respectively.
Software stocks also posted significant gains. ServiceNow surged 6.14%, Intuit jumped 6.36%, and both Salesforce and Adobe climbed 4.57%. Microsoft rose 1.08% and Oracle added 3.00%, diverging from the broader weakness seen in the semiconductor space.
The Philadelphia Semiconductor Index fell 103.16 points, or 0.88%, to 11,581.22, marking its seventh consecutive day of losses. Nvidia dropped 1.84%, AMD fell 1.50%, and Intel retreated 2.80%. Semiconductor equipment makers Applied Materials and Lam Research also declined by 3.72% and 3.30%, respectively. Conversely, Micron rose 1.87% and Qualcomm gained 3.35%.
Strong earnings and revenue guidance from TSMC failed to trigger a broader recovery in the sector. TSMC’s third-quarter sales revenue reached $46.72 billion, exceeding the company’s previous guidance of $44.6 billion to $45.8 billion. Despite providing a fourth-quarter sales revenue forecast of $52.3 billion to $54.3 billion, TSMC’s U.S.-listed shares declined following the announcement.
As investors evaluate AI-related companies, financial leverage has emerged as a key concern alongside growth rates. Reuters reported that debt-fueled data center expansions are raising alarms regarding the financial stability of AI infrastructure firms such as CoreWeave. Persistently high interest rates could increase the cost of capital required for further investment and the refinancing of existing debt.
CoreWeave, which saw a sharp sell-off in the previous session, rebounded roughly 5.9% today. According to the Wall Street Journal, the stock recovered after Nvidia CEO Jensen Huang expressed confidence in CoreWeave’s improving financial health during a Bloomberg event.
On the economic front, the Bureau of Labor Statistics (BLS) reported that the September Producer Price Index (PPI) rose 1.3% month-on-month and 6.3% year-on-year. The monthly increase was the largest recorded since March 2022.
Meanwhile, the Commerce Department reported that September retail sales increased by 0.8% from the previous month. However, sales in the "control group"—a metric used to estimate goods consumption for GDP calculations—grew by only 0.1%. This suggests that the headline retail sales growth may not reflect a broad-based strengthening of consumer demand for goods.
In the bond market, Treasury yields moved lower despite the hot inflation data. The yield on the benchmark 10-year Treasury note fell approximately 10 basis points (1bp=0.01 percentage point), dropping from 5.19% to around 5.09%. The Financial Times noted that safe-haven demand for government debt increased amid growing anxiety over AI sector investments and financing.
