The Nasdaq Composite surrendered 2.1% on Friday and 4.5% across the week’s five sessions, snapping a four-week winning streak. The S&P 500 lost 1.2% on the day and 2% on the week, its fourth down week in six. The Dow? Off 0.3% Friday, yet up 0.7% for the week, a second straight weekly gain.
Inflation, again. Consumer and producer price readings that came in hotter than anticipated this week have put the Federal Reserve back under pressure ahead of policy meetings late this month and in early December. Chair Kevin Warsh, speaking at a gathering of the International Monetary Fund in Bangkok, gave no signal on the direction of interest rates.
“It’s a new chapter at the Fed, and we’re not in that business anymore,” Warsh said.
Traders now see a 17% chance of a rate hike at the late-October meeting, down from 28% a day earlier, according to CME FedWatch. The odds they assign to a December hike sit at 89%, unchanged.
The 10-year Treasury yield held above 5.09% in late trading, up two basis points from Thursday’s close. It had spiked to 5.33% after Wednesday’s CPI data before reversing, as the tech-driven selloff steered money toward safer assets.
AI stocks carry the damage
CoreWeave dropped 12%, its second steep fall inside three days. The Nvidia-backed firm had plunged more than 15% Wednesday on debt concerns, then bounced 6% Thursday. Roundhill’s memory-chip ETF sank another 5.5%, dragged lower by Western Digital, Sandisk, Micron and Seagate, while the iShares Semiconductor ETF fell 4% after an 8% weekly decline through Thursday.
The Magnificent Seven did not escape either. The Roundhill Magnificent Seven ETF slid 2%, with Meta Platforms off nearly 4% and Tesla down 2% the day after unveiling its new all-electric Roadster. Nvidia, still the most valuable public company on earth, slipped 1.5%. Apple alone stayed green, up about 0.5%.
Melissa Brown, who heads investment decision research at SimCorp, warned that markets tend to peak once a theme swells beyond roughly 40% of total value. “The U.S. market is there now.”
Oil runs the other way
Crude surged as traders decided Middle East risk outweighed efforts to lift supply. West Texas Intermediate jumped 3.4% to $101.35 a barrel, and Brent climbed 3.5% to $109.55.
Bitcoin traded near $81,400 after overnight highs around $82,500. The dollar index eased 0.3% to 101.80. Gold futures added 0.5% to $4,190 an ounce.
The ledger for the year still looks kind, for now. Both the Nasdaq and the S&P 500 sit 12% higher, the Dow 8%.
