NextFin News - U.S. stocks rebounded Thursday as a rotation out of technology and into defensive and value sectors lifted the Dow by more than 1%, even after a producer price report showed one of the largest wholesale inflation jumps on record. The Nasdaq finished barely higher after trading as much as 1.3% lower earlier, and the S&P 500 gained 0.3%. The session's central tension was a clash between the hot inflation data and falling Treasury yields, which pulled back sharply as investors reassessed the rate outlook. Healthcare, consumer and financial stocks led, while the chip selloff that had driven the previous days' losses eased.
The Dow Jones Industrial Average rose 1.08%
The S&P 500 Index rose 0.33%
The Nasdaq Composite advanced 0.08%
Stock & Sector Performance
Defensive and value sectors led the advance. The Dow closed at 52,177.69, a one-month high, with consumer names such as Walmart and Nike joined by healthcare and financial stocks. Equifax rose 7.25%, Fair Isaac gained about 7% and Pool Corp. advanced nearly 7%, among the S&P 500's best performers. Advancing stocks outnumbered decliners by about 2.6 to 1 on the NYSE.
Among the Magnificent Seven, Microsoft rose 1.08%, Alphabet gained 0.45% and Amazon added 0.27%, while Tesla slipped 1.29%. SpaceX fell 2.33% and Taiwan Semiconductor dropped 1.80%. CoreWeave rebounded about 3% after plunging more than 15% in the prior session, and Micron recovered, gaining between 1% and 2% after trading lower earlier.
Hot Sectors to Watch
Semiconductors and memory chips remained the market's most closely watched pressure point, but the selling paused. The PHLX Semiconductor Index fell about 4% on Wednesday, extending a streak of six straight lower sessions and putting it in correction territory, more than 10% below last week's peak. Overnight, the global memory-chip sell-off deepened: South Korea's Kospi ended 8% lower, Samsung Electronics closed down 9%, SK Hynix fell 11% and Japan's Nikkei dropped 5%. Micron's recovery in U.S. trading and the stabilization in CoreWeave suggest dip-buyers stepped in, but it is too early to call that a trend reversal. Worries about debt-financed AI infrastructure spending and higher borrowing costs remain unresolved.
Defensive sectors were the clearest rotation beneficiaries. Consumer and healthcare names led the Dow's gains as investors moved out of crowded AI trades.
Major Story of the Day
The September Producer Price Index was the day's dominant data point. Core PPI, which excludes food and energy, rose 0.7% on the month against 0.3% expected, the largest gain in four years. Headline PPI jumped 1.3%, the second-largest monthly increase on record. PPI excluding food, energy and trade services rose 0.5% on the month and 5.0% from a year earlier, a sign that the price pressure was not driven by energy alone. David Russell, global head of market strategy at TradeStation, said the PPI report, "after Wednesday's CPI, confirms inflation is getting worse as energy prices stay high." Even so, Treasury yields fell sharply, which helped stocks and drove the rotation toward defensive sectors.
After-Hours Earnings Preview
Bank earnings continue with U.S. Bancorp among the names reporting, while investors watch whether the hot inflation readings change the Fed's approach to the October meeting.
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