S&P 500 fell 93.74 points (1.2%) to 7663.43 - worst day since July. The Dow Jones added 11.89 points to 52,867.98, while the Russell 2000 rose 0.1% to 2784.03. Year to date, the Nasdaq and S&P 500 are still up 11.9%, and the Dow is up 10%.
The Philadelphia Semiconductor Index slid to 10,731.98. AMD -8.10%, Meta -6.98% to $648.85, Micron -6.26%, Nvidia -4.40%. Among AI hardware suppliers, the worst performers were Celestica at about -12% and CoreWeave at about -10%.
The market's question is not about demand for AI compute, but about how to finance it. Meta announced the issuance of a new class of non-voting shares, and Reuters reported the company's first negative cash flow in more than ten years. Nvidia chief Jensen Huang said demand for capital exceeds its supply; CoreWeave's order backlog stands at $104 billion.
The second factor is oil amid the conflict around Iran: Brent reached $115.86 (the $114 level for the first time since May), WTI was around $101.58. The yield on 10-year US Treasuries (the benchmark cost of money in the economy) reached 5.02% on Thursday, closed near 4.95%, and was at 4.99% on Friday. Gold dropped to $3986.74.
By 18:12 Moscow time on Friday, the picture had diverged: Nasdaq +0.2%, S&P 500 -0.2%, Dow -541 points (about 1%), while three-quarters of S&P 500 stocks declined. Ahead are the Fed meeting on October 27-28, September PCE inflation, and earnings from Microsoft, Alphabet and Amazon.
Did you trade this chip selloff?
Thursday was an honest day: the decline was broad and readable from the US open. The only question is how much those 2.6% on the index added to your balance: on a three-thousand-dollar deposit, a session like that covers dinner, not a month. In prop trading, your position size is limited not by your deposit, but by the limits of the company that gives you an account for a share of the profit. There is time before the Fed meeting on October 27-28 to figure out the scheme.