Markets in 5Thursday, November 12
Chip rebound meets Fed hike bets and Nvidia uncertainty
Stocks rose Wednesday after hot inflation data, yields climbed and Fed officials weighed faster hikes; Nvidia's leadership report is the open's key risk.
Stocks
Stocks rebound as CoreWeave revives AI trade
The S&P 500 rose 1.31% to 7,619.38 on Wednesday, and the Nasdaq Composite jumped 1.60% to 25,466.19, after stocks had fallen following Tuesday's hotter-than-expected consumer price report. The rebound was led by CoreWeave, whose earnings reignited the AI trade. The Dow gained 0.49% to 52,486.49, and the Nasdaq-100 led the major indexes with a 2.28% gain. For the week, the S&P 500 was up 3.3%.
Rates
Two-year yield posts biggest jump in about 19 months
Bond markets were closed Wednesday for Veterans Day, so the latest Treasury figures are from Tuesday's close. The two-year yield rose to 4.73% from 4.56%, a 17 basis point jump that CNN described as its biggest move in about 19 months. The 10-year yield rose 10 basis points to 4.98%, and the gap between the two-year and 10-year yields stood at 25 basis points.
The Fed
Fed officials weigh faster hikes after hot inflation
Fed Governor Waller said he is leaning toward a quarter-point hike in December and would consider a half-point move if core inflation reached 0.3% or higher, which October's data met. Dallas Fed President Logan backs at least two more quarter-point hikes, while Philadelphia Fed President Paulson supports only gradual increases. Markets price about 90% odds of a hike at the December 8-9 meeting, and Chair Kevin Warsh declined to say whether more increases are likely.
Economy
October consumer prices rise faster than expected
The October consumer price index, released Tuesday, rose 0.4% month over month, above the 0.3% consensus. Core prices rose 0.3%, against 0.2% expected. The CNBC/NRF Retail Monitor, released Wednesday, showed October retail sales rising at their slowest pace in nearly a year, with consumers showing signs of strain from high prices.
Sectors
Chip stocks lead, but Nvidia faces leadership report
Technology (XLK) rose 2.7% and Energy (XLE) rose 1.8% on Wednesday, while Consumer Discretionary (XLY) fell 0.4%. Every member of the Philadelphia semiconductor index finished higher. Nvidia reversed an earlier rebound after the Wall Street Journal reported its board was preparing to oust CEO Jensen Huang, and its shares fell as much as 10% in late trading. Overnight, S&P 500 futures were down about 0.3% and Nasdaq futures about 0.6%.