- Nasdaq sinks as chip stocks tumble
- Mag 7 under pressure: Apple bucks the selling
- Bitcoin follows the flows and today that flow is “risk-off” and selling.
- The evidence mounts that the US dollar is leveraged to the AI trade
- US treasury excels $26 billion of five-year tips at a high yield of 2.367%
- US 10-year yields fall, near 5% level but it’s for the wrong reasons
- Crude oil buyers remain in control from a technical perspective. What would tilt the bias lower?
- Trading Education: Gold falls despite lower yields: A lesson in trading what the market gives you
- Canada September PPI +2.0% m/m vs +1.3% prior
- US initial jobless claims 194K vs 200K estimate. Better than expected.
- Morning Kickstart: Stocks fall as oil rises on Iran risks
- investingLive European session wrap: Dollar, yen and bonds kick it old school
U.S. markets traded on two tracks Thursday. Technology and AI-related shares came under renewed pressure, while the Dow and small caps managed modest gains. The Nasdaq lost 2.60%, with the more concentrated Nasdaq 100 falling 2.90%. The Dow’s near-unchanged finish did little to describe the pressure beneath the surface.
The other big move came in Treasuries, where yields plunged by roughly 15–19 basis points. That is a significant decline. Recall the 10 year note reached 5.36% just last week. It is currenly at 4.96%.
Now, lower borrowing costs would normally give growth stocks some support. Today, that support was missing. Investors remained focused on AI spending and returns, while higher oil kept the inflation problem in the picture.
Dollar mixed; yen leads
The dollar finished mixed. It was strongest against the New Zealand dollar and weakest against the Japanese yen.
USDJPY fell 0.82% to 156.83, while USDCHF declined 0.46% to 0.8206. The sharp drop in Treasury yields helped support those moves. USDCAD also fell, down 0.21% to 1.4015, as higher oil and strong Canadian producer-price data provided a supportive backdrop for the loonie.
Elsewhere, EURUSD declined 0.17% to 1.1213, AUDUSD fell 0.14% to 0.7017, and NZDUSD dropped 0.32% to 0.5682. GBPUSD was little changed, up 0.02% at 1.3397.
The message? Selling in U.S. technology did not produce a broad rush into the dollar.
Treasury yields plunge
The late-session yield snapshot showed:
- 2-year: 4.6524%, down 17.1 basis points.
- 5-year: 4.7784%, down 19.2 basis points.
- 10-year: 4.9612%, down 18.5 basis points.
- 30-year: 5.2857%, down 15.1 basis points.
The 10-year moved below 5%, with the strongest buying concentrated in the intermediate maturities. That was consistent with investors seeking safety and reassessing the outlook for growth and monetary policy.
During the afternoon, InvestingLive reported that futures pricing assigned a 22% probability to no further Fed hike this year. That still left another increase as the more likely outcome, but traders were giving a pause more consideration. investinglive.com
U.S. stocks: Technology takes the hit
The supplied closing snapshot showed:
- Dow industrial average: 52,873.28, +11.98 points or +0.02%.
- S&P 500: 7,663.43, −93.74 points or −1.21%.
- Nasdaq Composite: 26,008.86, −694.00 points or −2.60%.
- Russell 2000: 2,784.03, +3.01 points or +0.11%.
- Nasdaq 100: 28,958.69, −863.83 points or −2.90%.
The gap between the Nasdaq and the Dow was the story. Investors were particularly hard on the technology companies carrying much of the AI investment boom.
Meta fell around 7% during the session, with its spending plans drawing scrutiny. The concern was whether the eventual returns would justify the enormous investment. investinglive.com
My Mag 7 update highlighted Apple (closed up 1.23%) as the exception to the selling across that group. Semiconductor weakness added to the pressure on the Nasdaq indices. The Dow and Russell holding small gains showed that some money was rotating, although the negative breadth meant this was hardly a healthy session underneath. investinglive.com
Overall the Nasdaq composite had it’s worst day since June 5th. The Nasdaq 100 had it’s worst day since June 23. Both indices closed below their 100 day MAs.
Economic data: Fewer layoffs, but hiring bears watching
Initial jobless claims fell to 194,000 versus 200,000 expected, with the prior week revised to 200,000 from 199,000. The four-week average declined to 197,750. Employers are still holding on to workers.
The offset came from continuing claims, which rose to 1.728 million versus 1.720 million expected. That suggests some workers are taking longer to find another job, although one weekly increase does not establish a trend.
The report offered little evidence of a sharp deterioration in employment. Nevertheless, the subsequent Treasury rally showed that the broader market’s concerns outweighed the stronger initial-claims headline.
In Canada, September producer prices rose 2.0% month over month, following 1.3%, with annual growth accelerating to 14.5%. Raw materials prices jumped 4.8% on the month and 27.0% annually.
Those are pipeline inflation pressures, rather than a direct forecast for consumer prices. Still, they complicate the Bank of Canada’s outlook after the softer CPI report earlier in the week. The supplied morning report put the probability of an October 28 hike near 80%.
Oil rises as Middle East risks persist
Crude oil was trading at $99.07, up $1.92 or approximately 1.98%.
The Middle East continued to provide support. InvestingLive’s coverage highlighted reports of preparations for possible renewed U.S.–Israeli strikes on Iran and intensifying Houthi attacks on Saudi Arabia. Those were reported risks, rather than confirmation that another round of strikes had begun. investinglive.com
As Adam outlined in his post on the Middle East stalemate, the absence of a diplomatic breakthrough continued to hang over energy markets. investinglive.com
That leaves traders facing an uncomfortable combination: falling yields and pressure on growth shares, but oil still near $100. The bond rally does not mean the inflation risk has disappeared.
Gold and silver fail to find support
Gold was trading at $4,021.61, down $119.41 or 2.88%. Silver fell $3.4024 or 5.87% to $54.5456.
Gold’s decline stood out because Treasury yields were sharply lower. Falling yields normally reduce the opportunity cost of holding a metal that pays no interest. Today, that relationship did not deliver support.
InvestingLive’s gold coverage discussed concerns about tighter financial conditions alongside persistent inflation risks. Position reductions and demand for cash are also plausible explanations for gold falling with equities, although the price action alone cannot establish the cause. investinglive.com
Silver’s larger decline, alongside copper falling 2.68% to $6.4030, was consistent with pressure on industrially sensitive metals as well.
Bitcoin follows the selling
Bitcoin was trading at $81,214, down $2,810 or 3.34%, in the supplied snapshot.
For this session, it followed the pressure in technology and other risk assets. The sharp decline in yields failed to attract enough buying to offset those flows. Bitcoin was offering little protection from the equity selloff.
The next session will test whether technology buyers can regain their footing and whether the Treasury rally signals growing economic concern. Friday’s U.S. flash PMIs provide another growth check, while Middle East headlines remain the wildcard for oil and inflation expectations. Lower yields gave buyers an opportunity today. In technology, gold and Bitcoin, they failed to take it.
This article was written by Greg Michalowski at investinglive.com.