📊 Global markets ended flat, but the mood under the surface is anything but calm 😬
Worries about AI spending and higher interest rates keep weighing on tech and chip stocks 💻
The picture across the board: 📍 Dow +1.08%, S&P 500 +0.33%, Nasdaq +0.08% 📍 Philadelphia Semiconductor index down nearly 1% 📍 South Korea’s KOSPI plunged almost 8% overnight, Nikkei fell nearly 5% 🌏 📍 MSCI Asia-Pacific (ex-Japan) had its biggest one-day drop since July
Why the jitters? 🤔 Investors are questioning how sustainable demand for AI data centers really is, while higher funding costs make big infrastructure bets harder to justify. As one PNC strategist put it, there’s “a lot of investor skittishness” about AI’s path forward.
Elsewhere 👀 📍 10-year Treasury yield fell to ~5.06%, its biggest daily drop in over a year 📍 Producer prices posted their biggest rise in 4.5 years 📍 Fed expected to hold on Oct. 28 (73% odds) 📍 Dollar slipped from an 18-month high, gold rose 1.6% to $4,169 🪙
Is this a healthy pause in the AI trade, or the first crack in the rally? 🤔
#Fed unanimously raises benchmark rate by 25bps to 3.75%-4% range as expected. FOMC Median forecast shows one additional 25bps hike in 2026. So the Fed and Warsh past the credibility test, at least for now! https://t.co/ktWeIWlOyr
Weaker New York manufacturing data did little to lift gold.
The Empire State index fell to 7.6 from 20.6, below the 14.8 forecast, while spot gold traded at $4,283.60, down 0.34%. Markets price a >90% chance of a 25-bp Fed hike.
In this Sept. 11 interview, Gary Wagner placed December futures support near $4,350, with major support just below $4,000. The contract has since traded below $4,350.
Gold is down 1.7% this week at $4,354.90 as markets price a nearly 90% chance of a Fed hike. But analysts say holding $4,300 support and rising fiscal risks could limit the longer-term damage.
