S&P 500 Bounces as Traders Buy Non-Chip Stocks: Markets Wrap
(Bloomberg) — Wall Street traders drove a rotation out of high-profile chipmakers and into a broader category of stocks while fueling a push toward the perceived safety of bonds.
Tech shares pared losses as Nvidia Corp.’s chief Jensen Huang pushed back on financial concerns about CoreWeave Inc., saying he doesn’t think it will need a bailout from his company. But a measure of credit risk at the AI data-center operator hit an all-time high, leaving investors worried. A gauge of chip giants lost 2.5% even as most S&P 500 companies rose.
In another sign of rotation, an equal-weighted version of the S&P 500 — which strips out market-value biases — climbed 1%. Worries about the durability of the AI investment cycle are also intensifying a debate about whether bonds are offering value after a rout that had propelled yields to multi-year highs.
“The selloff in tech-sector equities continues to drive safe-haven flows into the Treasury market and pressure yields lower,” said Vail Hartman at BMO Capital Markets.
Given the extraordinary amounts of debt being taken on to build out AI infrastructure, higher borrowing costs are far from ideal, noted David Morrison at Trade Nation.
“Two questions matter. Is demand for AI real? Yes,” said Manish Singh at Crossbridge Capital. “Are we going back to working and using software as we did before AI? No. The structural opportunity is real, but that does not mean every company building the infrastructure will generate attractive returns for investors.”
Ultimately, the AI revolution will be judged not just by how much computing power we build, but by how profitably we use it, Singh noted. Future cash flows must justify today’s enormous capital commitments, and someone must finance the gap in the meantime, he said.
“AI may be the future. Debt servicing is still the present,” Singh concluded.
Looking ahead, all eyes will be on Federal Reserve Chair Kevin Warsh’s remarks for clues on whether officials are pivoting from a skip to an October rate hike in light of the latest inflation data, according to Krishna Guha at Evercore.
“On balance, we think Warsh will talk in a way that does not suggest an October hike,” Guha said. “Warsh will be mindful of the global wobble in tech stocks and signs financing conditions are tightening for more exposed AI names, on top of the prior move up in longer-term yields.”
The Fed chief is due to speak late Thursday New York time in Bangkok, where he is scheduled to appear in a fireside chat with International Monetary Fund Managing Director Kristalina Georgieva.
Corporate Highlights:
Anthropic PBC told prospective investors its third-quarter revenue hit $16.8 billion, according to people familiar with the matter, as the AI company pushes ahead with plans to go public. Meta Platforms Inc. made one of its new artificial-intelligence models available for developers to download and modify, while keeping its most advanced technology closed in an effort to convert its AI investments into revenue. Super Micro Computer Inc. has appointed Mark Long as chief financial officer, saying it aims to grow more quickly in the artificial intelligence era. Charles Schwab Corp.’s earnings beat estimates as retail investors continue to pile into the stock market, though the firm’s bank deposits and net interest margin fell short of expectations. Penske Automotive Group Inc., one of the largest car dealership groups in the US, reached a deal with its two biggest shareholders to go private at a $16.3 billion enterprise value. What Bloomberg Strategists say…
“The unusually elevated spread between consumer staples and tech stock valuations signals the AI repricing has gone too far.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 2:15 p.m. New York time The Nasdaq 100 fell 0.6% The Dow Jones Industrial Average rose 0.9% The MSCI World Index rose 0.1% Currencies
The Bloomberg Dollar Spot Index fell 0.4% The euro rose 0.5% to $1.1217 The British pound rose 0.6% to $1.3276 The Japanese yen rose 0.2% to 158.07 per dollar Cryptocurrencies
Bitcoin rose 0.5% to $82,103.43 Ether rose 1% to $2,437.44 Bonds
The yield on 10-year Treasuries declined 10 basis points to 5.08% Germany’s 10-year yield declined five basis points to 3.41% Britain’s 10-year yield declined five basis points to 5.37% Commodities
West Texas Intermediate crude rose 3.1% to $98 a barrel Spot gold rose 1.2% to $4,155.66 an ounce ©2026 Bloomberg L.P.
