Dow, S&P 500, Nasdaq Decline Amid Hot Inflation Data, AI Selloff: CRWV, NBIS, NVDA, IBRX Stocks In Focus

• The September consumer price index (CPI) rose 0.6% for the month, while the annual rate came in at 3.7%.
• The rising inflation stoked concerns about a Federal Reserve rate hike. 
• Meanwhile, the semiconductors industry took a sharp hit on Wednesday as a selloff in South Korea’s tech stocks weighed on U.S. counterparts. 

U.S. stock futures were down late Wednesday as hotter-than-expected inflation data and a sharp selloff in chip stocks pressured benchmark indexes. 

As of 10:57 p.m. EDT, Dow futures were down about 0.04%, while the S&P 500 futures fell 0.42% and the Nasdaq-100 futures declined 1.04%. 

On Wednesday, the three benchmark indexes closed lower. The Nasdaq Composite led the decline, shedding more than 500 points and closing nearly 2% lower. The Dow Jones Industrial Average and S&P 500 fell 0.09% and 1.11%, respectively, at close. 

The tech-heavy Nasdaq Composite notched its worst day since July 23. 

Key US Market Drivers

Red-hot inflation data, triggered by soaring energy prices, weighed heavily on markets on Wednesday. 

The consumer price index (CPI) reading for September rose 0.6% month over month, while the annual rate came in at 3.7%, according to the Bureau of Labor Statistics. CNBC reported that economists surveyed by Dow Jones expected gains of 0.6% and 3.6%. Core CPI rose 0.3% for September and was up 2.6% annually, higher than estimates. 

Economist Justin Wolfers noted in a post on X, “Three things to take from today's inflation numbers: the level is too high, the trend isn't improving, and it's worse than forecasters thought. That's about as cheerful as a wet weekend.”

The rising inflation stoked concerns about a Federal Reserve rate hike. According to data from the CME FedWatch tool, the probability of a rate hike in the Fed’s October meeting increased to 27.1% from 17.7% a week ago. 

Financial services commentator The Kobeissi Letter said in a post on X that the inflation numbers officially mark the third-highest reading since September 2023. “Rate hike expectations are rising on the news,” it said. 

Meanwhile, the semiconductors industry took a sharp hit on Wednesday as a selloff in South Korea’s SK Hynix and Samsung Electronics weighed on U.S. counterparts. 

ChangXin Memory Technologies (CXMT), China’s largest DRAM manufacturer, announced plans to develop new products earlier this week and said it will release next-generation products by the end of 2026, likely reducing the cell area for data storage in current DRAMs by about 33%. This stoked concerns that Chinese products could edge out other players and weigh on major semiconductor companies.

In the U.S., Nvidia Corp. (NVDA) dipped 3% at Wednesday's close, while Micron Technology Inc. (MU) and Advanced Micro Devices Inc. (AMD) fell more than 4% and 5% each, respectively. 

The iShares Semiconductor ETF (SOXX) plunged 4.5% at close and continued to slip overnight amid the pressures. The VanEck Semiconductor ETF (SMH) fell nearly 4%. 

Markets will be watching Thursday’s September reading on producer prices. Meanwhile, third-quarter earnings are also in focus, with big banks kicking off the season. 

Trending Stocks To Watch 

CoreWeave Inc. (CRWV): Shares of the neocloud company plunged more than 15% at close on Wednesday and continued to dip overnight after Gartner predicted that 80% of neoclouds will not have independent operations by 2030 amid the rapid growth of AI infrastructure spending. 

Nebius Group N.V. (NBIS): The company was in focus after shares plunged more than 10% at close and were down more than 2.5% overnight on the same Gartner report. 

NVIDIA Corp. (NVDA): The AI chipmaker’s shares fell by over 3% at close and dipped more than 1% overnight amid the selloff in South Korean chip stocks. 

ImmunityBio Inc. (IBRX): The company was in focus after the U.S. Food and Drug Administration approved its flagship immunotherapy drug, Anktiva, sending the stock higher. 

Other Market Trends 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) all declined overnight. 

Meanwhile, U.S. long-dated Treasury yields continued above 5%. At the time of writing, the 10-year U.S. Treasury yield was trading at 5.102%, and the 30-year Treasury bond yield was 5.452%. 

The iShares 20+ Year Treasury Bond ETF (TLT) was up nearly 1% amid ‘neutral’ sentiment. 

Oil prices declined at the time of writing despite growing geopolitical uncertainties. Brent crude futures expiring in December were trading at $104.29 a barrel, down more than 1%, while WTI crude futures expiring in November traded at $93.86 per barrel.

Asian markets opened lower on Thursday, with South Korea's KOSPI leading the declines. Japan’s Nikkei 225, China’s SSE Composite and Australian stocks all traded lower at the open.

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