NEW YORK — U.S. stocks rebounded late in the session, led by defensive shares, as Treasury yields fell on a broad shift into safe-haven assets driven by concerns over credit tied to artificial intelligence investment.
The Dow Jones Industrial Average closed on the 15th at 52,177.69, up 556.21 points, or 1.08%, from the previous session. The Standard & Poor's 500 rose 25.12 points, or 0.33%, to 7,744.06, and the Nasdaq Composite gained 20.16 points, or 0.08%, to 26,713.03.
Among the largest companies by market value, Microsoft rose 1.08%, Amazon 0.27%, Google parent Alphabet 0.45% and Micron 1.87%. Declines included Nvidia, down 1.84%, Apple, down 0.28%, TSMC, down 1.80%, SpaceX, down 2.33%, Facebook parent Meta, down 0.11%, Broadcom, down 0.55%, Tesla, down 1.29%, SK hynix, down 0.98%, and AMD, down 1.50%.
The three main indexes opened broadly lower as they absorbed selling in AI-related shares and a shock reading on producer prices. The producer price index rose 1.3% in September from August, far exceeding market expectations of 0.6%, the Labor Department said. That was the highest reading since March 2022, when prices rose 1.7%. Core producer prices, which exclude volatile food and energy costs, climbed 0.7% from the previous month, also above forecasts of a 0.3% increase.
Retail sales rose 0.8% in September from the prior month, beating expectations of a 0.3% gain. Excluding gas stations, however, sales grew just 0.2%, indicating that higher prices rather than stronger overall consumption lifted the figure. Gas station sales jumped 6.4% on rising oil prices.
The indexes later turned higher as Treasury yields declined during the session. Risk aversion spread after corporate bonds issued by AI cloud provider CoreWeave were downgraded to distressed status the previous day, pushing bond prices up. Expectations that the Federal Reserve would not immediately raise its benchmark rate this month, despite the steep rise in prices, also contributed to the drop in yields.
The yield on the 10-year Treasury note, the global bond market's benchmark, fell as low as 5.037% during the session, while the 30-year yield, a reference for mortgage rates, dropped to 5.379%. The two-year yield, which is sensitive to monetary policy, slid to 4.681%.
Buying concentrated in defensive shares, with Eli Lilly up 3.55%, UnitedHealth up 2.79%, Nike up 5.21% and Home Depot up 4.31%. Walmart rose 1.47% after Deutsche Bank raised its rating on the stock to buy from hold, reflecting expectations that consumers will shift to low-cost retailers such as Walmart to escape inflation.
Most technology shares, by contrast, extended their losses. Even a record quarterly profit at Taiwan's TSMC, driven by the AI boom, was not enough to turn sentiment around. TSMC said third-quarter net profit rose 68.7% from a year earlier to 763.1 billion New Taiwan dollars, or about 31.7 trillion won, marking a sixth straight quarter of record earnings. The Philadelphia Semiconductor Index nonetheless fell 0.88%. CoreWeave, whose bonds plunged the previous day as debt taken on for data center investment drew scrutiny, rebounded 5.94% on bargain hunting. Sentiment was also helped by Nvidia Chief Executive Jensen Huang, who said at a Bloomberg event that day that CoreWeave's competitiveness was strengthening by the day.
Oil prices were mixed as traders weighed intensifying clashes between Yemen's pro-Iran Houthi rebels and Saudi Arabia, a drop in U.S. crude inventories and reports that Washington is considering easing sanctions on tankers. West Texas Intermediate crude for November delivery settled at $97.97 a barrel on the New York Mercantile Exchange, up $2.88, or 3.03%, from the previous session. WTI has risen for six consecutive sessions since the 8th, reaching its highest level since the 18th of last month. Brent crude for December delivery fell 14 cents, or 0.13%, to $105.92 a barrel on the ICE Futures Europe exchange in London.
U.S. crude inventories fell 8.6 million barrels to 415.6 million barrels as of the 9th, the Energy Information Administration said, a far steeper decline than the 288,000-barrel drawdown analysts had expected. In the Middle East, the Houthis said they had attacked targets including an operations command led by Saudi military officers inside Yemen's presidential palace. Reports that the U.S. government is weighing an easing of restrictions on sanctioned tankers involved in shipping Russian crude eased upward pressure on prices.
