The S&P 500 and Nasdaq $NDAQ Composite fell in morning trading on Thursday as tech stocks extended their selloff to a second day and wholesale prices rose 1.3% in September. The Nasdaq opened more than 1% lower, while the Dow Jones Industrial Average gained.
The producer price index rose 1.3% on the month and 6.3% from a year earlier. That was the largest monthly increase since early 2022, according to The Wall Street Journal. Economists had expected gains of 0.6% on the month and 5.5% on the year, according to CNBC.
Wednesday's consumer price index reading had already unsettled markets by coming in above forecasts on a year-over-year basis, according to CNBC. The hotter-than-expected data stoked fears that the Federal Reserve may need to take a more aggressive stance on rates before the end of the year, CNBC reported. MarketWatch also pointed to rising odds of a Fed rate hike.
"Today's PPI report, after Wednesday's CPI, confirms inflation is getting worse as energy prices stay high," said David Russell, global head of market strategy at TradeStation, according to CNBC. "Election or no election, prices are rising and the Fed might be forced to act."
CoreWeave stock was down 7% on Thursday, extending a prior-session plunge of more than 15%. Investors have grown fearful that the company is borrowing too much for its AI build-out, according to CNBC. The company's bonds also slid.
Anthropic's third-quarter revenue grew to $16.8 billion, according to CNBC. Some market participants are skeptical that the revenue trajectory is strong enough to support the run-up in semiconductor stocks, CNBC said.
Chip-related stocks led the declines. Advanced Micro Devices shed 5% and Micron $MU Technology gave up 4%. Sandisk declined 6%, and the U.S.-listed shares of SK Hynix fell 5%. South Korea's Kospi index fell more than 7%, and Japan's Nikkei dropped almost 5%.
TSMC $TSM posted another record profit on Thursday and said there is "no ceiling" for its profitability, according to The Wall Street Journal. The results did not lift tech stocks, the Journal said.
Investors moved into government bonds as tech stocks fell. The 10-year Treasury yield slipped to 5.065%, a decline of 0.121 percentage point on the day. The Wall Street Journal said yields had jumped at first after Wednesday's inflation report before reversing.
Stocks outside tech rose. Walmart $WMT advanced 4% and Merck $MRK added more than 3%.
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