US Market Analysis: AI Financing Fault Lines Widen as Money Flees to Defensive Sectors Overnight
All three major US stock indexes closed higher on Thursday. The Dow rose 1.08% to 52,177, the S&P 500 gained 0.33%, and the Nasdaq edged up just 0.08%. The Nasdaq fell as much as 1.4% early in the session, while the Philadelphia Semiconductor Index plunged more than 4%, only to claw back its losses near the close.
Macroeconomic news: The US Producer Price Index (PPI) rose 1.3% month over month and 6.3% year over year in September, with both figures marking their largest increases since 2022. Yet, unusually, the 10-year Treasury yield fell by more than 12 basis points—as investors sought safety in bonds rather than pricing in rate hikes.
Impact across asset classes:
Stocks: Fault lines in the AI financing chain continue to widen. CoreWeave’s 5-year CDS briefly topped 1,140 basis points, with the market pricing in a more than 60% probability of default within five years. After Jensen Huang publicly backed the company, its shares reversed course from a drop of more than 8% to close up 5.94%. Money flowed from semiconductors into healthcare and consumer stocks: Eli Lilly led pharmaceutical stocks with a gain of more than 3%, while Nike rose more than 5%.
Bonds: Spreads on AI-related bonds continue to widen, and the yield on CoreWeave bonds due in 2031 surged to 15.78%. Oracle’s CDS rose to 288 basis points. If its rating falls below BBB, investment-grade funds will be forced to liquidate their holdings.
Crypto and precious metals: Circle gained more than 9%, and Coinbase rose more than 6%. Gold rebounded to $4,155 as risk aversion took hold.
Stocks can rebound on a single line of reassurance; bonds can’t. CoreWeave shares rebounded on the same day its credit spreads widened—the fault line between the AI narrative and financial reality is being priced in by the bond market. #AI和半导体股本周市值损失超1万亿美元 #美国9月PPI年率升至6.3%
All three major US stock indexes closed higher on Thursday. The Dow rose 1.08% to 52,177, the S&P 500 gained 0.33%, and the Nasdaq edged up just 0.08%. The Nasdaq fell as much as 1.4% early in the session, while the Philadelphia Semiconductor Index plunged more than 4%, only to claw back its losses near the close.
Macroeconomic news: The US Producer Price Index (PPI) rose 1.3% month over month and 6.3% year over year in September, with both figures marking their largest increases since 2022. Yet, unusually, the 10-year Treasury yield fell by more than 12 basis points—as investors sought safety in bonds rather than pricing in rate hikes.
Impact across asset classes:
Stocks: Fault lines in the AI financing chain continue to widen. CoreWeave’s 5-year CDS briefly topped 1,140 basis points, with the market pricing in a more than 60% probability of default within five years. After Jensen Huang publicly backed the company, its shares reversed course from a drop of more than 8% to close up 5.94%. Money flowed from semiconductors into healthcare and consumer stocks: Eli Lilly led pharmaceutical stocks with a gain of more than 3%, while Nike rose more than 5%.
Bonds: Spreads on AI-related bonds continue to widen, and the yield on CoreWeave bonds due in 2031 surged to 15.78%. Oracle’s CDS rose to 288 basis points. If its rating falls below BBB, investment-grade funds will be forced to liquidate their holdings.
Crypto and precious metals: Circle gained more than 9%, and Coinbase rose more than 6%. Gold rebounded to $4,155 as risk aversion took hold.
Stocks can rebound on a single line of reassurance; bonds can’t. CoreWeave shares rebounded on the same day its credit spreads widened—the fault line between the AI narrative and financial reality is being priced in by the bond market. #AI和半导体股本周市值损失超1万亿美元 #美国9月PPI年率升至6.3%