A rout in memory-chip stocks and two hot inflation reports pulled the Nasdaq lower this week, while a rotation into blue chips and bonds lifted the Dow Jones Industrial Average to a one-month high.
Memory makers took the hardest blow.
By Friday morning, Micron Technology Inc. was on track for a loss of about 13% on the week and SanDisk Corp. about 15%.
The Philadelphia Semiconductor Index logged seven straight losses through Thursday, even after Taiwan Semiconductor reported 51% revenue growth. Nvidia Corp. was down about 5%.
Meanwhile, South Korea’s stock index logged its worst week since the Lehman Brothers’ fallout in September 2008.
CoreWeave showed where the stress sits.
The AI cloud provider plunged 15.5% on Wednesday as the cost of insuring
its debt reached a record, and its 9% notes fell to about 80 cents on the dollar, a yield above 15%. The stock was down roughly 22% on the week.
Inflation adds to rate fears
Consumer prices rose 0.6% in September and 3.7% from a year earlier, above the 3.6% expected, as gasoline jumped 9.1%. Wholesale prices climbed 1.3% against a 0.5% forecast, lifting the annual rate to 6.3%, a four-year high.
Odds of a Fed rate hike at the Oct. 27-28 meeting jumped from about 22% to near 50% after the CPI report, then fell to roughly 17% by Friday as Fed Chair Kevin Warsh gave no signal in Bangkok.
“I don’t prejudge meetings,” he said.
Bonds became the refuge. The 10-year Treasury yield fell to about 5.10% after Thursday’s biggest one-day drop since June. The 30-year eased to 5.43% from 5.73%.
By midday on Friday, Oct. 16, the Nasdaq 100 was down about 3.8% on the week and the S&P 500 about 0.8%, while the Dow Jones Industrial Average was up about 1.4%.
Fuel hit Michigan hardest
AAA put the state average for regular gasoline at $4.58 a gallon on Thursday, up 18 cents in a week and $1.72 from a year ago, only 64 cents below the June 2022 record of $5.22. Diesel averaged $6.48.
“Fuel prices remain highly sensitive to volatility in the global oil market,” AAA-The Auto Club Group spokesperson Adrienne Woodland said Monday.
Through Thursday’s close, Ford Motor Co. and General Motors Co. each gained about 1% on the week, while Stellantis N.V. fell about 3% after third-quarter shipments slipped 1%.
Benzinga is a financial news and data company headquartered in Detroit
This article originally appeared on Detroit Free Press: Memory-chip rout, inflation, CoreWeave: The week on Wall Street
