Wall Street closed out the week ending Sept. 25 riding a semiconductor rebound that pushed the AI infrastructure trade back into favor, even as a spike in Treasury yields put the rally's staying power to the test.
Global semiconductor company AMD supplied the week's biggest milestone. Shares surged as much as 10% on Monday, pushing the company past a $1 trillion market capitalization for the first time and capping a five-session winning streak fueled by renewed demand for AI chips. The stock has very nearly tripled since the start of the year.
Meta Platforms also posted double-digit weekly gains after its new Muse AI agent became the top free app on Apple's App Store, outpacing ChatGPT's early download pace. JPMorgan analyst Doug Anmuth wrote
that Muse “has the potential to become the most widely used consumer AI application since ChatGPT.”
The rally hit a wall Wednesday, when the S&P Global Flash Composite Purchasing Managers Index jumped to 58.4, the fastest U.S. business growth in over five years, but with input costs rising at their fastest clip in four years.
Bond traders read it as inflationary: The 10-year Treasury yield touched 5.1%, a first since 2007, and the 30-year hit 5.53%, its highest since 2004. Markets now price in a 68% chance of a Fed rate hike next month and 50% chance of an additional hike in December.
The mood was darker in Detroit.
A Cox Automotive forecastshowed Ford and General Motors losing more U.S. market share than any of the 13 automakers it tracks this year. High gas prices are pushing buyers toward hybrids.
Ford logged its third straight weekly decline, extending drops of 4% and 5% the two prior weeks. On Friday, a supply problem temporarily halted F-150 production at Ford's Dearborn Truck Plant.
Ford's sales were down about 10% through August, and F-Series sales were down 11%.
Stellantis fared worse. It slid about 6% on the week and is now down more than 55% this year after several analyst downgrades due to thin product pipeline and weak cash generation.
GM struck a calmer tone at the U.S. All Start Conference on Wednesday.
Executives said consumers remain resilient and delinquencies have not risen materially. They also said 2027 cash flow should be substantially better than this year's.
Between rising borrowing costs and a rough week for all three Detroit automakers, the AI trade's rebound looked like it was happening in a different economy entirely.
Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Why semiconductor company AMD and Meta (and its Muse) had a good week
