U.S. stock market - S&P 500 remains flat as traders pull out of high-risk AI investments
Update: Afternoon market session
Noel Randewich/Sruthi Shankar
Reuters, Oct 15 - On Thursday, the S&P 500 Index was nearly flat, rebounding from early losses as investors concerned about artificial intelligence stocks rotated into Eli Lilly, UnitedHealth, and other healthcare and consumer stocks.
Technology stocks were mixed, as investors closely watched AI-related companies with heavier debt burdens that are more susceptible to rising interest rates.
After a rating upgrade by Deutsche Bank, pharmaceutical company Eli Lilly LLY.N rose 4.6%, UnitedHealth Group UNH.N gained 3.6%, and Walmart WMT.N climbed 2%. These three companies were the main contributors to the S&P 500's modest gains for the day.
Although chipmaker TSMC 2330.TW reported record profits for the sixth consecutive quarter driven by strong AI demand, its cautious outlook for 2027 (link) weighed on Broadcom AVGO.O and Nvidia NVDA.O, with both stocks falling more than 1%.
Dell Technologies DELL.N dropped more than 8% and Hewlett Packard Enterprise HPE.N fell 5.8%. Both server manufacturers extended the previous session's heavy losses, reflecting concerns about AI companies impacted by higher borrowing costs.
Seven of the 11 S&P 500 sector indices rose, led by healthcare .SPXHC, which increased 2.36%, followed by the materials sector .SPLRCM up 1.42%.
The 10-year Treasury yield retreated slightly but remained near multi-year highs as investors worried about inflation sparked by high oil prices.
“Whether it’s new single-family homes or large data centers, the financing cost for everything is rising, and that will impact many areas of the stock market,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “The stocks performing best today are non-cyclical, defensive companies.”
The Philadelphia Semiconductor Index .SOX slid about 2.5% and was on track for a seventh consecutive session of declines.
The latest S&P 500 reading was 7,720.35 points, up 0.02%.
The Nasdaq Index fell 0.43% to 26,577.25, while the Dow Jones Industrial Average rose 0.88% to 52,074.56.
After hitting a record high last week, the S&P 500 remains up nearly 13% so far in 2026, with much of those gains driven by AI-related stocks.
The S&P 500 currently trades at about 19 times earnings, near its lowest level since 2023. Ellerbroek said the index's relatively low price-to-earnings ratio suggests investors have already priced in the eventual end of massive profit growth driven by AI giants.
Data published Thursday showed that due to rising costs for goods and services, U.S. producer prices in September (link) posted their largest gain in four and a half years, indicating that inflation pressures have broadened beyond energy products.
Consumer inflation data released Wednesday (link) was higher than expected, fueling speculation of further Federal Reserve rate hikes and causing a sell-off on Wall Street.
According to CME’s FedWatch tool, interest rate traders currently see a 67% likelihood of a Fed rate hike at the December policy meeting, up from 62% on Wednesday.
Space company Rocket Lab (link) RKLB.O saw its shares drop 10% after announcing that the first launch of its new, larger “Neutron” rocket would be delayed until next year.
Agricultural chemicals company FMC FMC.N plunged 34% after sharply lowering (link) its Q3 performance forecast.
Among S&P 500 .AD.SPX constituents, advancers outnumbered decliners by a 2.6:1 ratio.
In the S&P 500 Index, 24 stocks hit new highs with none at new lows; on the Nasdaq, 57 stocks made new highs while 368 hit new lows.
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