Chip Stocks Steady as Oil Climbs and the Dow Falls

NEW YORK, Oct. 23 — FridayFriday split the stock market: chip stocks steadied after Thursday’s rout, while most other stocks fell “under pressure from rising oil prices,” as AP put it, with Brent crude at its highest since April 29, Reuters reported. The PHLX Semiconductor index rose 0.44 percent, to 10,779.46. The Dow Jones industrial average fell 652.82 points, or 1.23 percent, to 52,215.16, and nearly three of every four stocks in the S&P 500 fell, AP reported.

The bounce did not save the week: the chip index fell 3.21 percent from the Oct. 16 close, its third weekly loss in a row, and ended 26.34 percent below its record close of June 22.The Chip IndexThe PHLX Semiconductor index, or SOX, fell 4.30 percent in the week to Oct. 9 and 11.41 percent in the week to Oct. 16. Even so, it closed Friday up 52.18 percent for the year.

For the AI trade, Friday was a pause rather than an answer. Investors appear “increasingly focused on the economics of AI, particularly the substantial upfront costs required to build AI infrastructure,” Angelo Kourkafas, senior global strategist at Edward Jones, wrote in a research note quoted by AP. Many of the companies riding the boom “have been borrowing to fund investments in AI technology and high interest rates are making those loans more expensive,” AP reported. Next week brings the spenders’ own figures and a decision on interest rates.

The chip index was up as much as 1.78 percent during the session before giving back most of the gain. Micron rose 2.46 percent, AMD 1.74 percent, Intel 1.72 percent and TSMC’s American shares 1.49 percent. Nvidia fell 0.59 percent, to $210.96, and Broadcom 0.48 percent; KLA, which makes equipment for chipmakers, fell 1.50 percent, and Lam Research closed virtually unchanged.NVDANasdaq204.64▼9.02−4.2%Nvidia · Friday’s session

Microsoft rose 0.66 percent. Meta, “the center of Thursday’s storm,” as Reuters put it, fell 0.96 percent, and Alphabet 1.24 percent. Bloom Energy and Comfort Systems, which power and equip data centers, fell 11.24 and 9.26 percent; both “fell hard for a second straight day,” Yahoo Finance noted, after reporting their quarters on Thursday.

Brent crude settled at $116.72 a barrel, up $3.55, or 3.14 percent, after Houthi attacks in Saudi Arabia, Reuters reported; it rose 6 percent on the week. AP wrote that the U.S. war with Iran “has severely cut the world’s oil supply,” and that rising oil prices “weighed heavily on the market.” The S&P 500’s energy sector rose 2.5 percent, to a record, Reuters reported. Exxon Mobil, Chevron and ConocoPhillips traded at all-time highs, CNBC reported, while uranium and nuclear funds fell to 52-week lows.

The S&P 500 fell 0.52 percent, to 7,623.68, and the Nasdaq Composite 0.21 percent, to 25,955.34, after giving up a modest gain, AP reported. Not every loss was oil’s: American Express fell 3.7 percent after its quarterly results, Reuters reported.

The 10-year Treasury yield rose to 5.00 percent, by the Treasury’s daily figures, from 4.96 percent on Thursday; Reuters put the market yield at 4.99 percent. Chris Rupkey, chief economist at Fwdbonds, said rising oil was the day’s only consistent storyline. “This means more or less that more inflation is on the way, so bond yields are adjusting higher to account for this energy price surge,” he said, as quoted by CNBC.

The Week

The S&P 500 fell 0.47 percent on the week, its second weekly loss in a row, and the Nasdaq Composite 0.71 percent, also its second. The Dow rose 0.41 percent, “notching its third straight weekly gain,” Reuters reported.

Of the big platforms, Meta fell 9.40 percent on the week and Alphabet 5.98 percent; Microsoft and Amazon each fell less than 1 percent.METANasdaq614.99▼9.53−1.5%Meta Platforms · Friday’s session Investors “were disappointed by quarterly reports from Meta and Lam Research,” Reuters reported. The chip-equipment makers Lam Research and KLA fell 12.82 and 12.15 percent, and Nvidia 1.48 percent, while TSMC’s American shares rose 1.43 percent and Apple 1.24 percent. Among the companies that equip and power data centers, Comfort Systems lost 19.33 percent on the week, Bloom Energy 12.66 percent and GE Vernova 11.53 percent.

Next Week

Next week about one-third of S&P 500 companies report, among them Microsoft and Alphabet on Wednesday and Amazon on Thursday, “three AI hyperscalers whose capital spending forecasts will be closely watched on Wall Street,” Reuters reported.MSFTNasdaq521.91▼8.23−1.6%Microsoft · Friday’s session “The market’s just not giving the benefit of the doubt to companies that are spending a ton of money on building this all out, which to us is actually very healthy, but still does augur for some short-term pain,” Nick Giorgi, chief equity strategist at Alpine Macro, said, as quoted by Reuters.

Chip and storage companies report, too: Seagate on Tuesday and KLA on Wednesday, both after the market closes; SK hynix on Wednesday in Seoul; and Intel on Thursday after the close.

The Federal Reserve announces its rate decision on Wednesday, after raising rates in September for the first time since 2023.The September RiseOn Sept. 16 the Federal Open Market Committee voted 12–0 to raise its target range for the federal funds rate a quarter point, to 3.75 to 4 percent. “Productivity growth is strong, and capital investment is robust,” its statement said. “Inflation remains elevated.” The market isn’t expecting a change this time, CNBC reported, but is pricing in a roughly 71 percent probability of a quarter-point rise in December, according to the CME Group’s FedWatch tool. Kevin Warsh, the Fed’s chairman, holds a press conference after the decision.

On Thursday at 8:30 a.m. Eastern, the Bureau of Economic Analysis publishes its advance estimate of third-quarter growth and September’s personal income and outlays, which carry what AP calls the Fed’s preferred measure of inflation.

Investors are also waiting on Anthropic. Reuters reported on Friday that the AI lab “is expected to publish its IPO prospectus in coming days.” None had been filed publicly on the Securities and Exchange Commission’s EDGAR system by 5:37 a.m. Eastern on Saturday.