S&P 500 Flat as Investors Pull Back From Risky AI Stocks
The S&P 500 hovered near zero as money rotated into healthcare and consumer names, while AI stocks with heavy debt came under pressure from rates.
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what happened
The S&P 500 was roughly flat on Thursday, recovering from an earlier decline. Reuters reports that investors worried about AI-linked companies moved into Eli Lilly, UnitedHealth and other healthcare and consumer shares. Technology stocks were mixed, as traders examined whether heavy debt leaves AI firms exposed to higher interest rates.
Eli Lilly rose 4.6%, UnitedHealth gained 3.6% and Walmart climbed 2% after Deutsche Bank upgraded their ratings. Dell Technologies fell more than 8% and Hewlett Packard Enterprise lost 5.8%. Yields on 10-year Treasuries eased but stayed near multiyear highs, as worries about inflation linked to expensive oil persisted. The Philadelphia semiconductor index dropped about 2.5%.
why it matters
Higher Treasury yields and rising odds of a Federal Reserve rate hike by December, which CME FedWatch puts at 67%, raise financing costs and weigh on capital-hungry AI projects. The shift toward defensive sectors suggests investors are doubting how long tech earnings growth can last.
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prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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