Wall Street mixed as chip stocks extend their rout into an eighth week

what happened

US stock indexes traded mixed on Friday: the Dow was rising, while the Nasdaq and the S&P 500 were headed for weekly losses. According to TradingView, the chip index was down 9.7% on the week and on track for an eighth consecutive decline. Investors are digesting a batch of hot inflation data and worrying about the large debt taken on to fund data center construction.

Banks, homebuilders and aerospace and defense stocks led the sectors. Of the 45 S&P 500 companies that had reported third-quarter results, 84% beat street estimates. According to LSEG data, analysts expect aggregate S&P 500 earnings growth of 30.7% year on year, with energy at 128.3% and tech at 66.5%.

The Labor Department published its import and export prices report, which showed energy price pressures spilling into core inflation. Fed chair Kevin Warsh was optimistic about US economic resilience and called inflation a “common challenge.” Unlike his Fed colleagues, however, he gave no clues about the central bank's path on possible monetary tightening.

why it matters

The key point for markets is that energy price pressures are feeding into core inflation while uncertainty about Fed rate policy remains. Weakness in chips weighs on the whole tech segment, while banks and defense companies are holding up better in this environment.

market impact

US stocks: chip weakness pressures the Nasdaq, while banks and defense shares are holding up better

instruments