The S&P 500 and Nasdaq closed lower Thursday as losses in major semiconductor companies outweighed gains across most of the market, while rising oil prices and volatile Treasury yields heightened concerns about inflation and borrowing costs.
By yourNEWS Media Newsroom
NEW YORK — Wall Street ended Thursday’s trading session with mixed results as a selloff in technology and semiconductor stocks pulled the S&P 500 and Nasdaq lower, despite gains across approximately two-thirds of the companies in the benchmark index.
The S&P 500 declined 0.5% on Oct. 8, marking its second consecutive loss after reaching a record high earlier in the week. The technology-heavy Nasdaq composite dropped 1.3%, while the Dow Jones Industrial Average finished slightly higher after fluctuating between positive and negative territory throughout the session.
The divergence reflected the substantial influence of large technology companies on major stock indexes. Although most S&P 500 constituents advanced, losses among highly valued semiconductor manufacturers and artificial intelligence-related businesses were large enough to outweigh gains elsewhere.
According to The Associated Press’ report on Thursday’s market activity, the declines unfolded alongside sharp fluctuations in the Treasury bond market and another significant increase in crude oil prices.
The S&P 500 closed at 7,765.36, down 36.41 points. The Nasdaq composite fell 345.35 points to 27,193.34, while the Dow gained 51.77 points to finish at 51,231.64.
The Russell 2000 index, which tracks smaller publicly traded American companies, finished with a marginal gain of less than 0.1%.
The results illustrated how concentrated market leadership has become among technology companies benefiting from the expansion of artificial intelligence.
When shares of those companies decline sharply, their substantial market capitalizations can drag down major indexes even if most other businesses perform well.
Nvidia, the semiconductor manufacturer that has become a central supplier of computing equipment for advanced artificial intelligence systems, was among Thursday’s largest sources of downward pressure.
Its shares declined approximately 3%, making it the single largest negative contributor to the S&P 500.
Nvidia’s market capitalization gives it an unusually large influence over the performance of the index, which weights companies according to their market value.
Other major semiconductor stocks also retreated.
Broadcom fell more than 4%, while Micron Technology declined nearly 5%.
Taiwan Semiconductor Manufacturing Co., one of the world’s largest contract chip manufacturers, lost approximately 3% in U.S. trading despite reporting substantial growth in September revenue.
The company serves major technology customers and manufactures advanced processors used in smartphones, data centers and artificial intelligence applications.
Its financial results are closely monitored as an indicator of demand across the semiconductor industry.
Strong sales growth would ordinarily be considered encouraging, but investors have increasingly demanded exceptional performance from companies whose share prices have risen substantially.
The latest declines suggest that market expectations have become difficult to satisfy, even when companies continue reporting significant business expansion.
The technology selloff also followed reports raising questions about whether the revenue generated by artificial intelligence developers is keeping pace with the enormous investment required to build computing infrastructure.
According to Reuters’ account of Thursday’s trading, investors reacted to a Financial Times report concerning OpenAI’s revenue and financing requirements.
The report contributed to concerns about the relationship between artificial intelligence spending and the eventual returns available to companies supplying processors, data centers and related services.
Technology companies have committed hundreds of billions of dollars to developing infrastructure for increasingly powerful artificial intelligence systems.
That spending has supported demand for advanced semiconductors, networking equipment, electricity and specialized data center facilities.
However, the rapid appreciation of AI-related stocks has also left investors sensitive to indications that commercial revenue may develop more slowly than anticipated.
The possibility of lower-than-expected returns has become a major concern because valuations for several semiconductor companies assume substantial continued growth.
The sector’s weakness was evident beyond the United States.
In South Korea, Samsung Electronics shares declined 2.4%, contributing to a 2.6% drop in the country’s benchmark Kospi index.
The decline occurred despite Samsung announcing preliminary operating profit of approximately 107.4 trillion South Korean won, equivalent to roughly $80 billion, for the latest quarter.
That represented a substantial increase from approximately 12.17 trillion won a year earlier.
The increase reflected strong demand for memory chips and other semiconductor products used in advanced computing systems.
However, the result fell slightly below analysts’ elevated expectations.
Samsung’s performance illustrated the pressure facing chip manufacturers as investors weigh the industry’s rapid earnings growth against already substantial stock price gains.
Elsewhere in Asia and Europe, major stock indexes generally declined as rising energy costs and concerns about borrowing rates affected investor sentiment.
Although technology shares were responsible for much of Wall Street’s weakness, oil markets provided another significant source of uncertainty.
Brent crude, the international benchmark, rose more than 4% Thursday to finish above $104 per barrel.
The increase followed renewed concerns about supply disruptions associated with the conflict involving Iran and instability affecting energy transportation through the Persian Gulf.
Brent prices have fluctuated between approximately $96 and $110 per barrel during the past month, reflecting uncertainty about the duration of the conflict and the conditions necessary for normal shipping and petroleum production to resume.
Thursday’s session demonstrated how quickly prices can respond to political developments.
Crude approached $106 per barrel during morning trading before retreating following comments from President Donald Trump concerning negotiations with Iran.
The president announced that Washington was engaged in “productive discussions” with Tehran and that American forces would not conduct additional military attacks against Iran before the Nov. 3 midterm elections.
His statement briefly reduced concerns about an immediate escalation of hostilities.
Oil prices subsequently declined toward $103 per barrel before reversing course and rising again later in the session.
The rebound reflected continuing uncertainty about shipping conditions, the status of Iranian petroleum exports and the broader regional conflict.
The United States has maintained restrictions on Iranian oil shipments while seeking to ensure that other commercial energy cargoes can pass through the Strait of Hormuz.
The waterway is an important route for petroleum exports from the Persian Gulf, making interruptions to shipping a major concern for global energy markets.
Higher crude prices can increase transportation and production expenses for businesses while contributing to higher gasoline and diesel prices for consumers.
Those effects have become particularly important as the Federal Reserve attempts to contain inflation.
Energy prices can also influence expectations about future inflation, which in turn affect government bond yields and borrowing costs.
The latest increase in petroleum prices came as Hurricane Isaias approached the northern Gulf Coast, prompting substantial precautionary shutdowns of offshore American oil production.
Energy companies evacuated workers from platforms and temporarily suspended operations as the storm moved toward the coastline.
The production reductions added another potential source of supply disruption at a time when global oil markets were already experiencing volatility.
Investors also monitored the possibility that the hurricane could affect coastal refineries, pipelines and other energy infrastructure.
Damage to those facilities could extend disruptions beyond the storm’s passage.
The combined effects of the Iran conflict and the hurricane have complicated efforts to assess future petroleum supply and inflation trends.
Treasury bond markets experienced similarly pronounced fluctuations Thursday.
The yield on the benchmark 10-year Treasury note rose from approximately 5.28% late Wednesday to 5.35% early Thursday.
The increase placed the yield near its highest level in more than two decades.
Higher Treasury yields can raise financing costs throughout the economy because government securities serve as important reference points for mortgage rates, corporate borrowing and other forms of credit.
As borrowing costs increase, businesses and households may become more cautious about investment and spending.
That possibility can place additional pressure on stock valuations, particularly for companies whose prices depend heavily on expectations of future earnings growth.
However, the bond market’s direction changed substantially later Thursday.
The 10-year Treasury yield declined to approximately 5.23% after the federal government completed a $22 billion auction of 30-year Treasury securities.
The auction attracted sufficient investor demand to ease concerns about the market’s ability to absorb additional government debt.
The newly issued 30-year bonds carried a high yield of 5.618%.
Following the auction, the yield on existing 30-year Treasury securities declined from approximately 5.73% earlier in the session to 5.61%.
The movement was notable because Treasury yields generally fluctuate in much smaller increments during ordinary trading sessions.
Bond yields move inversely to prices, meaning stronger demand for Treasury securities can push their prices higher and yields lower.
The successful auction indicated that investors were willing to purchase long-term U.S. government debt at prevailing interest rates despite concerns about inflation and federal borrowing.
A similar pattern occurred Wednesday, when demand during an auction of 10-year Treasury notes helped reduce yields.
Tony Miano, global investment strategy analyst at Wells Fargo Investment Institute, said higher yields were beginning to attract buyers.
“Higher U.S. Treasury yields are starting to create their own demand, buyers are showing up for the right price,” Miano said.
The observation highlights an important factor in government bond markets.
As yields rise, Treasury securities may become more attractive to investors seeking income, particularly when the returns compare favorably with other relatively low-risk investments.
That additional demand can help stabilize prices and reduce yields, although the effect depends on broader economic conditions and expectations.
The latest auctions were closely watched because the federal government continues borrowing substantial amounts of money to finance annual budget deficits.
The Congressional Budget Office reported this week that the federal deficit reached approximately $1.993 trillion during fiscal 2026, increasing from the previous year.
The government’s substantial borrowing requirements have become a concern for investors evaluating the supply of Treasury securities expected to enter the market.
Inflation expectations and Federal Reserve policy are also influencing demand for government debt.
The Federal Reserve raised its benchmark interest rate by a quarter percentage point in September, seeking to address continued inflationary pressure.
Additional rate increases remain possible if policymakers determine that price growth is not slowing sufficiently.
Higher policy rates can make short-term investments more attractive and influence yields throughout the Treasury market.
Investors are therefore monitoring inflation, labor market conditions and economic growth as they assess the likely course of monetary policy.
The relationship between Treasury yields and technology stock valuations is particularly important.
Many fast-growing technology companies are valued partly on expectations that they will generate substantial profits many years into the future.
When interest rates rise, the present value of those expected future earnings can decline, potentially placing pressure on share prices.
Conversely, falling yields can improve investor sentiment by reducing some of the financial pressure associated with higher borrowing costs.
Thursday’s afternoon retreat in Treasury yields helped support gains across much of the stock market.
Approximately two-thirds of S&P 500 companies finished higher, demonstrating that investor demand remained resilient outside the technology sector.
Consumer products company PepsiCo was among the strongest performers.
Its shares advanced approximately 3.7% after the company reported quarterly revenue and profit that exceeded Wall Street expectations.
The results benefited partly from stronger business performance outside North America.
PepsiCo has continued adjusting its operations in response to changing consumer demand, including efforts to control costs and improve performance in its beverage and snack businesses.
The company also revised its full-year outlook, reflecting ongoing challenges in parts of its North American business.
Despite those concerns, investors responded favorably to the quarterly results.
The gain provided some support to the broader market, although it was insufficient to offset losses among the largest technology companies.
The contrasting performance between PepsiCo and semiconductor manufacturers illustrated the different expectations investors have established for individual industries.
Companies that have experienced relatively modest stock performance may attract buyers when earnings exceed forecasts.
By comparison, companies whose valuations have risen dramatically can suffer substantial declines if results or projections fail to meet exceptionally high expectations.
That difference has become particularly pronounced in the artificial intelligence sector.
Semiconductor manufacturers and computing infrastructure companies have benefited from extraordinary demand as businesses build systems capable of training and operating advanced AI models.
Their share prices have reflected expectations that spending will remain elevated for years.
However, investors are increasingly examining whether developers and businesses using artificial intelligence can generate sufficient revenue to justify those investments.
The financial results of major technology companies during the upcoming earnings season will provide additional information about infrastructure spending, customer demand and profit margins.
Investors will be watching closely for evidence that AI investment continues translating into sustainable commercial growth.
The market’s recent declines have also occurred after substantial gains earlier in the year.
According to the Associated Press’ summary of major U.S. indexes, the Nasdaq remained approximately 17% higher for 2026 despite Thursday’s losses.
The S&P 500 was up approximately 13.4% for the year, while the Dow had gained about 6.6%.
Those increases provide context for the recent retreat, which followed record-setting performances in several major indexes.
The losses do not necessarily indicate a broader economic downturn, but they demonstrate the sensitivity of financial markets to changing expectations concerning corporate earnings, interest rates and energy supplies.
Other developments are also influencing investor decisions.
The labor market has continued showing relatively low levels of layoffs, with weekly applications for unemployment benefits falling to 197,000.
That figure indicates that employers remain reluctant to eliminate existing positions despite slower hiring.
A stable labor market can support consumer spending and corporate revenue, but it may also reduce pressure on the Federal Reserve to lower interest rates.
Inflation remains another central concern.
Higher energy prices can affect production, transportation and household expenses, potentially complicating the central bank’s efforts to bring inflation toward its 2% target.
Investors are therefore balancing evidence of economic resilience against the financial consequences of elevated borrowing costs and rising commodity prices.
Thursday’s trading demonstrated those competing forces.
Early concerns about crude oil and interest rates pushed major indexes lower.
A successful Treasury auction subsequently helped reduce yields and encouraged buying across most sectors.
However, the rebound failed to lift the S&P 500 into positive territory because of the pronounced weakness among semiconductor manufacturers and other major technology companies.
The Dow managed a small gain, reflecting its different composition and lower concentration in the largest AI-related businesses.
The Nasdaq experienced the steepest decline because technology companies account for a substantial portion of the index.
International markets also reflected concerns about technology valuations and the inflationary consequences of higher oil prices.
South Korea’s Kospi suffered one of the day’s larger declines, while several European indexes finished lower.
Samsung’s retreat following a substantial earnings increase demonstrated that the pressure on semiconductor valuations extended beyond American markets.
The coming days will bring additional developments that could influence market direction.
Investors will monitor the impact of Hurricane Isaias on American energy infrastructure, the course of negotiations involving Iran and the latest corporate earnings reports.
Further economic data could also affect expectations for the Federal Reserve’s next interest rate decision.
For now, Thursday’s market activity illustrates a divergence between broad stock market participation and the performance of the largest technology companies.
Most S&P 500 constituents advanced, but their gains were outweighed by declines among heavily weighted semiconductor and artificial intelligence businesses.
The S&P 500 and Nasdaq consequently extended their retreat from recent highs, while the Dow finished with a modest increase.
At the same time, oil prices remained elevated and Treasury yields experienced substantial reversals as investors responded to geopolitical developments, inflation concerns and demand for federal government debt.
The combination left financial markets unsettled despite evidence that investors remain willing to purchase stocks and bonds at prices they consider attractive.
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