Hot Inflation Sinks the Nasdaq; CoreWeave, Oracle and Dell Slide as Health Care Rallies

It's Wednesday, October fourteenth. This is Trade and Ticker, the lunch report. Here's your midday check on U.S. stocks.

Three things still matter into the afternoon. First, a hotter-than-expected inflation report that has put a Fed rate hike back on the table for later this month. Second, tech and chip stocks are taking the biggest hit, along with the companies that finance and build A-I data centers. Third, round two of bank earnings, where Bank of America is sliding after a big federal penalty.

Here's the picture at midday. Stocks are lower, and the Nasdaq is leading the way down. As of about one o'clock Eastern, the Dow is down about a quarter of a percent, or roughly one hundred forty points. The S-and-P is down about one percent, and the Nasdaq is down about one and a half percent. Small companies are having a rough day too, with the Russell two thousand down nearly two percent. Healthcare is the bright spot, up about two percent, and consumer staples are higher as well. Technology is the weakest group, down more than two percent.

Start with inflation. Consumer prices rose six-tenths of a percent in September and three-point-seven percent from a year ago, up from three-point-four percent in August. Gasoline jumped about nine percent in the month and drove more than half of that gain. The bigger worry is core inflation, which strips out food and energy. It rose three-tenths of a percent for a second straight month, above the two-tenths economists expected, and it is now up two-point-six percent from a year ago. Shelter, used cars, airfares, and apparel all moved higher. After the report, traders moved to close to even odds that the Fed raises rates at its meeting on October twenty-eighth, up from about one in five before the numbers came out. The ten-year Treasury yield jumped above five-point-three percent right after the report, then eased back and is now near five-point-two-four percent, a little higher on the day. The two-year yield is up more, near four-point-eight-five percent. The dollar is stronger, and gold is down almost two percent.

Now tech. The Philadelphia semiconductor index is down about three percent. A-M-D is down about five percent, Intel is down about three, and Nvidia and Broadcom are each down about two and a half percent. Taiwan Semiconductor is down nearly three percent, a day before it reports. The steepest drops are in the A-I infrastructure trade. CoreWeave is down about fourteen percent after the yield on some of its bonds touched about fifteen percent, a sign lenders are getting nervous about the cost of the data center buildout. Oracle is down about seven percent. Dell is down about eleven percent and Hewlett Packard Enterprise is down about seven, after Barclays downgraded both. Rate-sensitive financial technology names are under pressure too, with Affirm down about ten percent and SoFi and Robinhood each down more than seven.

The banks are mixed. Bank of America is down about five percent, after its profit fell on a one-point-two billion dollar penalty over anti-money-laundering and sanctions violations. It was down more than seven percent early in the session. Morgan Stanley is down about three percent despite its earnings beat. State Street is down more than six percent after its revenue came in light, and Progressive is down more than six percent after its profit missed forecasts. BlackRock gave back most of a three percent morning gain and is up only slightly. JPMorgan is up nearly one percent.

Buyers are heading for the safer corners. Eli Lilly and Merck are each up nearly four percent, AbbVie is up about three and a half, and UnitedHealth and Amgen are up nearly three. Johnson and Johnson is up about one and a half percent after Tuesday's drop. Apple is also higher, up nearly one percent.

Oil keeps climbing. Brent crude is up nearly one percent, near one hundred six dollars and sixty cents a barrel, and U.S. crude is up nearly two percent, near ninety-five dollars and eighty-five cents.

After the close today, there are no major earnings, just a few smaller regional banks. The Fed releases its Beige Book this afternoon, a survey of business conditions around the country. The bigger test comes tomorrow. Taiwan Semiconductor reports before the U.S. open, a key read on A-I chip demand after a rough stretch for chip stocks. And tomorrow morning brings producer prices and retail sales, two more checks on inflation and the consumer.

Watch three things into the close. First, whether bond yields stay below this morning's highs, because that has given stocks some room. Second, whether the selling in CoreWeave and Oracle spreads further into the big A-I names. Third, whether healthcare and the other safer groups keep holding the Dow close to flat.

That's the midday picture. We'll be back this evening with a company deep dive on the day's biggest stories, including what the inflation report means for the Fed and why Bank of America is sliding. Thanks for listening. I'm Trade and Ticker.