Nasdaq Futures Slide as AI Selloff Deepens; Producer Prices Jump, TSMC Cautious

Good morning. This is Trade and Ticker. Thursday, October fifteenth, twenty twenty-six. Your map into the open — futures, catalysts, and what could move the first hour.

Daily Catalysts. Four things to watch today. First, the A-I selloff, which is getting worse this morning, with Nasdaq futures down more than one percent. Second, Taiwan Semiconductor, which posted another record quarter but struck a careful tone about next year. Third, the economy, where a producer price report just came in much hotter than expected. Fourth, more bank earnings, from P-N-C, U.S. Bancorp, and Charles Schwab. We'll get into each of these as we go.

Let's start with U.S. futures. The board is split, and tech is taking the hit. As of about eight-twenty Eastern, just ahead of the morning's economic reports, Dow futures are up about a third of a percent, roughly one hundred seventy points. S-and-P futures are down about three-tenths of a percent. And Nasdaq futures are down about one and a quarter percent. The Nasdaq is leading the way down again, while the Dow holds up.

That follows a rough Wednesday. A hotter-than-expected inflation report put a Fed rate hike back in play, and the S-and-P and the Nasdaq had their biggest one-day drops since July. The S-and-P fell about one-point-one percent and the Nasdaq dropped almost one-point-nine percent. The Dow was nearly flat, held up by healthcare stocks. The Nasdaq is now down more than three percent from the record high it hit last week.

Bonds are moving the other way. Investors are buying Treasuries for safety, and the ten-year yield is down about a tenth of a percentage point, to just under five-point-one percent. Gold is up more than one percent. And oil is lower, with Brent crude down more than one percent, to just under one hundred five dollars a barrel.

In early trading, the pressure is all over the A-I trade. CoreWeave, the heavily borrowed A-I cloud company, is down about five percent after falling fifteen percent yesterday. Oracle is down about two percent after an almost nine percent drop. Micron is down about four and a half percent, Intel and A-M-D are down more than three percent, and Nvidia is down about one and a half percent. Rocket Lab is down about ten percent after it pushed the first launch of its new Neutron rocket into twenty twenty-seven. On the other side, Walmart is up more than two percent after Deutsche Bank upgraded it to buy. And Penske Automotive is up about eight percent after agreeing to be taken private by an entity owned by Penske Corporation and Mitsui, for two hundred twelve dollars a share in cash.

Now let's get into those four things to watch.

First, the A-I selloff. The worry is not that demand for A-I has disappeared. It's about money. With rates high and possibly going higher, investors are asking how the companies building data centers will pay for all of it, and what they should pay for that growth. CoreWeave and Oracle are at the center of that, after the yields on their bonds jumped to record highs on Wednesday. Good news isn't helping much. Anthropic, the A-I lab, reportedly told potential investors ahead of its stock market debut that third-quarter revenue jumped about forty-five percent from the prior quarter, to about sixteen-point-eight billion dollars. The stocks fell anyway.

Second, Taiwan Semiconductor, the world's biggest contract chipmaker, which makes chips for Nvidia, Apple, and many others. Its third-quarter profit rose about sixty-nine percent from a year ago, to about twenty-three-point-six billion dollars, beating forecasts. It was the company's sixth straight record quarter. Revenue was about forty-six-point-seven billion dollars, above its own forecast. For the fourth quarter, it expects revenue of fifty-two-point-three to fifty-four-point-three billion dollars. It now sees full-year revenue growing about forty-four percent, up from more than forty percent before, and it kept its spending plan for this year at sixty to sixty-four billion dollars. The company said A-I demand is extremely robust and still far ahead of its supply. But its chief executive said consumer and price-sensitive markets are being squeezed by rising component prices and economic uncertainty, and that the company is being prudent in its planning for twenty twenty-seven. Its U.S. shares are down about two and a half percent in early trading.

Third, the economy, and these numbers just came out. Producer prices, what businesses get paid for their goods and services, jumped one-point-three percent in September. Economists expected about six-tenths of a percent, and it's the biggest monthly jump since March of twenty twenty-two. Over the past year, producer prices are up six-point-three percent, the most since late twenty twenty-two. Energy did most of the damage. Energy prices at the producer level rose almost eleven percent in the month, and gasoline was up about twenty percent. But even leaving out food, energy, and trade margins, prices rose half a percent, up from three-tenths in August. Retail sales were stronger than expected too. Sales rose eight-tenths of a percent in September, against forecasts of about three-tenths, and August was revised up to one-point-three percent. Take out cars and gas, though, and sales rose only two-tenths of a percent. So higher gas prices did a lot of the work. Coming right after Wednesday's hot consumer price report, this adds to the case for another Fed rate hike. Before these reports, traders already saw better than a one-in-four chance of a hike at the Fed meeting at the end of this month.

Fourth, the banks. P-N-C earned four dollars and ninety-seven cents a share, or five dollars and nine cents on an adjusted basis. That is up from four dollars and thirty-five cents a year ago. Net interest income rose about fifteen percent from a year ago, but fee income fell from the second quarter, and the stock is down about two percent in early trading. U.S. Bancorp earned a dollar thirty-four a share, up about ten percent, with revenue up almost nine percent. Its stock is little changed. Charles Schwab had record revenue of about seven-point-two billion dollars, up seventeen percent, and adjusted earnings of a dollar sixty-nine a share topped forecasts. But revenue came in just a touch light, and the stock is down more than two percent.

Here's what would make a lower open worse. Watch three things. First, if this morning's hot producer price report pushes yields back up and wipes out the bond rally. Second, if the selling in CoreWeave and Oracle spreads further into the biggest tech names. Third, if chip stocks can't find their footing even after record results from Taiwan Semiconductor.

So here's the picture heading into the open. Nasdaq futures are down more than one percent, S-and-P futures are lower, and the Dow is a little higher. The A-I selloff is the story, and strong numbers from Taiwan Semiconductor and Anthropic haven't stopped it. Producer prices jumped far more than expected, and shoppers kept spending, with gas doing a lot of the work. Investors are moving into bonds and gold for safety. And the banks are mixed.

Quickly overseas. Asia had a brutal session for chip stocks. South Korea's Kospi fell more than seven percent, and Tokyo dropped about five percent. Europe is only a little lower.

We'll be back at lunch with how stocks are trading after the open and what still matters into the afternoon. Thanks for listening. I'm Trade and Ticker.