Market Wrap
Published
The S&P 500 (SPY) climbed 1.6%, powered by a broad semiconductor and AI-linked rally that overwhelmed a sharp drop in oil prices and hawkish comments from a Fed official.
Fed Vice Chair Musalem said further rate hikes are likely needed, warning that without more policy restraint inflation could stay well above 2% eighteen months out, and flagged that the commodity shock has spread beyond oil into metals like copper. Chicago Fed's Goolsbee took a softer line, saying he does not view a possible hike as unwinding last year's cuts. Crude tumbled even as tensions around the Strait of Hormuz persisted, with WTI settling at $95.78, down 4.5%, and Brent dropping below $100 for the first time since September 9, even as Saudi Aramco kept loading tankers through the strait. Diesel prices nonetheless hit a record above $6.50 a gallon. On trade, USTR Greer said a three to six month extension of the US-China truce is possible ahead of Thursday's Trump-Xi summit, while noting there is no "grand bargain" on the table.
Technology led every sector, with XLK up 2.8% and the semiconductor complex surging (SOXX +5.3%, SMH +4.3%). Energy was the weakest group, with XLE down 2.9% as crude's slide dragged refiners and producers lower. Consumer Staples and Utilities also lagged, each off 1.1%, as investors rotated out of defensives and into growth.
Company News
- Meta Platforms jumped 12.5%, the top performer among mega-cap names, as the AI trade broadened.
- AMD rose 9.9% and crossed $1 trillion in market capitalization for the first time, with Intel up 12.1% and Qualcomm up 9.3% also riding the chip rally.
- Warner Bros. Discovery gained 10.8% after Paramount settled antitrust litigation with a coalition of state attorneys general, clearing a key obstacle to their merger; California's AG stressed the settlement is not an endorsement of the deal.
- Arm Holdings rose 16.8%, Astera Labs 12.5%, Rambus 11.5%, and Strategy 9.4% among the day's broader gainers.
- HP fell 4.2% after flagging that industry-wide PC unit volumes could decline in the mid-single digits in 2027.
- UPS dropped 4.3% and CF Industries fell 3.7%, among the session's steepest laggards.
- Novo Nordisk's ADRs fell sharply after its CFO said the company aims only to keep operating margin broadly stable through 2030.
- A communications failure at a Philadelphia FAA facility triggered ground stops at JFK, LaGuardia, Newark and Boston, though airline shares still advanced with the broader market.
Gold fell more than 1% to $4,325.49 an ounce as the hawkish Fed tone and elevated rate expectations weighed on the metal.