The S&P 500 Index ($SPX) (SPY) closed down -4.36% on Thursday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -3.44%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -6.36%. December E-mini S&P futures (ESZ26) fell -4.46%, and December E-mini Nasdaq futures (NQZ26) fell -6.51%.
US stock indices plummeted on Thursday, with the S&P 500 dropping to a 3-month low, the Dow Jones Industrials falling to a 3-week low, and the Nasdaq 100 slumping to a 6.5-month low. The selloff in chipmakers and AI stocks deepened on Thursday, pressuring the broader market amid speculation that the Democratic sweep of Congress will usher in a new era of regulation for the artificial-intelligence industry. The rotation out of chipmakers reflects a growing view that public opposition to data centers could crimp the growth of chipmakers and data-center suppliers. Also weighing on market sentiment on Thursday was a +2% increase in WTI crude oil prices.
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Hawkish comments on Thursday from Cleveland Fed President Beth Hammack were negative for stocks and bonds, as she said inflation has moved in the wrong direction since March and "I expect that monetary policy will need to move to a restrictive stance to bring inflation back to 2% in a timely manner."
Thursday’s US economic news was supportive of stocks. Weekly unemployment claims unexpectedly fell to a 3.5-month low, a sign of labor market strength, while Q3 nonfarm productivity rose more than expected and Q3 unit labor costs unexpectedly declined, positive inflation developments.
US weekly initial unemployment claims unexpectedly fell -6,000 to a 3.5-month low of 189,000, showing a stronger labor market than expectations of an increase to 196,000.
US Q3 nonfarm productivity rose 3.6%, better than expectations of 2.7%. Q3 unit labor costs unexpectedly fell -0.7%, weaker than expectations of a +0.4% increase.
Dec WTI crude oil prices (CLZ26) rose more than +2% Thursday after Ukraine launched a drone attack on Russia's 340,000 bpd Ryazan refinery, one of the country's largest. Ukraine has ramped up its attacks on Russian oil facilities over the past week, attacking five refineries and a major crude-pumping station, which could further curb global distillate supplies. Wednesday’s weekly EIA report showed US distillate inventories fell to a 23-year low. Additional gains in crude prices may be limited on speculation that Democrats retaking Congress in the US midterm elections could accelerate efforts to end the US-Iran war.
Stocks are supported by the prospect of solid quarterly earnings. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +31% from a year earlier, up from a July estimate of 22%. As of Thursday, 419 of the S&P 500 companies have reported results, with 84% beating estimates.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 fell from a 5-week high and closed down -0.55%. China’s Shanghai Composite rose to a 1-week high and closed up +0.10%. Japan's Nikkei-225 Stock Average closed down -1.79%.
Interest Rates
December 10-year T-notes (ZNZ6) closed up by +14 ticks on Thursday. The 10-year T-note yield fell -5.5 bp to 4.833%. Dec T-notes climbed to a 1.75-month high on Thursday, and the 10-year T-note yield fell to a 1.75-month low of 4.812%. Thursday’s stock sell-off boosted safe-haven demand for T-notes. Also, Thursday’s US Q3 nonfarm productivity report rose more than expected, and Q3 unit labor costs unexpectedly declined, positive developments for inflation. In addition, inflation expectations retreated after the 10-year breakeven inflation rate fell to a 3-month of 2.224% on Thursday, a bullish factor for T-notes. Finally, T-notes have carryover support on speculation that the Democratic sweep of Congress in the midterm elections led to a divided government that could reduce the risk of additional spending or tax cuts that would require more Treasury issuance.
T-note gains were limited on Thursday after weekly jobless claims unexpectedly fell to a 3.5-month low, a hawkish factor for Fed policy. Also, hawkish comments from Cleveland Fed President Beth Hammack weighed on T-notes when she said restrictive rates are needed to cool inflation. In addition, Thursday’s +2% increase in WTI crude oil prices is negative for inflation expectations and T-notes.
The markets are now pricing in a 68% chance of a +25 bp rate hike at the FOMC’s next meeting on December 8-9.
European government bond yields were mixed on Thursday. The 10-year German bund yield fell to a 2.25-month low of 3.233% and finished down -3.1 bp to 3.241%. The 10-year UK gilt yield rose from a 2.25-month low of 5.087% and finished up +0.2 bp to 5.132%.
Eurozone Sep PPI rose +11.1% y/y, stronger than expectations of +10.6% y/y and the largest pace of increase in 3.5 years.
German Sep factory orders rose +4.4% m/m, the largest increase in 6 months but slightly weaker than expectations of +4.5% m/m.
ECB Governing Council member Ante Zigman said, "Inflation has continued to rise in October, and we can say there's a rather big chance of an ECB interest rate increase in December."
The Bank of England (BOE), in an 8-1 vote, raised its benchmark interest rate by +25 bp to 4.00%, and BOE Governor Bailey said it's "unlikely" this will be the last BOE rate hike unless the Iran war is resolved.
The markets are now pricing in a 78% chance of a +25 bp rate hike at the ECB’s next policy meeting on December 17.
US Stock Movers
Chipmakers and AI-infrastructure stocks sold off sharply on Thursday amid fears that the Democrats’ sweep of Congress in the midterm elections will lead to tighter US data center regulation. The iShares Semiconductor ETF (SOXX) closed down more than -12% at a 6.5-month low. Sandisk (SNDK) closed down more than -22% to lead losers in the S&P 500 and Nasdaq 100, and Advanced Micro Devices (AMD), Micron Technology (MU) and Western Digital (WDC) closed down more than -17%. Also, Seagate Technology Holdings Plc (STX), Lam Research (LRCX), and Marvell Technology (MRVL) closed down more than -16%, and Applied Materials (AMAT), KLA Corp (KLAC), ARM Holdings Plc (ARM), and Microchip Technology (MCHP) closed down more than -13%. In addition, Analog Devices closed down more than -11%, and Intel (INTC), Broadcom (AVGO), and Texas Instruments (TXN) closed down more than -10%.
The Magnificent Seven Technology stocks retreated on Thursday and weighed on the overall market. Nvidia (NVDA) closed down more than -9% to lead losers in the Dow Jones Industrials, and Meta Platforms (META) closed down more than -4%. Also, Microsoft (MSFT) closed down more than -3%, and Amazon.com (AMZN) and Alphabet (GOOGL) closed down more than -2%. In addition, Apple (AAPL) closed down more than -1%.
Cloud infrastructure stocks sold off for a second day on Thursday amid concerns that Democrat-controlled Congress could pass regulations to limit data center construction. Lumentum Holdings (LITE) closed down more than -19%, and Applied Digital (APLD) closed down more than -15%. Also, Nebius Group NV (NBIS) closed down more than -14%, and CoreWeave (CRWV) and Arista Networks (ANET) closed down more than -10%. In addition, Oracle (ORCL) closed down more than -7%.
Cybersecurity stocks plunged on Thursday. Crowdstrike Holdings (CRWD), Okta (OKTA), and Palo Alto Networks (PANW) closed down more than -9%, and Zscaler (ZS) and SentinelOne (S) closed down more than -8%. Also, Cloudflare (NET) closed down more than -7%, Fortinet (FTNT) closed down more than -5%, and Gen Digital (GEN) closed down more than -1%.
Cryptocurrency-exposed stocks sank on Thursday after Bitcoin (^BTCUSD) tumbled more than -5% to a 7-week low. Iren Ltd (IREN) closed down more than -14%, and MARA Holdings (MARA) closed down more than -12%. Also, BitMine Immersion Technologies (BMNR) closed down more than -11%, and Bullish (BLSH) and Robinhood Markets (HOOD) closed down more than -10%. In addition, Circle Internet Group (CRCL), Coinbase Global (COIN), and Strategy (MSTR) closed down more than -8%, Galaxy Digital Holdings (GLXY) closed down more than -6%, and Riot Platforms (RIOT) closed down more than -1%.
Expedia Group (EXPE) closed down more than -13% after forecasting Q4 gross bookings of $27.9 billion to $28.4 billion, the midpoint below the consensus of $28.34 billion.
MercadoLibre (MELI) closed down more than -11% after reporting Q3 net income of $448 million, weaker than the consensus of $473.2 million.
Tesla (TSLA) closed down more than -10% and Space Exploration Technologies Corp (SPCX) closed down more than -8% as they fall for a second day on concerns that a Democratic-controlled Congress will lead to tighter regulations that stifle growth in the companies of Elon Musk, who aligned himself with GOP politicians.
Qualcomm (QCOM) closed down more than -9% after forecasting Q1 adjusted EPS of $2.15 to $2.25, the midpoint below the consensus of $2.32.
Zillow Group (ZG) closed down more than -9% after reporting Q3 revenue of $724 million, weaker than the consensus of $753 million, and forecasting Q4 revenue of $635 million to $665 million, well below the consensus of $708.6 million.
AppLovin (APP) closed up more than +31% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q3 revenue of $2.18 billion, stronger than the consensus of $2.07 billion, and forecasting Q4 total revenue of $2.37 billion to $2.40 billion, above the consensus of $2.25 billion.
EPAM Systems (EPAM) closed up more than +20% after reporting Q3 adjusted EPS of $3.51, stronger than the consensus of $3.41, and raising its full-year adjusted EPS forecast to $13.23 to $13.31 from a previous forecast of $13.08 to $13.24, above the consensus of $13.15.
Tapestry (TPR) closed up more than +7% after reporting Q1 adjusted EPS of $1.82, better than the consensus of $1.56, and raising its 2027 adjusted EPS forecast to $8.25 to $8.35 from a previous estimate of $7.80 to $7.90, well above the consensus of $7.96.
Corpay (CPAY) closed up more than +6% after reporting Q3 adjusted EPS of $7.54, stronger than the consensus of $7.18, and raising its full-year adjusted EPS forecast to $27.90 to $28.10 from a previous forecast of $27.15 to $27.55, better than the consensus of $27.38.
Earnings Reports (11/6/2026)
Charter Communications Inc (CHTR), Franklin Templeton Inc (BEN), Humana Inc (HUM), Moderna Inc (MRNA), PPL Corp (PPL), Vistra Corp (VST).
On the date of publication, Rich Asplund did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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