S&P 500 rises as investors rotate from AI to healthcare stocks
The S&P 500 closed higher on Thursday, rebounding from early losses as investors shifted from AI-related stocks into healthcare and consumer names. Nvidia fell 1.8 per cent after TSMC struck a cautious note on 2027, while Eli Lilly and UnitedHealth gained over 2.8 per cent.
The S&P 500 ended higher on Thursday, springing back from early losses as investors concerned about artificial-intelligence stocks shifted into Eli Lilly, UnitedHealth and other healthcare and consumer names, according to Reuters.
The benchmark index climbed 0.33 per cent to close at 7,744.06 points. The Nasdaq gained 0.08 per cent to 26,713.03 points, and the Dow Jones Industrial Average rallied 1.08 per cent to 52,177.69 points.
Drugmaker Eli Lilly gained over 3 per cent, UnitedHealth added 2.8 per cent and Walmart rose 1.4 per cent after rating upgrades by Deutsche Bank, Reuters reported. Eight of the 11 S&P 500 sector indexes rose, led by healthcare, up 1.84 per cent, followed by a 1.71 per cent gain in materials.
Several technology stocks fell as investors scrutinised AI-related companies whose debt loads leave them vulnerable to rising interest rates, Reuters said. Nvidia dipped 1.8 per cent after chip manufacturer TSMC struck a cautious note on 2027 despite reporting a sixth consecutive record quarterly profit on robust AI-driven demand.
Dell Technologies dropped 6.9 per cent and Hewlett Packard Enterprise fell 7.1 per cent, with both server makers adding to sharp losses in the prior session related to worries about AI companies exposed to higher borrowing costs, Reuters reported. The Philadelphia semiconductor index fell 0.9 per cent, down for a seventh straight session.
"The cost to finance everything, whether it be a new single-family house or a giant data center, is going up, and that has implications for lots of stuff in the stock market," Jed Ellerbroek, portfolio manager at Argent Capital Management in St. Louis, told Reuters. "The best performing stocks today are the non-cyclical, defensive businesses."
The yield on 10-year Treasuries retreated but remained near multiyear highs as investors worried about inflation related to high oil prices, Reuters noted. Data on Thursday showed US producer prices increased by the most in four and a half years in September, the latest indication of inflation broadening beyond energy products. Interest rate traders are pricing in a 67 per cent chance the Fed will raise interest rates by its December policy meeting, up from a 62 per cent probability on Wednesday, according to CME's FedWatch tool, Reuters reported.