Key Takeaways
- • The S&P 500 rose 0.3% to 7,744.06 and the Dow gained 556.21 points to 52,177.69 on Thursday, pulling closer to records despite a sharp AI-led sell-off earlier in the session.
- • Nvidia fell 1.8% and was the heaviest drag on the S&P 500, though it had more than halved an early loss of 3.8%; it entered the day up roughly 1,415% since the end of 2022.
- • Taiwan Semiconductor's U.S.-listed shares fell as much as 5.3% before closing down 1.8%, after the company beat high profit expectations and its CFO said demand should stay strong in the fourth quarter of 2026.
- • The 10-year Treasury yield fell to 5.09% from 5.19%, after touching its highest level since 2002 earlier in the month at above 5.30%.
- • South Korea's Kospi fell 7.6%, its worst day since July, and has dropped 39% since its June record, reflecting concentrated exposure to Samsung Electronics and SK Hynix.
Summary
U.S. stock indexes rose Thursday, led by companies reporting stronger-than-expected profits during the current earnings season, according to the Associated Press. The S&P 500 rose 0.3% after erasing an early-morning loss and moved closer to its all-time high set the previous week. The Dow Jones Industrial Average gained 1.1%, while the Nasdaq Composite added 0.1%.
Earnings drove many of the session's gains. Marsh, the insurance and professional services firm formerly known as Marsh & McLennan, rose 4.6% after reporting a stronger summer-quarter profit than analysts expected. Kimberly-Clark climbed 4.7% after saying it expected revenue and profit for the latest quarter to exceed analyst forecasts. Bank of New York Mellon rose 3.2% after a stronger-than-expected profit, with CEO Robin Vince citing strength across its regions.
AI stocks remained volatile. A sell-off that began on Wall Street Wednesday spread globally, sending South Korea's Kospi down 7.6% and Japan's Nikkei 225 down 4.9% before weighing on the S&P 500 at the open Thursday. Nvidia, which has become Wall Street's most valuable company, fell 1.8% and was the largest drag on the index, though its losses narrowed considerably during the day. Taiwan Semiconductor Manufacturing Co. dropped as much as 5.3% in the morning before finishing down 1.8%, despite reporting a quarterly profit above elevated expectations; CFO Wendell Huang said strong demand is expected to continue through the final three months of 2026. CoreWeave, which provides cloud-based AI computing power, fell as much as 9.5% after a 15.5% decline the previous day, then finished 5.9% higher.
Investor concern centers on the sustainability of AI spending. Companies are investing heavily in data centers and AI chips, and many have borrowed to fund those outlays. Bond yields worldwide have reached multi-year highs, raising borrowing costs and prompting questions about how long the spending boom can continue. High yields also tend to reduce investors' willingness to pay premium prices for richly valued stocks.
Treasuries rallied, with the 10-year yield falling to 5.09% from 5.19% late Wednesday. The yield had topped 5.30% earlier in the month, its highest level since 2002, on concerns about inflation and a strong U.S. economy. The decline came even as another report showed inflation had worsened more than economists expected. Other U.S. data came in stronger than forecast: retail sales for the prior month exceeded expectations, and initial jobless claims fell more than anticipated.
International markets diverged. South Korea's Kospi, dominated by Samsung Electronics and SK Hynix, posted its worst day since July. European indexes were firmer given their lower reliance on technology shares, with London's FTSE 100 rising 1.1%.
Earnings drove many of the session's gains. Marsh, the insurance and professional services firm formerly known as Marsh & McLennan, rose 4.6% after reporting a stronger summer-quarter profit than analysts expected. Kimberly-Clark climbed 4.7% after saying it expected revenue and profit for the latest quarter to exceed analyst forecasts. Bank of New York Mellon rose 3.2% after a stronger-than-expected profit, with CEO Robin Vince citing strength across its regions.
AI stocks remained volatile. A sell-off that began on Wall Street Wednesday spread globally, sending South Korea's Kospi down 7.6% and Japan's Nikkei 225 down 4.9% before weighing on the S&P 500 at the open Thursday. Nvidia, which has become Wall Street's most valuable company, fell 1.8% and was the largest drag on the index, though its losses narrowed considerably during the day. Taiwan Semiconductor Manufacturing Co. dropped as much as 5.3% in the morning before finishing down 1.8%, despite reporting a quarterly profit above elevated expectations; CFO Wendell Huang said strong demand is expected to continue through the final three months of 2026. CoreWeave, which provides cloud-based AI computing power, fell as much as 9.5% after a 15.5% decline the previous day, then finished 5.9% higher.
Investor concern centers on the sustainability of AI spending. Companies are investing heavily in data centers and AI chips, and many have borrowed to fund those outlays. Bond yields worldwide have reached multi-year highs, raising borrowing costs and prompting questions about how long the spending boom can continue. High yields also tend to reduce investors' willingness to pay premium prices for richly valued stocks.
Treasuries rallied, with the 10-year yield falling to 5.09% from 5.19% late Wednesday. The yield had topped 5.30% earlier in the month, its highest level since 2002, on concerns about inflation and a strong U.S. economy. The decline came even as another report showed inflation had worsened more than economists expected. Other U.S. data came in stronger than forecast: retail sales for the prior month exceeded expectations, and initial jobless claims fell more than anticipated.
International markets diverged. South Korea's Kospi, dominated by Samsung Electronics and SK Hynix, posted its worst day since July. European indexes were firmer given their lower reliance on technology shares, with London's FTSE 100 rising 1.1%.
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