The Nasdaq Composite fell 0.9%, the S&P 500 slipped 0.4%, and the Russell 2000 declined 0.3%. They all finished above their session lows, but the market never fully recovered from an early retreat led by semiconductors and the broader AI infrastructure trade. Rising Treasury yields and persistent inflation concerns remained important constraints, particularly for growth and other higher-valuation stocks.

Semiconductors established their lows early, with the Philadelphia Semiconductor Index (-3.4%) down as much as 6.5%. NVIDIA (NVDA 162.85, -3.34, -2.0%), Advanced Micro Devices (AMD 534.06, -51.24, -8.8%), Broadcom (AVGO 347.01, -17.35, -4.8%), Intel (INTC 59.66, -1.54, -2.5%), Micron (MU 778.31, -20.13, -2.5%), and Applied Materials (AMAT 370.50, -10.45, -2.7%) were notable laggards.

The group contended with profit-taking, uncertainty surrounding NVIDIA's leadership, possible chip-export restrictions, analyst downgrades, and questions about the pace and execution of AI buildouts. Weakness also extended to the likes of Dell (DELL 344.28, -26.89, -7.2%), Corning (GLW 114.06, -5.16, -4.3%), Cisco (CSCO 95.64, -6.37, -6.2%), Oracle (ORCL 125.37, -1.74, -1.4%), and Seagate Tech (STX 528.29, -16.85, -3.1%).

The selling was broader than technology, but it was less severe away from the Nasdaq's growth-heavy areas. Advancers outpaced decliners by a small margin at the NYSE. The equal-weighted S&P 500 (+0.2%) recovered from an early decline and turned positive during the afternoon.

The information technology sector declined 1.7%, while six of the other ten S&P 500 sectors were higher. Consumer staples led the winners with a 1.4% gain and was followed by energy (+1.0%), financials (+0.8%), health care (+0.6%), utilities (+0.4%), and communication services (+0.3%).

The October Producer Price Index initially generated relief because the headline reading was softer than expected, but that response faded as investors considered upward revisions to September and still-elevated year-over-year readings. Final demand prices were up 6.5% from a year ago, the largest increase since November 2022, while core producer prices were up 5.0%.

Wholesale inflation remains a big problem, and that fit with the comments from New York Fed President Williams (permanent FOMC voter) and Chicago Fed President Goolsbee (2027 FOMC voter), who said the Fed has more work to do to get inflation back to the Fed's 2.0% target.

Treasury yields initially dipped following the PPI report but reversed higher as the session progressed, reinforcing the pressure on technology and higher-beta stocks. The 2-yr yield settled one basis point higher at 4.89%, while the 10-yr yield rose five basis points to 5.15%, its highest settlement in more than four weeks. For the week, those yields increased 36 and 29 basis points, respectively, as speculation about a potential 50-basis-point rate hike in December contributed to sizable losses across the Treasury curve.

Today's close showed that the day's weakness was concentrated most heavily in technology, but the unfavorable inflation and rate backdrop kept the broader market from mounting a sustained recovery.

Attention now turns to next week's data and earnings calendar. October retail sales and the minutes from the October FOMC meeting will provide additional insight into consumer resilience and the policy outlook. Home Depot (HD 348.69, +0.43, +0.1%) and Walt Disney (DIS 118.97, +0.74, +0.6%) report Tuesday morning, followed by NVIDIA that evening.

• Russell 2000: +12.4% YTD
• S&P 400: +11.4% YTD
• S&P 500: +10.5% YTD
• DJIA: +8.8% YTD
• Nasdaq Composite: +8.2% YTD

Reviewing today's data:

• October PPI 0.3% vs. 0.4% Briefing.com consensus; prior revised to 1.4% from 1.3%
• October Core PPI 0.3% vs. 0.3% Briefing.com consensus; prior revised to 0.8% from 0.7%
• 11/07 EIA Natural Gas Inventories +61 bcf; prior +77 bcf

Monday's economic calendar:

• 8:30 AM ET: November Empire State Manufacturing; Briefing.com consensus 15.9; prior 25.5