Tech Wreck & Bulls on Deck

Last Week

AI economics and inflation data cast a shadow over Wall Street. The Tech sector’s woes worsened, as the Nasdaq Composite plunged 4.5%. The AI stocks that have skyrocketed over the last few years bore most of the downward pressure, with the SOXX (iShares Semiconductor ETF) extending its losing streak to 9 straight days, down 16.3%. Notably, even after that precipitous decline, SOXX is still up 64% in 2026 and 211% over the last three years. CoreWeave, which rents computing capacity to AI companies, saw its bond yield spike and its stock price plunge as concerns mounted that the company could generate enough profits to service its mounting debt load. The damage to the Tech sector was significant enough to drag the S&P 500 into a 2% loss, even though advancing issues outnumbered declining issues by a slim margin. Small caps faced another tough week as the Russell 2000 fell 3%, even as the 10-year Treasury yield fell 15 basis points to 5.1%. Market strategists have blamed the weakness in small caps on rising rates, so the tide might turn if rate easing continues.

The war’s effects were evident as September CPI rose to 3.7%, up from 3.4% in August. Producer Prices jumped 6.3% year-over-year, its biggest increase since March 2022. The main driver was a 50% rise in energy prices since the start of the war, which has spread into the prices of many goods and services.

Stock traders noticed mounting risks, driving a 30% rise in the VIX (Cboe Volatility Index) to its highest level since spring.

Earnings season kicked off with Goldman Sachs, JPMorgan, Citigroup, and Wells Fargo reporting results that failed to impress investors. Bulls are counting on a strong third-quarter earnings season to swing the pendulum back to greed after its recent visit to the fear end of the register.

Speaking of Bulls, the NBA season is on deck, with Chicago fans excited about rookie Caleb Wilson’s prospects. Speaking of Calebs, Caleb Williams was 30/36 for 305 yards in a win over the Atlanta Falcons.

This Week

Earnings season will pick up speed with 79 S&P 500 companies reporting results. The consensus calls for 29% composite year-over-year results, which underpins the market’s high valuations.

The economic calendar is quiet.

The midterm elections are only a few weeks away; could the administration offer something constructive?

The stocks mentioned above may be holdings in our mutual funds. For more information, please visit www.nsinvest.com.