U.S. equities are pointing modestly higher Friday as global technology stocks stabilize following this week’s AI-driven selloff and Treasury yields hold near their recent lows. At roughly 6:15 a.m. ET, Dow futures were up about 0.2%, S&P 500 futures were up 0.1% and Nasdaq 100 futures were up roughly 0.1%. Thursday, the Dow gained 1.08%, S&P 500 rose 0.33%, Nasdaq added 0.08% and Russell 2000 advanced roughly 1.4% as investors rotated away from heavily sold AI infrastructure names and toward Health Care, Financials and other areas of the market.
Thursday’s economic data reinforced an increasingly complicated growth/inflation mix. September PPI surged 1.3% month over month, the largest increase in 4½ years, and 6.3% year over year, driven heavily by gasoline and diesel prices but with pressure also evident in transportation and services. Retail sales rose a stronger-than-expected 0.8%, although gasoline accounted for much of the headline gain and the retail-control group increased only 0.1%, below expectations. Initial jobless claims remained exceptionally low at 199,000, extending the economy’s “low-hire, low-fire” labor-market pattern.
Treasuries rallied sharply despite the hot inflation data. The 2-year yield fell 5 basis points to 4.76%, the 10-year declined 10 basis points to 5.09% and the 30-year dropped 9 basis points to 5.43%. The move reflected both safe-haven demand associated with stress in AI-linked credit and a reduction in expectations for an immediate Fed move. The 10-year is near 5.08% this morning, roughly 28 basis points below last week’s 24½-year high. Fed Chair Kevin Warsh stopped short of signaling another near-term increase Thursday, and markets now largely expect the Fed to remain on hold at the October meeting despite this week’s hotter CPI and PPI readings.
The dollar weakened Thursday, with the DXY down 0.50 to 102.04. The euro gained 0.49% to $1.1214, sterling rose 0.61% to $1.3275, USD/JPY fell 0.15% to ¥158.10, and EUR/JPY increased 0.36% to ¥177.29. Dollar weakness has continued this morning, with the DXY near 101.77 and on pace for its first weekly decline in more than a month. The unusual feature of this week’s risk-off move is that the dollar has weakened alongside equities as investors increasingly interpret AI-related stress as a potential reason for a more patient Fed rather than simply a global flight into U.S. assets.
Commodities remain volatile. November WTI rose $2.57, or 2.70%, Thursday to $97.66, while December gold gained $85.00, or 2.07%, to $4,192.90. Oil is modestly lower this morning but remains on pace for a weekly gain as Middle East supply risks persist. Gold is holding near $4,185-$4,200, supported by the weaker dollar and lower Treasury yields. The combination of oil near $100 and long-term yields still above 5% remains an important macro constraint even as both have backed away from their recent extremes.
Today’s U.S. calendar is lighter than Thursday’s but still provides useful inflation and production signals. September import and export prices are due at 8:30 a.m. ET, followed by industrial production and capacity utilization at 9:15 a.m. Consensus expects industrial production to increase roughly 0.4% month over month after being flat in August, while capacity utilization is expected to rise to approximately 76.5% from 76.3%. The September federal budget statement follows at 2:00 p.m.
Sector Highlights
Thursday’s market showed substantially better breadth despite continued Technology weakness. Health Care +1.84% led, followed by Materials +1.71%, Financials +1.38%, Consumer Discretionary +1.16%, Real Estate +1.00%, Communication Services +0.62%, Industrials +0.49% and Consumer Staples +0.37%. The laggards were Energy -1.55%, Technology -0.54% and Utilities -0.21%. Breadth improved sharply, with advancers leading decliners by 3.12:1 on the NYSE and 1.99:1 on the Nasdaq. That is an important change from earlier this week: the capitalization-weighted indexes remain vulnerable to AI weakness, but participation underneath the market is broadening materially.
Consumer Discretionary
- Tesla (TSLA) is up roughly 5% premarket after unveiling its redesigned Roadster Thursday. The vehicle uses SpaceX-developed rocket-style thrusters and demonstrated airborne maneuvers, but production is not expected until 2028. The launch is more important as a branding and technology event than as an immediate earnings driver; Tesla reports third-quarter results next week, when investors will focus much more heavily on margins, robotaxi economics, AI spending and the company’s capital requirements.
Information Technology
- Nvidia (NVDA) and the broader semiconductor complex are attempting to stabilize after the PHLX Semiconductor Index posted its seventh consecutive decline Thursday. Nvidia fell 1.8%, while server suppliers Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE) dropped 6.9% and 7.1%, respectively. The fundamental AI-demand story remains strong, but investors are increasingly separating companies financing expansion from internally generated cash flow from businesses relying heavily on debt and external capital.
- The principal source of stress remains CoreWeave (CRWV), whose rising debt yields have intensified concerns about how increasingly leveraged AI data-center operators will fund expansion and ultimately generate sufficient cash flows to service their obligations. CoreWeave is not an S&P 500 constituent, but the issue is directly relevant to Nvidia, Dell, HPE, Oracle (ORCL) and other companies supplying or financing AI infrastructure. Markets are stabilizing this morning, but the credit concern has not disappeared.
Industrials
- Eaton (ETN) and other electrical-equipment and data-center infrastructure suppliers have a constructive read-through from Schneider Electric, which raised its 2026 sales and profit forecasts for the second time this year. Schneider reported 16.9% organic third-quarter revenue growth and said data-center demand increased at a triple-digit rate. The results reinforce the argument that physical AI infrastructure—power distribution, cooling and electrical equipment—continues to see extremely strong demand even as investors become more skeptical of the financing structures used by some data-center operators.
Financials
- Travelers (TRV) reports third-quarter results before the open, with its conference call scheduled for 9:00 a.m. ET. Investors will focus on catastrophe losses, underlying underwriting margins, commercial pricing and investment income. Travelers shares gained 1.6% Thursday and have outperformed many insurance peers recently as higher portfolio yields support investment returns.
- Truist Financial (TFC) also reports before the open, followed by its 8:00 a.m. ET conference call. The key issues are loan growth, deposit pricing, net-interest margins and credit quality. Large banks reported generally healthy third-quarter loan and deposit growth earlier this week, but competition for deposits has intensified as elevated Treasury yields force banks to pay more to retain funding.
- M&T Bank (MTB), Citizens Financial (CFG) and Regions Financial (RF) also report this morning, giving investors a broader read on regional-bank fundamentals. Unlike the largest money-center banks, these companies offer a cleaner view of commercial lending, deposit competition and the impact of 5%+ Treasury yields on traditional bank profitability.
Health Care
- UnitedHealth Group (UNH) remains one of the market’s strongest defensive leaders after rising another 2.8% Thursday. Earlier this week, UnitedHealth raised its 2026 adjusted EPS outlook to at least $20.50 after better-than-expected third-quarter results and improved medical-cost trends. The combination of company-specific earnings improvement and the market’s rotation away from capital-intensive Technology helped Health Care lead the S&P 500 again Thursday.
Consumer Staples
- Walmart (WMT) also helped support Thursday’s defensive rotation, rising 1.4% after Deutsche Bank upgraded the shares. The firm cited Walmart’s growing higher-margin businesses—including advertising, marketplace services, memberships and e-commerce—as reasons margins can continue expanding even as inflation pressures lower-income consumers. The stock remains a useful expression of the market’s preference for companies combining defensive demand with structural earnings growth outside the AI complex.
