Hot CPI sank tech: ORCL -8.83%, Kospi -7.57%; retail sales, PPI 8:30

September inflation came in hotter than expected on Wednesday, 0.6% on the month and 3.7% on the year against 3.6% forecast, with core at 2.6% against 2.5%, and the market sold the most expensive things it owns: the Nasdaq Composite fell 1.88% to 26,692.87 and the S&P 500 1.1% to 7,718.94, its worst day since July per AP, while the Dow slipped 0.09% to 51,621.48. The selling had a second engine. CoreWeave’s bonds traded at yields near 15% and the question of who pays for AI data centres landed on Oracle (ORCL), down 8.83% to $130.55 from $143.20, and spread through chips and software: AMD fell 5.73%, Micron 4.10%, Nvidia 3.16%, Cloudflare 6.72%, Snowflake 6.34%. Overnight it reached Asia, where Korea’s Kospi closed down 7.57% after a 20-minute trading halt, SK hynix fell 11.06% and Japan’s Nikkei lost 4.9%. Yet 41 of the 100 stocks and funds we track rose, healthcare and staples led, and Treasuries rallied on the hot print, with the 10-year closing at 5.19%. Retail sales, producer prices and jobless claims all land at 8:30 a.m. ET; TSMC reported record profit overnight and Charles Schwab reports before the open.

The CPI print and what the bond market did with it

The Bureau of Labor Statistics reported consumer prices up 0.6% in September from August and 3.7% from a year earlier, against the 3.6% Dow Jones consensus and 3.4% in August, per CNBC and CBS News. Core prices rose 0.3% on the month, matching August, and 2.6% on the year against 2.5% expected and 2.4% in August. Gasoline rose 9.1% in the month and accounted for about half of the headline increase; energy is up 20.4% over the year and airline fares 22.4%, per CBS. The core figure was the one that mattered: it had been expected to hold at 2.4% and instead rose two tenths, so the energy story is no longer the whole story. CME FedWatch odds of the Fed holding its 3.75% to 4% range at the October 27–28 meeting fell to 58.5% from 77.9% on Tuesday, per Kiplinger, which means futures now price a meaningful chance of a second hike this year after September’s.

The bond market did not behave like a market pricing a hike. The 10-year closed at 5.19%, down about 2 basis points, after rising on the print in the morning, and the 2-year rose about 1 basis point to 4.808%, per CNBC. The long-dated Treasury fund TLT rose 0.66% to $78.89 and the gold fund GLD fell 1.49% to $375.99 from $381.67. The front end moved toward the Fed and the long end moved toward safety, which is what a growth scare looks like, not an inflation scare on its own. That reading is consistent with where the selling landed, which was almost entirely in the names whose value depends on money being cheap for years to come.

Oracle fell 8.83% and the AI debt question went mainstream

Oracle (ORCL) fell 8.83% to $130.55 from $143.20 on 52.0 million shares, erasing Tuesday’s 4.23% gain and then some, and was quoted at $127.35 after hours on 48.7 million shares. The trigger was not Oracle’s own news. CoreWeave’s 9.625% bonds due 2032 traded to yield about 14.8% and its 9.75% notes due 2031 about 14.9%, per CNBC as cited by Traders Agency, and five-year credit default swaps on the company roughly doubled in a week to 643 basis points from 368, per Startup Fortune. CoreWeave’s shares fell about 16% and Nebius between 10% and 15% depending on the report. Oracle got pulled in because it has the same business model at a larger scale: Bloomberg, via Yahoo Finance, reported that the company has nearly doubled its long-term debt to more than $160 billion over two years to build AI capacity, and its credit rating now sits one notch above speculative grade, per Yahoo. Its 6.25% bonds due 2032 yielded about 7.24%, per Traders Agency, so the market is still treating Oracle as a different credit from CoreWeave, but the stock traded as if that distinction is being re-examined. Separately, Yahoo Finance reported that Oracle moved to shield itself from costs tied to its Project Jupiter data centre in New Mexico if the facility does not come online in 2028 as planned.

The chip designers fell with it, which is the connection worth seeing. AMD (AMD) fell 5.73% to $570.82 from $605.53 and was quoted at $555.00 after hours; Nvidia (NVDA) fell 3.16% to $221.30 from $228.52 on 117.2 million shares and was at $217.89 after hours; Micron (MU) fell 4.10% to $914.13 from $953.19, its third straight decline; Arm (ARM) fell 6.81%, Intel (INTC) 4.56% on 103.4 million shares, Broadcom (AVGO) 3.10%, Applied Materials (AMAT) 3.79% after Tuesday’s 6.69% fall, Texas Instruments (TXN) 2.50% and Qualcomm (QCOM) 2.40%. The technology fund XLK fell 2.98% and the Nasdaq-100 fund QQQ 1.97% to $728.95 from $743.57, quoted at $722.10 after hours. On Tuesday the logic names rose while equipment and memory fell; on Wednesday everything in the supply chain fell together, because the worry moved from which chips get bought to whether the buyers can keep borrowing to pay for them. The Philadelphia Semiconductor Index fell 4.3%, per US News.

Here is where the data disagrees with the narrative. TSMC, which manufactures for Nvidia, AMD, Broadcom and Apple, reported overnight that third-quarter revenue reached NT$1.494 trillion, about $46.72 billion, up 50.9% from a year earlier in Taiwan dollar terms and 41.2% in US dollar terms, above its own $44.6 billion to $45.8 billion guidance and the $45.62 billion analysts expected, per TradingKey and Benzinga. Net profit was NT$763.06 billion against an LSEG consensus of NT$746.3 billion, a rise of 68.7% from a year earlier; gross margin was 66.4%, and 2026 capital spending guidance stayed at $60 billion to $64 billion. ASML said on Wednesday it cannot fully meet demand in 2027 or 2028. The orders are real and growing. What the market sold on Wednesday was not demand for chips but the financing of the customers who place the orders. TSMC’s fourth-quarter outlook was due on its 2:00 a.m. ET call and is not in the reports available at the time of writing.

Software, fintech and the Magnificent Seven

The software names that trade on long-duration growth fell hardest after Oracle. Cloudflare (NET) fell 6.72% to $324.33 from $347.70, Snowflake (SNOW) 6.34% to $335.08 from $357.76, Palo Alto Networks (PANW) 5.54%, Datadog (DDOG) 4.94%, CrowdStrike (CRWD) 4.56%, MongoDB (MDB) 4.50%, Palantir (PLTR) 3.69% and Reddit (RDDT) 4.31%. It was not universal: Adobe (ADBE) rose 1.86%, ServiceNow (NOW) 0.99% and Salesforce (CRM) fell only 0.87%, so the selling concentrated in the names with the highest multiples and the most direct exposure to AI infrastructure spending.

The fintech and crypto-linked names fell as a group with no company news we could find: Affirm (AFRM) fell 9.47% to $70.51 from $77.89, the largest decline among the 100 names we track, Robinhood (HOOD) 8.54% to $101.08 from $110.52 and Coinbase (COIN) 4.90%. These are the names most sensitive to the cost of consumer credit and to risk appetite, and both were repriced on Wednesday.

The largest companies fell less than the market’s narrative implies. Meta (META) fell 3.27% to $737.54 from $762.50, giving back Tuesday’s 2.63% gain ahead of its October 21 report. Tesla (TSLA) fell 2.15%, Microsoft (MSFT) 1.80% to $533.69, Alphabet (GOOGL) 1.74% and Amazon (AMZN) 1.74%. Apple (AAPL) rose 0.50% to $342.96, the only one of the seven higher, a day after touching a record. The S&P 500 fund SPY fell 1.08% to $769.60 from $778.01 and the small-cap fund IWM 1.93%, in line with the Russell 2000’s 1.93% drop to 2,729.53 per TheStreet, while the Dow fund DIA fell 0.11%, so the damage was in growth and small caps, not the blue chips.

Banks split; healthcare and staples rose

Bank of America (BAC) fell 4.76% to $51.39 from $53.96 on 118.0 million shares, opening at $49.83 and trading as low as $49.26 before recovering through the day, and was quoted at $51.48 after hours. The Treasury Department announced more than $1.21 billion in anti-money-laundering and sanctions penalties on Tuesday, with FinCEN’s $1.2 billion the largest part and the OCC’s $750 million counted within it, per Yahoo Finance; the penalty is not tax-deductible and cost about 17 cents a share. Reported earnings were $0.91 a share against about $1.10 expected, or $1.08 excluding the penalty, on revenue of $30.12 billion against $30.69 billion, per CNBC, so the quarter missed on revenue even before the fine. The compliance problems were known from a 2024 OCC order; what was new was the size of the bill and a revenue line that fell short in the same week JPMorgan raised its lending guidance.

Morgan Stanley (MS) fell 2.75% to $181.51 from $186.64, trading as low as $176.44, after a quarter that beat on every headline: net revenue of $20.34 billion against $19.96 billion expected, earnings of $3.03 a share, return on tangible equity of 22.6%, record wealth management revenue above $9 billion with $232 billion of net new assets, slightly more than half tied to IPOs, and institutional equities revenue up 41% from a year earlier, per Benzinga and the Motley Fool’s call transcript. That extends Tuesday’s pattern, when Goldman Sachs and Citigroup also beat and closed lower. The exception was JPMorgan (JPM), which rose 1.16% to $335.28 the day after its miss, while Wells Fargo (WFC) rose 0.20%, Citigroup (C) fell 1.81% and Goldman Sachs (GS) 1.48%. The financial fund XLF fell 0.55%. BlackRock (BLK) rose 0.72% after its own report.

The money that left tech had somewhere to go. The healthcare fund XLV rose 2.53% to $173.96, reversing Tuesday’s 1.35% fall. UnitedHealth (UNH) rose 4.73% to $395.62 from $377.76 on 7.8 million shares, the largest gain among the 100 names we track, a day after it opened 5% higher on its earnings beat and closed lower; the stock has now done the round trip. Merck (MRK) rose 3.80% to $147.37, Eli Lilly (LLY) 3.62% to $1,208.74, AbbVie (ABBV) 3.32%, Pfizer (PFE) 2.96%, Johnson & Johnson (JNJ) 2.13% to $253.91, recovering part of Tuesday’s 5.73% drop, and Thermo Fisher (TMO) 1.53%. Pharmaceuticals were also the main gainers in Tokyo overnight, per The Standard.

Staples and the carriers rose with them. Walmart (WMT) rose 3.46% to $116.16 from $112.28 on 25.8 million shares, Costco (COST) 2.87% to $982.00, Procter & Gamble (PG) 2.28%, Altria (MO) 2.19%, Coca-Cola (KO) 1.85%, PepsiCo (PEP) 1.55%, McDonald’s (MCD) 1.06%, T-Mobile (TMUS) 2.64%, Verizon (VZ) 2.04% and AT&T (T) 0.88%. Berkshire Hathaway (BRK.B) rose 1.11%. Energy rose as well: Chevron (CVX) rose 1.98% to $222.04, Exxon (XOM) 1.68% to $177.01 and the energy fund XLE 0.64%, with Brent settling at $106.06 and WTI at $95.09 on Wednesday after Saudi officials said Aramco facilities were attacked, per CNBC. RTX (RTX) rose 1.89%. Breadth was negative but not a rout: 59 of the 100 stocks and funds we track fell, the same count as Tuesday, and 41 of the 100 rose. On the industrial side Caterpillar (CAT) fell 3.08% to $748.98, extending Tuesday’s 3.33% drop on the same higher-for-longer financing argument.

In the movers feed, Bending Spoons (BSP) rose 41.46% to $53.64 on 19.6 million shares after Berkshire Hathaway agreed to buy 10 million newly issued shares at $33 each, a $330 million placement that takes its stake to about 4%, per CNBC and Bloomberg; the $33 price was below Tuesday’s $37.86 close. Chewy (CHWY) rose 5.76% to $20.85.

Korea halted trading; Japan fell 4.9%; Europe indicated lower

South Korea’s Kospi opened 5.59% lower and closed down 7.57% at 5,554.22, its first close in the 5,500s since July 30, after a sell-sidecar at 9:07 a.m. and a market-wide circuit breaker that halted trading for 20 minutes at 12:38 p.m., per the Korea Herald. The intraday low was 5,450.81. The Kosdaq fell 7.65% to 760.82 after its own halt. Samsung Electronics fell 9.48% to 210,000 won, SK hynix 11.06% to 1.26 million won, Samsung Electro-Mechanics 15.36% and SK Square 10.21%. Foreign investors net sold 3.62 trillion won, about $2.68 billion, while individuals and institutions bought, and the won weakened to 1,343.18 per dollar after touching 1,353. The Korea Herald attributed the fall to Fed hike fears after the CPI print; US News reported JPMorgan strategists’ observation that buybacks at Samsung and SK hynix have ended, removing a steady buyer. It is a seventh straight decline, extending the six-session run TradingKey counted through Wednesday’s 0.44% fall in Seoul.

Japan’s Nikkei 225 fell 4.9% to 64,425.95, per The Standard, with Investing.com reporting 4.77%; Advantest fell 15% and Tokyo Electron 7.8%, and SoftBank Group fell sharply, with Reuters-based reports naming the CoreWeave debt story and US rate fears as the causes. Pharmaceuticals rose. Europe was expected to open lower: Stoxx 50 futures were down 0.9%, ASML 1.52% and Infineon 2.32% in premarket trading, per CNBC. The Guardian’s live blog reported UK GDP growth beat forecasts in August. Anthropic, per the BBC, flagged a revenue surge to investors ahead of its planned stock market debut, which matters for the AI financing debate even without a listed stock.

US futures were lower early but far less than Asia: S&P 500 futures down 0.31%, Nasdaq-100 futures 0.83% and Dow futures up 0.12%, per CNBC’s live blog, after Nasdaq-100 futures had been down 1.04% at 10:57 p.m. ET on Wednesday, per Stocktwits. Brent fell about 1.66% to $104.31 on Thursday morning after a Singapore-registered ship was sunk in the Strait of Hormuz, per CNBC.

What to watch today

September retail sales, September PPI and weekly jobless claims at 8:30 a.m. ET. DailyCoin’s preview has retail sales growth easing to 0.3% from 1.2%; Schwab’s calendar lists core PPI alongside the headline. After Wednesday’s CPI, producer prices are the second inflation read before the October 27–28 Fed meeting.
Industrial production at 9:15 a.m. ET.
Charles Schwab before the open with a call at 8:30 a.m. ET, consensus about $1.66 to $1.67 a share on roughly $7.20 billion of revenue, per MarketBeat and the Motley Fool. PNC, US Bancorp, BNY Mellon and Alcoa also report today per Wednesday’s calendars. Travelers reports Friday morning, per StockStory; Netflix on Tuesday, October 20, after the close.
TSMC’s fourth-quarter guidance from its 2:00 a.m. ET call, and the ADR at the open after record results against a 4.3% fall in the Philadelphia Semiconductor Index.
The after-hours quotes of the names that led the selling: Oracle at $127.35, AMD at $555.00, Nvidia at $217.89, QQQ at $722.10 and SPY at $767.15.
CoreWeave’s bonds and shares, with the 2032 notes near 14.8% on Wednesday, and Oracle’s 2032 notes at about 7.24%.
Europe’s open after Stoxx 50 futures indicated 0.9% lower and ASML 1.52% lower premarket.
Oil with Brent at $104.31 after the sinking in the Strait of Hormuz, and gold after GLD’s 1.49% fall.

Not financial advice. iTrading Buddy summarizes publicly available market data and news; every figure above is sourced from the reporting available before the US open on the date shown. Verify anything you act on.