Stocks give back early gains as tech leads broad selloff; long-end yields ease, crypto slumps

Overview
An early relief bid tied to optimism around artificial intelligence reversed into the close, leaving U.S. equities broadly lower on Thursday. The technology-heavy QQQ finished down 2.4% from Wednesday’s close, and the large-cap SPY declined 1.5%. The Dow proxy DIA slipped 0.8%, while small caps (IWM) fell 1.8%, underperforming for a second session as risk appetite faded. Sector tone was decisively risk-off: technology (XLK) led to the downside (-3.1%), financials (XLF) and health care (XLV) also declined, and energy (XLE) finished modestly lower despite weaker crude.

Against that equity backdrop, Treasurys firmed across the curve, helping duration proxies. Long bonds outperformed: TLT gained 0.4%, while intermediate IEF rose 0.3% and front-end SHY edged up 0.1%. Commodities were softer: oil (USO) fell 1.0%, silver (SLV) slid 1.4%, and a broad commodity basket (DBC) lost 0.9%. Gold (GLD) was essentially unchanged. In digital assets, the retracement was sharper: Bitcoin (BTCUSD) fell roughly 6.8% on the day with intraday swings between about $85,974 and $93,100, and ether (ETHUSD) dropped 6.7%.

Macro backdrop: yields, inflation, and policy expectations
Treasury yields remain below recent peaks, with the latest reference prints showing the 10-year at 4.12% and the 30-year at 4.74%. The 2-year sits near 3.58% and the 5-year around 3.70%. Today’s bid in duration and the parallel move lower in yields are consistent with the day’s price action in TLT and IEF. While the move is modest, it aligns with a market that is reassessing growth and policy risk after a string of mixed economic developments and policy headlines.

On inflation, the most recent CPI readings available (September) place the headline index at 324.368 and core at 330.542. Without month-over-month or year-over-year changes in this feed, the level data still signals that price pressures remain elevated relative to pre-pandemic baselines, even as the direction of travel has moderated in recent months. Market- and model-based inflation expectations remain anchored in a 2.25% to 2.75% corridor depending on tenor and approach: one-year model-implied inflation is 2.74%, with market-based breakevens around 2.36% for five years and 2.31% for 10 years, and a 5y/5y forward near 2.25%. That mix—anchored long-term expectations with some near-term stickiness—helps explain the curve’s shape and the market’s sensitivity to growth and earnings surprises.

Policy signaling was mixed in recent commentary. Minutes from the Federal Reserve’s latest meeting highlight “strongly differing views” on whether to cut rates again in December, underscoring the data-dependent posture heading into year-end. Complicating the near-term outlook, the Bureau of Labor Statistics confirmed it will not release a full October employment report and that November’s report will be delayed, depriving the Fed and markets of timely labor-market signals ahead of the early-December decision. The result is a macro tape that is more reactive to high-frequency corporate and market data, and prone to swings when marquee earnings (notably in AI) hit the wires.

Equities: AI enthusiasm fades into close; small caps lag
Major index ETFs rolled over through the afternoon. SPY finished at 652.53 versus a prior close of 662.63, a decline of about 1.5%. QQQ ended at 585.70 vs. 599.87 (-2.4%) as megacap tech and AI bellwethers lost momentum. DIA closed at 458.07 vs. 461.76 (-0.8%). IWM, at 229.14 vs. 233.43, fell 1.8%, consistent with a renewed preference for quality balance sheets and large-cap defensives when volatility picks up.

The day’s narrative featured crosscurrents in AI and large-cap tech. On one hand, recent Nvidia results and commentary initially soothed broader AI-bubble concerns, stoking a global tech bounce. On the other, a MarketWatch mid-session update flagged that an Nvidia-inspired rebound faltered as doubts re-emerged, and by the close that tone was reflected across the tape. The conflicting messaging left individual AI-adjacent names and suppliers in a churn: articles highlighted potential relative beneficiaries like AMD, as well as lingering concerns around buyback slowdowns in 2026 as AI players add balance-sheet leverage—an underappreciated equity-demand headwind that’s begun to surface in recent weeks.

Sectors: tech leads lower; financials and health care follow; energy slips with crude
Sector leadership skewed negative:
- XLK closed at 272.23 vs. 280.97, down 3.1%, the day’s weakest major sector ETF as AI fatigue set in and profit-taking resumed. Articles also pointed to new initiatives in frontier computing—such as IBM and Cisco’s quantum partnership—whose financial impact is years away, reinforcing the market’s near-term focus on cash-generative AI exposure over long-dated bets.
- XLF ended at 51.12 vs. 51.56 (-0.9%). Banks and diversified financials followed the market lower despite lower long-end yields, a reminder that earnings revisions and capital-return dynamics can overshadow rate-beta on a given day.
- XLV finished at 151.38 vs. 152.33 (-0.6%). Health care headlines were mixed, with UnitedHealth reportedly undertaking sizeable adjustments to Medicare Advantage to restore margins—strategically rational, but not a near-term catalyst.
- XLE settled at 88.04 vs. 88.47 (-0.5%). Energy’s relative resilience earlier in the week faded alongside crude’s drop and broader cyclical unease. Geopolitical and sanctions-related oil flows remained in focus in international reporting, but the price signal was unambiguously softer today.

Retail and consumer updates were a notable subplot. Walmart’s otherwise solid report was marred by softer Sam’s Club comps, and separate pieces flagged pressure at Target as store traffic and spending remain under strain. Bath & Body Works endured a “historic plunge” after a disappointing earnings print and a candid CEO assessment of execution missteps—emblematic of a consumer environment where discretionary brands must thread the needle on price, product, and traffic. Conversely, off-price strength persisted: T.J. Maxx’s parent was highlighted for record-setting performance as value-seeking consumers kept hunting for deals. The dispersion across retail speaks to a still-fragmented consumer landscape.

Bonds: duration bid as growth and policy uncertainty linger
Treasury ETFs were higher: TLT closed at 89.24 vs. 88.88 (+0.4%), IEF at 96.885 vs. 96.64 (+0.3%), and SHY at 82.935 vs. 82.86 (+0.1%). These moves are consistent with a modest decline in yields, including the 10-year near 4.12% and a still-elevated 30-year at 4.74%. The policy mix—Fed minutes showing internal debate on the next cut and a gap in timely labor data—encourages a “wait-and-see” stance that favors carry and quality amid equity volatility.

Commodities: oil and silver weaken; gold steady
- GLD was essentially flat at 374.92 vs. 374.96. The lack of movement in bullion, despite equity weakness and a small Treasury rally, suggests gold may already reflect a fair amount of policy and geopolitical hedging.
- SLV fell to 45.79 vs. 46.45 (-1.4%), underperforming gold and retracing a portion of its strong year-to-date advance referenced in recent commentary.
- USO slipped to 70.16 vs. 70.88 (-1.0%). Flow headlines around Russia–India crude dynamics and approaching sanctions deadlines added noise, but the tape pointed to softer near-term demand expectations.
- UNG dropped to 14.42 vs. 14.70 (-1.9%), while broad commodities via DBC fell to 22.69 vs. 22.90 (-0.9%).

FX and crypto: euro near 1.15; crypto drawdown deepens
- EURUSD marked around 1.1523 at today’s close snapshot. Without a prior-day reference in this feed, intraday direction cannot be quantified here, but the level aligns with a somewhat softer dollar profile seen in recent weeks when U.S. yields eased.
- BTCUSD traded with a wide intraday range, marking near 86,569 versus an open of 92,893 (-6.8%), with a high of about 93,100 and a low near 85,974. A series of articles framed the broader crypto backdrop as a bear-phase retracement, citing record ETF outflows and market cap drawdowns since October. ETHUSD tracked lower as well, marking near 2,844 vs. an open of 3,047 (-6.7%), with a range spanning roughly 2,786 to 3,062.

Notable company and thematic news
- Nvidia and AI ecosystem: Coverage captured competing narratives—MarketWatch noted that an Nvidia-inspired rebound faltered intraday, even as other pieces emphasized the company’s beat and visibility that initially calmed bubble fears. The split explains the day’s tech weakness and underscores elevated positioning and headline sensitivity.
- AMD and secondary AI plays: A separate analysis highlighted AMD as a potential relative winner post-Nvidia, alongside other AI beneficiaries—helpful context for why semis initially caught a bid that failed to hold.
- Palo Alto Networks: Earnings were characterized as underwhelming even with a new AI deal, reinforcing more selective risk-taking across cybersecurity.
- Retail dispersion: Walmart’s report was dinged by Sam’s Club comps, Target flagged softer traffic and spending, and Bath & Body Works suffered a severe post-earnings reaction. By contrast, T.J. Maxx’s parent was highlighted for record results. These moves map cleanly to the macro thesis of value over discretionary premium in a still-stretched consumer wallet.
- M&A and health care: Abbott’s agreement to acquire Exact Sciences and its Cologuard test for $21 billion spotlights a push into cancer diagnostics, potentially reshaping competitive dynamics in screening.
- Aerospace and industrials: Investigations into a UPS cargo jet crash saw investors reportedly sell Boeing and GE Aerospace according to coverage—a reminder of headline risk in aerospace supply chains.
- Telecoms: Verizon’s new CEO is pursuing 13,000 job cuts to streamline operations, addressing years of stock underperformance—a strategic reset but with uncertain near-term equity impact.
- Frontier tech: IBM and Cisco announced a quantum partnership aimed at a connected fault-scale network by the early 2030s—strategically notable but distant in terms of earnings contribution, which today’s market discounted in favor of near-term cash flows.
- Materials and supply security: MP Materials announced a new government-linked deal to build a rare-earth refinery in Saudi Arabia, a potential positive for supply-chain diversification.

How it fits together
Today’s pattern—tech-led equity weakness, modest bull-flattening in rates, softer cyclicals, and a crypto drawdown—reflects a market recalibrating near-term growth and policy hopes after a burst of AI-driven enthusiasm. Anchored medium- and long-term inflation expectations allow bonds to function as an equity hedge again, but dispersion within equities remains high. Consumer data and corporate micro (especially AI-capex cadence and buyback capacity) are increasingly central to index-level outcomes.

Outlook
- With Fed minutes showing internal divisions and labor data delayed, the December policy decision may hinge more heavily on high-frequency inflation proxies and financial conditions. The 10-year near 4.12% is consistent with “on-hold” expectations; a break lower in yields would likely require clearer disinflation or growth softness.
- AI earnings and capital plans remain swing factors. Watch for updates on data-center spending, supply bottlenecks, and any signs of balance-sheet strain that could curb buybacks in 2026—a potential incremental headwind to equity demand noted in recent analysis.
- Retail seasonality is here. Holiday cadence across value versus discretionary will be pivotal for Q4 earnings quality. Off-price channels are executing well; premium discretionary is more fragile.
- Energy balance bears monitoring into the sanctions window and as freight and trade data show signs of a “structural goods recession,” per logistics commentary. If sustained, that would pressure commodities and cyclicals.

Risks
- Policy uncertainty: Incomplete labor data ahead of the Fed’s December meeting injects added volatility into rates, credit, and equities.
- AI positioning unwind: A sharp reversal in megacap tech could tighten financial conditions quickly via wealth effects and index mechanics.
- Buyback capacity: Increased leverage to fund AI capex could slow repurchases in 2026, reducing a key equity-demand pillar.
- Geopolitics and supply chains: Oil flows and aerospace safety headlines can create gap risk for energy and industrial complexes.
- Crypto contagion: Accelerated ETF outflows and price volatility could spill over into broader risk sentiment.

Bottom line
The market turned defensively into the close as tech leadership faltered, small caps underperformed, and bonds provided modest ballast. With inflation expectations anchored and the 10-year near 4.12%, duration can buffer equity volatility, but earnings quality and cash-return visibility are dictating cross-asset leadership. Near-term, watch for further AI and retail updates, along with evolving policy rhetoric in the absence of fresh labor data.