Nasdaq Futures Plunge as AI Stock Rout Rolls On; U.S. PPI Data and Warsh’s Remarks in Focus

December Nasdaq 100 E-Mini futures (NQZ26) are down -1.10% this morning as investors continued to trim their exposure to the AI trade.

The global rout in AI-related stocks continued on Thursday. A hot U.S. inflation report fueled expectations of higher interest rates, which would translate into higher borrowing costs. That could heighten credit risks for AI-related companies and disrupt their substantial infrastructure investments. Further dampening sentiment toward the AI trade, Anthropic PBC reportedly disclosed $16.8 billion in Q3 revenue to prospective investors, with the figures suggesting that growth had moderated despite remaining strong. Memory-chip makers SK Hynix and Samsung Electronics plunged more than -11% and -9% in Seoul, respectively, while tech investor SoftBank Group slumped over -9% in Tokyo. European AI-related stocks also got hit, with Dutch semiconductor-equipment maker ASML Holding sliding over -5%. The selloff spilled over into U.S. pre-market trading, with Sandisk (SNDK) sliding over -4% and Intel (INTC) declining more than -3%.

Investors are now awaiting a new round of corporate earnings reports, remarks from Federal Reserve Chairman Kevin Warsh, and a flurry of U.S. economic data, with a particular focus on producer inflation and retail sales figures.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed lower as the hotter-than-expected inflation report dampened sentiment. Chip and AI infrastructure stocks sank, with Marvell Technology (MRVL) slumping over -8% and Arm Holdings (ARM) falling more than -6%. Also, CoreWeave (CRWV) tumbled over -15% and was the top percentage loser in the Nasdaq 100 amid a selloff in the AI infrastructure provider’s corporate bonds. In addition, Dell Technologies (DELL) plunged more than -11% after Barclays downgraded the stock to Equal Weight from Overweight. On the bullish side, defensive health insurance and healthcare stocks climbed, with UnitedHealth Group (UNH) rising over +4% to lead gainers in the S&P 500 and Dow and Moderna (MRNA) advancing more than +4% to lead gainers in the Nasdaq 100.

The U.S. Bureau of Labor Statistics report released on Wednesday showed that consumer prices rose +0.6% m/m in September, in line with expectations. On an annual basis, headline inflation accelerated to +3.7% in September from +3.4% in August, stronger than expectations of +3.6%. Also, the core CPI, which excludes volatile food and fuel prices, rose +0.3% m/m and +2.6% y/y in September, above expectations of +0.2% m/m and +2.5% y/y.

Chicago Fed President Austan Goolsbee described September’s unexpectedly hot inflation report as “discouraging” but indicated that he would prefer to see more data before moving to raise interest rates further. “We need to get more data. We need to get the through line. If the through line on inflation is this 4% core inflation, then that’s not acceptable. That’s not compatible with the Fed target, and our policy needs to address that,” Goolsbee said in an interview with Yahoo Finance.

The Fed said on Wednesday in its Beige Book survey of regional business contacts that U.S. economic activity expanded at a slight to moderate pace across most districts in recent weeks, while inflationary pressures intensified in some districts. Half of the 12 Fed districts reported robust or intensifying price pressures as rising energy costs filtered through local economies, according to the Beige Book. “Firms reported elevated diesel prices and noted that fuel surcharges were passing on increased costs throughout the supply chain,” the report said.

U.S. rate futures are currently pricing in a 70.7% probability of no rate change and a 29.3% probability of a 25-basis-point rate hike at the October FOMC meeting.

Third-quarter corporate earnings season is gathering pace, and investors are looking ahead to new reports today from notable companies such as Charles Schwab (SCHW), Prologis (PLD), Bank of New York Mellon (BNY), U.S. Bancorp (USB), and PNC Financial (PNC). According to Bloomberg Intelligence, S&P 500 companies are expected to post an average +25% jump in third-quarter earnings from a year earlier. 

Meanwhile, Fed Chairman Kevin Warsh is scheduled to appear in a fireside chat with International Monetary Fund Managing Director Kristalina Georgieva later today at the 2026 Annual Meetings of the Boards of Governors of the IMF and World Bank Group. Market participants will look for clues on the interest-rate outlook, especially after Wednesday’s hotter-than-expected inflation report, though Warsh has generally been reluctant to provide forward guidance. Cleveland Fed President Beth Hammack is also set to speak today.

On the economic front, all eyes are on the U.S. producer price index, which is set to be released in a couple of hours. Economists forecast that the U.S. September PPI will rise +0.6% m/m and +5.3% y/y, compared with the prior month’s readings of +0.4% m/m and +5.4% y/y. The core PPI, which excludes volatile food and energy costs, is expected to rise +0.3% m/m and +4.4% y/y in September, compared with +0.2% m/m and +4.6% y/y in August.

U.S. retail sales data will also be in focus today. Economists project that retail sales will show a +0.3% m/m increase in September after a +1.2% m/m gain in August. Core retail sales, which exclude motor vehicles and parts, are estimated to rise +0.6% m/m in September after climbing +1.4% m/m in August.

U.S. initial jobless claims data will be released today. Economists expect applications for U.S. unemployment benefits to come in at 199K in the week ended Oct. 10, compared with 197K in the prior week.

The U.S. Philadelphia Fed manufacturing index will come in today. Economists anticipate that the Philly Fed manufacturing index will stand at 28.2 in October, compared with last month’s figure of 37.8.

The New York Fed’s Empire State manufacturing index will be reported today. Economists project the October figure to come in at 12.1, compared with 7.6 in September.

The EIA’s Weekly Petroleum Status Report will be released today as well. Economists expect crude oil inventories to increase by 0.2 million barrels in the week ended Oct. 9, compared with a decrease of 3.2 million barrels in the prior week.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 5.08%, down -1.99%.

The Euro Stoxx 50 Index is down -0.61% this morning as the global selloff in AI-related stocks continued, sapping investors’ appetite for risk. Chip-related stocks tumbled on Thursday. Mining stocks also slumped, weighed down by a post-earnings drop of more than -6% in Antofagasta (ANTO.LN) and falling metal prices. At the same time, food & beverage and insurance stocks climbed, helping to limit losses in the broader market. Data from Eurostat released on Thursday showed that Eurozone monthly industrial production unexpectedly fell in August amid persistent concerns about energy prices as the Middle East conflict continued to escalate. Separately, data showed that the U.K. economy grew again in August, supported by the AI investment boom. In addition, final data showed that France’s annual inflation rate accelerated more than initially estimated in September. Meanwhile, Eurozone government bond yields fell sharply on Thursday as the global tech rout drove investors toward safe-haven assets. In corporate news, Ericsson (ERICB.S.DX) climbed over +9% after the telecommunications equipment maker reported better-than-expected Q3 results.

U.K. GDP,  France’s CPI, and Eurozone’s Industrial Production data were released today.

U.K. August GDP rose +0.1% m/m and +2.1% y/y, stronger than expectations of -0.1% m/m and +1.7% y/y.

The French September CPI fell -0.3% m/m and rose +3.1% y/y, compared with expectations of -0.3% m/m and +3.0% y/y.

Eurozone’s August Industrial Production fell -0.5% m/m and -1.1% y/y, weaker than expectations of no change m/m and -0.1% y/y.

Asian stock markets today settled in the red. China’s Shanghai Composite Index ($CHSC) closed down -1.59%, and Japan’s Nikkei 225 Stock Index ($NKY) closed down -4.90%.

China’s Shanghai Composite Index closed lower today, hitting a 14-month low as the global selloff in technology stocks weighed on sentiment. Tech shares led the declines on Thursday, tracking losses among regional peers. The prospect of renewed trade tensions between China and the EU also dampened sentiment. Following last week’s deal to curb Chinese car exports, Brussels is already weighing trade measures targeting other industries, including furniture and scooters, while Germany reportedly plans to press the EU for restrictions on chemicals, mechanical engineering products, and potentially pharmaceuticals. Meanwhile, a senior International Monetary Fund official said on Thursday that China needs to introduce more substantial fiscal stimulus as its economy remains on the brink of deflation. “We welcome the fiscal support China has provided to the economy. But in our view, it is quite limited in size and scope,” according to Krishna Srinivasan, director of the IMF’s Asia and Pacific Department. Elsewhere, China’s long-dated bond yields fell to their lowest levels in 15 months on Thursday as continued central bank liquidity injections drove borrowing costs lower, with traders turning their attention to a major financial forum next week for clues on the monetary policy outlook. China’s third-quarter gross domestic product figures, due early next week, will also be in focus. 

Japan’s Nikkei 225 Stock Index closed sharply lower today, tracking the overnight tech-led selloff on Wall Street as hotter-than-expected U.S. inflation data collided with concerns about AI-related debt. Semiconductor and other AI-related stocks tanked on Thursday, extending the unwinding of this year’s powerful rally in the AI trade. Chip-testing equipment maker Advantest cratered nearly -15%, memory-chip maker Kioxia Holdings tumbled over -12%, and tech investor SoftBank Group slumped more than -9%, weighing heavily on the Nikkei. The benchmark posted its biggest daily percentage drop since March. Meanwhile, Japanese government bonds rallied on Thursday, pushing yields sharply lower as the equity selloff drove some investors toward the safety of government debt. On the economic front, data showed that Japan’s monthly core machinery orders, a gauge of future business investment, rose more than expected in August, driven by strong AI-related demand and sizable orders from nonferrous metal producers. Elsewhere, Bank of Japan board member Junko Koeda said on Thursday that the central bank should not be excessively cautious about raising interest rates amid considerable upside risks to inflation. In corporate news, Ryohin Keikaku jumped over +9% after the Muji owner posted a 50% increase in full-year net profit and forecast record operating revenue and operating profit for fiscal 2027. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +28.62% at 36.13.

The Japanese August Core Machinery Orders rose +5.2% m/m and +18.6% y/y, stronger than expectations of +2.2% m/m and +15.7% y/y.

The Japanese August Industrial Production was revised lower to -2.4% m/m from the preliminary reading of -1.7% m/m.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks slumped in pre-market trading. Sandisk (SNDK) was down over -4%, while Micron Technology (MU) and Intel (INTC) each fell more than -3%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - October 15th

The Charles Schwab Corporation (SCHW), Prologis (PLD), The Bank of New York Mellon Corporation (BNY), U.S. Bancorp (USB), The PNC Financial Services Group (PNC), Marsh & McLennan Companies (MRSH), Interactive Brokers Group (IBKR), J.B. Hunt Transport Services (JBHT), Wise Group (WSE), First Horizon (FHN), Alcoa (AA), Commercial Metals Company (CMC), Independent Bank (INDB), Cohen & Steers (CNS), Simmons First National (SFNC), ManpowerGroup (MAN), WaFd, Inc. (WAFD), Westamerica Bancorporation (WABC), Bank7 (BSVN).

On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.