U.S. stocks reversed early gains on Friday, as softer-than-expected wholesale inflation failed to sustain the rally and news involving Nvidia-linked servers added pressure to technology shares. AMD fell 10.5%, while the Nasdaq 100 dropped 1.7%, as investors pulled back from chip stocks after several days of concentrated buying. AMD lost about $100 billion in market value intraday. Market data below is from around midday Eastern time.
AMD gives back part of its rally as chip stocks slide
AMD traded at $524.11 after falling as much as 10.5%, putting it on track for its worst session since November 5. The stock had gained nearly 45% over the previous five trading days; Friday's decline erased about a third of that advance. Nvidia fell 3.3% to $160.69, with investors also looking ahead to its results due Tuesday. The report will be the company's first since Jensen Huang stepped down.
Semiconductors broadly weakened. The VanEck Semiconductor ETF fell 4.1%, while a technology-sector ETF lost 2.7%. AI hardware names also declined: Dell dropped 8.4%, and Coherent and Fabrinet each fell 8.3%. Applied Digital and IREN were both down more than 8%. The selling extended beyond chip designers to server, optical communications and data-center companies.
Server report puts Nvidia and Dell supply chains in focus
A report about server sales and installation locations drew attention to the supply chain for Nvidia chips. It said 22 Dell-built servers equipped with restricted Nvidia H800 chips were sold to Singapore-based Aperia Cloud Services and later installed at a data center in Shanghai. The facility is linked to a company founded by Alice Huang.
The report prompted further scrutiny of the buyers and end uses of chip-equipped servers. Public information has not established whether Nvidia knew who the servers' end customer was.
Major indexes close lower, defensive shares hold up
The S&P 500 fell 0.75% to 7,535.54. The Dow Jones Industrial Average slipped 0.09% to 52,249.39, the Nasdaq 100 lost 1.73% to 27,800.79, and the Russell 2000 declined 0.66% to 2,780.46. The Nasdaq 100 shed 488 points, underperforming the Dow as large-cap technology and growth stocks came under greater pressure. The Cboe Volatility Index rose 6% to 19.83.
Consumer staples gained 1.3%, making the sector one of the day's stronger performers. Communication services, financials and utilities edged higher, while industrials, consumer discretionary and materials fell. Cisco dropped 6.4%, wiping about $26 billion from its market value. The company reported record first-quarter revenue and raised its fiscal 2027 outlook, but investors focused on a 250-basis-point narrowing in adjusted gross margin.
Monthly inflation slows, but longer-term Treasury yields rise
The U.S. final-demand producer price index rose 0.3% month over month in October, below the 0.4% consensus estimate and September's 1.4% increase. The annual gain, however, reached 6.5%, the highest since November 2022. The combination of slower monthly growth and still-elevated annual inflation did not prevent stocks from turning lower after the open.
The Treasury yield curve steepened. The 10-year yield rose 3 basis points to 5.14%, and the 30-year yield gained 4 basis points to 5.47%. The 2-year yield slipped 1 basis point to 4.85%.
Elsewhere, gold was little changed at $3,885 an ounce, while silver fell 2.1% to $49.02. Bitcoin dropped 3.4% to $68,984, moving back below $70,000. WTI crude slipped 0.2% to $88.54 a barrel, while Brent was little changed at $95.82.
Earnings and deal talks drive divergent stock moves
Nu Holdings rose 11.3% after reporting record third-quarter net income of $1.1 billion, up 31% year over year. Revenue came in at $5.82 billion, ahead of the $5.68 billion estimate, while earnings per share of 22 cents matched expectations. Modine Manufacturing jumped 30.7% after reports that Samsung Electronics was in talks to acquire the data-center cooling equipment maker.
Payment stocks also advanced: Shift4 Payments gained 6.3%, and Toast and Global Payments rose as well. Cisco was weighed down by narrower margins, while AI-related hardware shares broadly fell amid the supply-chain news and a pullback across technology stocks. Friday's moves showed a sharp split between individual stocks supported by results or deal reports and the chip and AI infrastructure names giving back some of their recent, rapid gains.