Semiconductor index jumps 6.9% as oil falls and inflation fears ease

Key Facts

The Philadelphia Semiconductor Index jumped 6.9% on Monday, November 9, after falling more than 12% during the previous week, according to Reuters. The rebound came as lower oil prices helped ease inflation concerns and support U.S. stocks, the Associated Press reported. The sector’s advance was part of broader gains on Wall Street, with the Dow Jones rising 2.15%, the S&P 500 gaining 2.35% and the Nasdaq Composite adding about 2.74%. The S&P 500 extended its gains for a second consecutive day, according to the Associated Press. But the move within the chip sector was uneven, with some companies’ shares advancing while others fell amid mixed performance among the biggest names.

Broadcom and AMD were the biggest contributors to the semiconductor index, with their shares rising 8.8% and 13.3%, respectively, according to Reuters. AMD’s shares thereby recouped their 11% loss from the previous week, the Associated Press reported. Nvidia, by contrast, fell 4.2% and closed at its lowest level since April 7, in a session when the index surged. Reuters said Nvidia was the only declining stock in the index. The agency reported that investors questioned the future of its chief executive after an internal investigation into possible targeting by a foreign intelligence service. The divergence showed that the index’s rebound was not a synchronized recovery across all AI-related stocks.

Brent crude fell 5.8% to $92.57 a barrel on November 9, according to the Associated Press. The agency linked the oil decline to easing inflation concerns, which supported U.S. stocks during the session. Crude had fallen from more than $112 a barrel at the start of the month amid uncertainty over developments in the war with Iran. The Associated Press quoted President Donald Trump as telling CNN over the weekend that resuming strikes was “extremely unlikely” if the United States made progress in negotiations. Secretary of State Marco Rubio described some Iranian demands as “outrageous and ridiculous,” the agency reported. It also noted that U.S. Treasury yields remained relatively stable after large moves the previous week.

The gains followed a week of pressure on technology and AI stocks. Reuters said investor concerns about potential regulations following the Democrats’ midterm election victory weighed on shares. The agency noted that analysts at Morgan Stanley and UBS viewed the sell-off in AI stocks as excessive. Jefferies analysts saw the November 5 decline as a “reaction,” rather than a fundamental reassessment, while UBS analysts said the market had been overly pessimistic about political, credit and AI-related spending risks. Morgan Stanley said the potential impact of regulatory concerns could be to defer some projects from 2028 to 2029, “rather than derail the capital-spending trajectory.” The Associated Press added that concerns about a slowdown in AI data center construction were among the reasons for the previous sell-off.

The U.S. jobs report showed that 165,000 nonfarm jobs were added in October, exceeding economists’ estimate of 65,000, according to Reuters. The agency said the strength in employment reinforced expectations of a rate hike at the Federal Reserve’s December meeting, with the probability of an increase exceeding 80% according to the CME FedWatch tool on November 9. In separate remarks, Richmond Fed President Tom Barkin said the central bank should move “carefully” as it determines its response to inflation. The U.S. consumer price index had previously risen a seasonally adjusted 0.6% in September from a month earlier and 3.7% from a year earlier. Excluding food and energy, the index rose 0.3% month over month and 2.6% year over year. Investors therefore turned their attention to the October reading as the next indicator of the trajectory of prices and monetary policy.

The U.S. consumer price index for October was scheduled for release on November 10 at 8:30 a.m. Eastern time, according to the U.S. Bureau of Labor Statistics. The bureau also scheduled the October producer price index for November 13, and the October import and export price indexes for November 17. Nvidia is due to report quarterly results after the market close on November 17, according to Reuters. Analysts expected its data center revenue to rise more than 12% quarter over quarter in the upcoming report. These upcoming releases put inflation data and major technology companies’ results at the forefront of what investors are watching after the session’s rebound. December rate expectations remain tied to their assessment of price and employment data.