The US stock market’s longest streak of tranquility since before the Covid-19 pandemic is over.
Concerns about the sustainability of the artificial-intelligence trade coupled with a report showing the fastest increase in consumer prices since April pushed the S&P 500 Index down 1.1%. That ended the gauge’s 53-session streak without a 1% decline, the longest stretch since January 2020. The sharp reversal in momentum vexed computer-driven quant funds, which have spent weeks snapping up stocks amid a steady lull in volatility.
Weakness in technology megacaps that have fueled the four-year bull run in the S&P 500 added to the risk-off tone across markets, fueling worries that more losses could be in store for the benchmark gauge that’s added $13 trillion in market value since late March. A closely watched index of semiconductor stocks fell for a sixth consecutive day, extending its drop during that time to almost 12%.
S&P 500 futures were little changed as of 6:02 a.m Hong Kong time, while those tracking Nasdaq 100 fell 0.1%.
“Some of the more extended stocks, such as the chipmakers and AI-infrastructure stocks, are having some of the wind taken out of their sails,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, adding that the inflation numbers fueled concern about more interest-rate increases by the Federal Reserve. “The market was hoping September would be a one and done and this morning’s data makes that scenario much less likely.”