LIVE MARKETS-When the chips are down: AI worries drag Nasdaq, S&P 500 lower

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WHEN THE CHIPS ARE DOWN: AI WORRIES DRAG NASDAQ, S&P 500 LOWER

Wall Street seemed determined to extend its selloff on Thursday as AI-related fervor — which has fueled much of the stock market's gains over the last year or so — took a step back.

Once again, the Nasdaq .IXIC was dragged lower by chips .SOX, which tumbled 4%, while the S&P 500's .SPX decline was more modest. Both indexes are on track to log their fourth consecutive down day. The Dow .DJI was decisively higher.

On the sector level, homebuilders .SPCOMHOME, housing .HGX and consumer staples .SPLRCS were clear winners in the session's opening minutes, while industrials .SPLRCI joined tech .SPLRCT at the bottom of the heap.

Worries over the mounting debt to fund AI-related expenditures have sent tech default insurance to record highs, particularly as the cost of borrowing continues to climb. These jitters are exacerbated by hotter-than-expected inflation data, which could impel the US Federal Reserve to tighten policy and drive interest rates even higher.

Speaking of inflation data, the Labor Department's PPI report arrived red-hot, blasting past analyst expectations and increasing the likelihood that Warsh & Co will implement a December rate hike, according to CME's FedWatch tool.

A stronger-than-expected retail sales print offered convincing evidence of US consumer health, suggesting the economy is sturdy enough to withstand the monetary policy tightening necessary to rein in inflation.

Front month WTI crude futures were driven higher by supply concerns arising from Iran's precision strikes and Tehran-backed Houthi attacks on Saudi Arabia. Brent futures, , on the other hand, dipped on potential US steps to ease sanctions on some of Russia's unregulated tankers.

After the bell, earnings from trucking and logistics firm J.B. Hunt JBHT.O could shed light on the extent to which goods movers are affected by soaring diesel prices.

Fed Chair Kevin Warsh is in Bangkok, and will participate in an IMF fireside chat which will air at 11:30 p.m. ET.

Here's where things stood at 09:53 a.m. ET:

(Stephen Culp)

EARLIER ON LIVE MARKETS:

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LUXURY: BEAR-MARKET RALLY AHEAD? CLICK HERE

ON SECOND THOUGHTS, EUROPE IS A HIDING PLACE CLICK HERE

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MARKET PICKS COREWEAVE AS AI ROUT DEEPENS CLICK HERE