AI spending concerns overshadow steady economic data
SPY•SPY•SPY•SPY•S&P 500 futures fell about 0.3% as concerns about AI investment costs outweighed mostly in-line inflation data. Third-quarter GDP grew 3.4%, above estimates, while initial jobless claims were 194,000.
S&P 500 futures were down about 0.3% after economic releases trimmed some losses. Futures had come under pressure after Alphabet's earnings revived concerns about AI spending.
September headline PCE rose 0.5% month over month and 3.6% year over year, both in line with estimates. Core PCE rose 0.3% on the month and 3.1% from a year earlier. Third-quarter GDP growth was 3.4%, topping the 3.2% estimate, and initial jobless claims were 194,000, below the 198,000 estimate. Traders continued to see an 83% chance of a 25-basis-point rate hike at the Fed's December 8-9 meeting.
The 10-year Treasury yield was around 5.00%. Healthcare shares gained more than 2%, while communication services fell 1.8%, weighed down by Alphabet's decline of more than 10%. The SPDR Regional Banking ETF rose roughly 0.7%, while the PHLX Semiconductor ETF fell 2%.
