Tech Shares Drop

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Rob Black (0:12)

Thursday, October 15th, 2026

SP 500's up fractions. Dow Jones Industrial Average up almost 1%. The Nasdaq is down one third of 1% because the S&P 500 is heavily weighted with Magnificent 7, i.e. tech stocks. Thus, the S&P 500 is pushing sideways while the Dow is higher, telling you that there's a more broadening of the market away from tech stocks. Not a bad thing. We're also 2,000 up 1%. 10-year treasury sits at 5.09%. That's a big move. It's almost one that I have to double check and make sure I'm reading that right. Yep. Down 10 basis points. A little bit of relief for the markets. For sure, in that area, gold up 67 bucks to $4,175 an ounce. Bitcoin is up 828 Cruz to $82,373.

Oil is climbing about 2% today. Some headlines around the world. The AI trade route is sparking flight to treasuries as bond yields sink. People are really questioning the bank of NVIDIA and AMD as this is our alternative for growing the AI world. And it is. Financing's hit hard. CoreWeave stock is panicking. If you were to take a look at why, it's because they're borrowing a lot of money and now they're having to borrow money at much higher costs going forward. So, the safer AI play is to try to stay away from companies with massive amounts of debt and poor cash flow. Underline the phrase poor cash flow. Because you have to service that debt. I don't have a problem at this point in time with how Alphabet, Apple, Sandisk, Micron, Meta, Microsoft, Amazon are able to service their debt. After that, it brings in the questions to the point that I don't specifically own Oracle. I want to, but I see a path where it could get cloudy on servicing their debt. But I'm already digressing away from my content, and that's okay. It's part of the show. Hey, you have an extra $6 to $9 million laying around? I do. I kind of have that money if I need it. It wouldn't take me too long to raise. What would I be able to buy? A 70% complete nano-tyrannus skeleton? I don't even know what a nano-tyrannus skeleton is, other than it's clearly a dinosaur. I'm not paying $6 to $9 million for an arm, a leg and a jaw, nope.

Interesting tech story that we are seeing some improvements in the world that we don't talk about at times. There's a company called ICON. They announced a $200 million in financing for multi-story 3D construction that promises to cut home building time, the number of workers needed and reduce costs by 40%. That's what we want to hear. That's efficiency.

And to say that I like it a lot would be an understatement. The Russell 2000 is down 11% from its all-time high, while the S&P 500 is just 1% from its record all-time high.

Higher for longer interest rates are starting to show up in stocks. You're seeing that we're going to have higher for longer. The money in the S&P 500 is not reacting, but the interest rate is sensitive, where it would hurt if we were higher for longer. Russell 2000, small cap companies, they need borrowing more so than large cap companies, again, cash flow. So the AI trade is under pressure again after yesterday's brutal sell-off. Inflation is still running hot. This morning's wholesale producer price index coming in way above expectations. The geopolitical problems in the Middle East and the Russian-Ukraine war, all issues that we're dealing with and none of them are, how shall we say, a tailwind, they're all headwinds. Today, we're seeing the AI trade continuing to unwind, pronounced selling across semiconductor stocks. There's a safe haven flight to treasuries, sending yields firmly lower. Some rates instead of stocks are benefiting. The broader market is posting solid gains. Inflation concerns remain prevalent, following a hotter than expected report.

Taiwan's semiconductor manufacturer down 2.4%. I'll talk more about that in just a moment. So, the 10 years currently sitting at 5.06%, which is remarkable considering it hit 5.3% yesterday. You don't see moves that much of a drop that often. It's quite rare. But the Asian market last night told us tech was going to be tough this morning. The Nikkei fell 4.9%. South Korea's KOSPI, which is heavily skewed towards two semiconductor names, down 7.6%. It's down 16.2% for the week and down 21%, meaning a technical definition for a bear market from its high that it reached on October 6th. I think of October 6th, I'm like, holy mackerel, that was nine days ago. Down 20% in nine days. Yes, it can happen. So CoreWeave is down 20% for the week. Bloomberg reported that its unsecured debt due in 2032 is trading at levels that typically indicate distress. That's not a good thing. Again, the fringes and frothiest parts of the AI trade, they're vulnerable. Please note, and again, the bank of NVIDIA, people get quite angry when one of their investments fails, spectacularly fails. NVIDIA CEO Jensen Wang says CoreWeave's strength is improving and he doesn't think a financial backstop is necessary. So he's out there defending one of the companies that he has invested in. eBay is interestingly trading at an all-time high. Extending its recent momentum with shares climbing. This week's strength follows positive analyst call from Morgan Stanley, which named eBay a top pick. Shares have been strong throughout much of the year, supported by improving marketplace fundamentals and accelerating growth across several strategic initiatives. eBay is focused driving growth across its focus categories, including collectibles, motors, fashion, refurbished.