Hot PPI. Cooler yields. Dow +556.

Good morning. The Dow jumped 556 points, or 1.1%, to 52,177.69 Thursday as investors sold AI-hardware stocks and bought health care and consumer names, even after wholesale prices posted their biggest yearly gain since 2022 (CNBC; BLS). Overnight, S&P 500 futures are up about 0.1%, Seoul's Kospi closed up 2% after Thursday's 7.6% plunge, Fed Chair Kevin Warsh gave no hint on an October hike, and Bitcoin is near $82,100.

Stocks, VIX and yields are Thursday's close. Futures, oil and gold as of ~3:38 AM ET Friday vs. Thursday's settle. Crypto as of ~3:48 AM ET Friday, vs. its 24-hour open. Nikkei and Kospi are Friday's closes. Stoxx 600 is Friday's session, live as of ~3:32 AM ET.

One-line read: A calm night after a busy Thursday; futures are barely higher, Asia's chip stocks bounced, and the Fed chair gave nothing away on rates.

The S&P 500 rose 0.33% to 7,744.06 Thursday, snapping a three-day losing streak, and the Nasdaq edged up 0.08% to 26,713.03 after being down 1.4% at its low (CNBC). The money came out of AI hardware and went almost everywhere else. Eli Lilly gained 3.5%, UnitedHealth 2.8% and Walmart 1.5% after Deutsche Bank upgrades, and those three were heavy contributors to the S&P 500's gain (Reuters; Yahoo Finance). Nike rose 5.2%, Home Depot 4.3% and Sherwin-Williams 3.8%, leading the Dow (WSJ; Yahoo Finance). Server makers Dell and Hewlett Packard Enterprise fell 6.8% and 7.1%, adding to Wednesday's losses on worries about AI companies whose debt loads leave them exposed to rising rates (Reuters; Yahoo Finance).

The numbers: Eight of the 11 S&P 500 sectors rose, led by health care, up 1.84%, and materials, up 1.71% (Reuters). Rising stocks outnumbered falling ones 3.1 to 1 in the S&P 500, on heavy volume of 20.7 billion shares vs. a 20-day average of 17.6 billion (Reuters). For the week so far, the Dow is up 1.0%, the S&P 500 is down 0.9% and the Nasdaq is down 2.4% (Yahoo Finance). The Russell 2000 of small companies rose 1.4% to 2,767.27, a day after closing 11% below its Aug. 14 record, the usual definition of a correction (CNBC; Yahoo Finance).

Why it matters: The S&P 500 is still up about 13% in 2026, and most of that gain came from AI-related stocks (Reuters). That makes an S&P 500 fund more of an AI bet than its name suggests. "It's not are you in or out of AI; it's how concentrated you want to be," Alex Shahidi of MAI Capital Management's Evoke told CNBC. Thursday was a reminder that the same fund holds both sides of a rotation. Same index, different winners.

What to watch: Travelers reports before the open, with its call at 9:00 AM ET (Travelers), and Citizens Financial also reports before the bell (CNBC). The S&P 500 needs to gain about 0.9% today to avoid a losing week (Yahoo Finance).

The producer price index for final demand rose 1.3% in September and 6.3% from a year earlier, its biggest monthly gain since March 2022 and biggest yearly gain since December 2022 (BLS). Economists polled by Dow Jones expected 0.6% and 5.5% (CNBC). Energy did most of the work: goods prices rose 2.6%, the most since the series began in 2009, and gasoline jumped 20.3% (BLS). Separately, retail sales rose 0.8% vs. 0.4% expected, but only about 0.2% excluding autos and gas stations, and those figures are not adjusted for inflation (Census Bureau; CNBC). Weekly jobless claims were 199,000, vs. 198,000 the week before (Labor Department via FRED). Bonds rallied anyway: the 10-year Treasury yield fell 9 bp to 5.10%, its lowest close since Sept. 22, and the 2-year fell 5 bp to 4.77% (US Treasury). Bets on an October hike were tempered after San Francisco Fed President Mary Daly signaled no need to act at the Oct. 27–28 meeting (Reuters). "I don't feel urgent that we have to decide with a limited set of information," she told Reuters on Wednesday, while adding that more hikes are "more likely than not." Fed funds futures now put about a 15% chance on a hike at the Oct. 28 meeting and about 89% on a higher target by the Dec. 9 meeting (CME FedWatch, as of ~3:38 AM ET).

Why it matters: The Fed's target is 3.75%–4.00% (Federal Reserve). Lower Treasury yields ease the rates behind mortgages and lift bond-fund prices, while hotter inflation keeps another hike on the table.

The PHLX Semiconductor Index slipped 0.9% to 11,581.21, its seventh straight loss and down 12.4% over the streak (Reuters; Yahoo Finance). The iShares Semiconductor ETF fell for an eighth day, its first eight-day slide since September 2015 (CNBC). TSMC, which makes chips for Nvidia and Apple, posted a record quarterly profit of NT$763.06 billion ($23.59 billion), up 68.7% from a year ago and above the LSEG SmartEstimate, and raised its 2026 growth forecast to about 44% (TSMC; Reuters). But CEO C.C. Wei said "we are being prudent in our business planning going into 2027," citing rising component prices and economic uncertainty (TSMC earnings call). TSMC's US shares fell 1.8%, as did Nvidia (Yahoo Finance). Memory makers fell on worries about a future glut: Seagate lost 3.2% and Western Digital 2.1%, and Elon Musk posted that "China will be making a LOT of RAM in 2028" (CNBC; Yahoo Finance). AI's growth math is under the microscope, too: Anthropic, still private, told investors its third-quarter revenue reached $16.8 billion, up 45% from $11.6 billion in the second quarter, after more than doubling the quarter before, according to people familiar with the matter (CNBC). Overnight, Asia bounced: Samsung closed up 2.6% and SK Hynix 0.8% in Seoul, where the Kospi rose 2.0%, and the Nikkei rose 1.4% (Yahoo Finance; CNBC).

Why it matters: Nvidia, Broadcom and Micron are all S&P 500 members, so a seven-day chip slide reaches any S&P 500 fund, not only tech funds.

Fed Chair Kevin Warsh declined to signal whether the Fed will raise rates again this month, speaking with IMF Managing Director Kristalina Georgieva at the IMF and World Bank meetings in Bangkok overnight. "I don't prejudge meetings," he said (CNBC). He added that a surge of investment that "isn't just AI" is giving the US economy "plenty of tailwinds" (Reuters). Traders pared bets on a hike after his comments (Bloomberg). Before the bell come September import and export prices at 8:30 AM ET (BLS) and industrial production at 9:15 AM ET (Federal Reserve).

Why it matters: The Fed meets Oct. 27–28, and every remark from the chair between now and then can move the odds of a hike, and with them mortgage and savings rates.

AI hardware sank this week. Everyday names rose. For context, this is four sessions, from last Friday's close to Thursday's. Notice the gap: Hewlett Packard Enterprise and Dell lost about a fifth of their value, while UnitedHealth, Nike, Eli Lilly, Home Depot and Walmart each gained about 6% to 7%, and the Dow finished the stretch higher while the Nasdaq did not.

Source: daily closes via Yahoo Finance, Oct 9 and Oct 15, 2026. Stocks selected as the biggest names in Thursday's rotation coverage (Reuters, CNBC, WSJ), not a ranking of the week's best and worst performers.

The consumer price index (CPI) tracks what households pay at the register. The producer price index (PPI) tracks what US businesses receive for what they sell, including to other businesses, so it catches costs earlier in the chain. Think of CPI as the price on the menu and PPI as the restaurant's grocery bill. In September the grocery bill rose much faster: PPI was up 6.3% from a year earlier vs. 3.7% for CPI (BLS via CNBC). Energy explains much of the gap. More than 80% of September's jump in goods prices came from energy, which rose 10.8% in the month (BLS). A bigger grocery bill doesn't always reach the menu right away, but it squeezes the restaurant's margin in the meantime.

That's the desk. See you Monday at 6 AM ET.

— The Overnight Desk Team

Note: The Overnight Desk Team may hold positions in assets discussed. Nothing here is investment advice. · Sponsor: No one paid for any mention in this issue.