AI Stocks Struggle as the Rest of the Market Holds Up

Remy Blaire: And with midday trade underway, let’s go out to Chicago. FINTECH.TV correspondent Mark Payton joins us live from the Cboe trading floor. Good afternoon to you, Mark. What activity are you following in midday trade today?

Mark Payton: Hey, Remy. We’re seeing a pretty interesting split in the market today. The Dow is moving higher, and the S&P 500 has been recovering from its earlier losses. But the Nasdaq is still under pressure, with technology stocks leading declines. And much of that weakness is coming from companies tied to artificial intelligence. Nvidia, AMD, and Micron are some of the names getting hit as investors question the large amount of money being spent on AI infrastructure and how quickly those investments will pay off.

And this morning’s inflation report is adding to those concerns. Wholesale prices jumped 1.3% in September, more than double what economists expected, and compared with a year ago, wholesale prices are up 6.3%.

Also, here at Cboe, we’re keeping an eye on the VIX, especially after yesterday’s jump of more than 10%. Investors are watching whether volatility stays elevated as the market tries to stabilize. Meanwhile, the 10-year Treasury yield is down as investors buy government bonds. So the interesting story today is that even with pressure on big AI names, other parts of the market are holding up better, Remy.

Remy Blaire: Yeah, we’ll continue to keep an eye on all asset classes. But as you mentioned, the S&P 500 is erasing earlier losses, and the VIX is retreating below the 17 level. But looking at Polymarket, where do prediction markets think the S&P will close out this trading session today?

Mark Payton: Yeah. Traders on Polymarket are betting on where SPY, the ETF that tracks the S&P 500, will close today. And with technology stocks under pressure, those expectations have been moving. Right now, traders are pricing in about a 99% chance that SPY closes above $760. That drops to around 95% for a close above $765, and 60% for a close above $770.

What’s interesting is that the probability of finishing above $775 is just 8%. So traders are showing a lot more confidence in those lower price levels, with much less certainty about a stronger finish. And after the hotter-than-expected inflation reports and continued pressure on technology stocks, prediction markets give us another way to see how traders are positioning themselves heading into the closing bell.

Remy Blaire: And speaking of the closing bell, we are less than four hours away, so we’ll keep an eye on those levels. Thank you so much for joining us, Mark.

Mark Payton: Thank you.