Major indices are retreating this afternoon with the Russell 2000 declining the most. The S&P 500 is seeing its worst day since the July 29^th meeting.

All the bellwether industries are lagging today with Technology (XLK) as the worst performer driven by losses in semiconductor names. On the other hand, there is strong leadership from Health Care (XLV) driven by strong gains from Eli Lilly (LLY), Johnson & Johnson (JNJ), and AbbVie (ABBV).

There is an aggressive rotation out of growth stocks and into safer stocks like retail and dividend names.

Nvidia (NVDA) launched new CUDA-X AI tools to accelerate manufacturing, factory automation, and semiconductor design. The company’s capabilities extend beyond powering AI data centers to now transforming how semiconductors themselves are manufactured and designed.

Rate Hike

Following this morning’s CPI, prediction markets now see a 55% chance of a 25-basis-point Fed hike in October, up from 21% earlier in the week.

Anthropic

Today Anthropic is meeting prospective investors in preparation for its IPO. Since the summer, the price of its AI tokens has roughly halved. The Street is wondering if usage volumes are growing fast enough to offset falling prices.

Moreover, the competition at the frontier tier is incredibly tight. Anthropic’s Claude Opus 5.5 currently has the top spot; however, the recent release Muse Wonder is catching up.