Tech Alone Drags the S&P 500 Lower at Midday While Energy, Utilities and Staples Rise, as Chipmakers Near a $2 Trillion Weekly Wipeout

Technology is dragging the S&P 500 lower at midday on Friday, Oct. 16, even though most of the market is rising. The index was down 0.62%, roughly 48 points from Thursday’s close of about 7,744, with technology off 1.67% and communication services off 1.54%. Energy, utilities, consumer staples and financials were all higher. The split points to a rotation out of crowded AI and chip trades, not a broad sell-off. All figures are midday readings and can change by the close.

Why one sector can sink the index

Technology makes up nearly 38% of the S&P 500, so a 1.67% drop in the sector subtracts about 0.63 percentage points from the index on its own, slightly more than the index’s entire 0.62% decline. Communication services, which houses Alphabet and Meta, adds further drag. Everything else combined is net positive, which is why the index is down only modestly while the tape looks healthy underneath.

Breadth: strong underneath, weaker than at the open

About 55% of S&P 500 stocks are advancing even with the index lower. That is a deterioration from the open, when nearly four in five stocks were rising and ten of the 11 sectors were higher, so the technology decline has widened as the session went on. Defensive groups are doing the work: Health care funds hit record highs at the open, and the Dow was trading at a one-month high late in the morning, helped by gains in JPMorgan and Goldman Sachs.

Chips: a near-$2 trillion week

Semiconductors remain the center of the selloff. Reuters estimated that U.S. chipmakers were on track to lose nearly $2 trillion in market value this week, after an earlier tally of roughly $1.64 trillion over six sessions through Thursday. The Philadelphia Semiconductor Index was down about 1.8% in late-morning trading. The iShares Semiconductor ETF (SOXX) was heading for a ninth straight daily decline at the open, which would be its longest losing streak since 2006. Micron (MU) fell about 2.6% in premarket trading, and AMD and Sandisk have also been among the weakest names. We do not have verified midday prices for individual chip stocks, so check live quotes.

Why money is rotating

Three pressures are feeding the move. First, rates: hot September CPI and PPI readings pushed expectations toward more Fed hikes, and Fed Chair Kevin Warsh gave no clear signal on timing in remarks in Bangkok. Markets still see an 85% chance the Fed holds at its October 27–28 meeting, according to CME FedWatch. The 10-year Treasury yield has eased to about 5.1% from 5.2%–5.3% earlier in the week, but that is still near multi-decade highs.

Second, AI financing. Investors are worried that data center operators may not become profitable fast enough to repay their debt as borrowing costs rise. CoreWeave (CRWV) fell as much as 7.6% on financing concerns even after rebounding almost 6% on Thursday following upbeat comments from Nvidia CEO Jensen Huang, and reports that some Anthropic IPO investors are weighing a lower valuation added to the unease.

Third, positioning. After a year of heavy gains, AI infrastructure is a crowded trade, so a few bad data points can trigger sharp selling without any change in the underlying demand story.

Other moves we are watching

These are premarket readings, so midday moves may differ.