10/06 U.S. stocks close mixed with Nasdaq-focused fall amid economic slowdown, AI bubble controversy

The U.S. stock market started higher despite sluggish economic indicators, with the ISM service industry index failing to expand (over 50.0) for the first time since 2010. In particular, restrictions on the benefit of interest rate cuts led the rise. Meanwhile, Amazon’s Bezos argued that the AI industry will have a real and long-term positive impact, but it is now beyond the “bubble” stage. The market closed mixed with the Nasdaq turning downward, mainly related companies. However, the Russell 2000 index is also strong, with some theme stocks becoming meme stocks soaring due to the power of option supply and demand (Dow +0.51%; Nasdaq -0.28%, S&P 500 +0.01%; Russell 2000 +0.72%, Philadelphia Semiconductor Index -0.64%)

• Variables: ISM Service Industry Index, AI Bubble

The ISM service PMI fell 2.0p to 50.0 and the expansion phase (50.0 or more) stopped for the first time since January 2010. In particular, the business activity index fell by 5.1p to 49.9 in a major sign of a slowdown, entering a contraction phase for the first time since May 2020. The employment index also extended its contraction to 47.2 for the fourth straight month, as companies are struggling to hire or delaying their hiring efforts. Nevertheless, the new order index remained at 50.4, indicating that demand has not completely collapsed, but slowed significantly by 5.6p compared to August.

Inflationary pressure remains high. The price index rose 0.2p to 69.4, marking the 10th consecutive month of above 60, indicating the continued upward burden on raw materials and labor costs. Companies note that the impact of tariffs is driving up costs for food, clothing and electronics, in particular. By industry, accommodation, restaurant and medical care are growing, but construction, technology services, real estate and rental businesses are sluggish. They have generally been close to weak growth or stagnation, and companies point to high housing prices and economic uncertainty caused by tariffs as their main burdens. Treasury yields rose in the wake of high prices after the data was released, but the stock market has been on the rise due to concerns over economic instability such as job insecurity.

Meanwhile, Amazon’s Jeff Bezos’ comments have caused concerns about the AI industry and are believed to be a factor that has led to companies involved in the market opening. Bezos defines the AI craze as a bubble during Italian Tech Week. In particular, he warns that excessive excitement about AI is causing investors to invest billions of dollars in whatever ideas they have. In particular, he mentions the cases where investors poured billions of dollars into an AI company with no products and only six employees, valuing the company at about $20 billion. However, Bezos emphasized that AI is a very real product and will have a long-term positive impact on all industries and societies around the world. The remarks followed recent comments by Sam Altman of OpenAI in the AI industry, which led to the index’s rise. Of course, there is still a backlash buying trend given that the market is already aware of this

• Featured Stocks: Tesla, Nvidia, Palantir Down Vs. IonQ Bullish

Cars: Tesla Slips Down On Expectations Of Easing Auto Tariffs In U.S. Ahead Of Market Closure
Tesla (-1.42%) fell despite the news of a significant increase in deliveries in the third quarter of the previous day, but continued to fall today, citing anxiety over deliveries in the fourth quarter. In addition, it is also burdensome that the New York City Pension Fund has urged Tesla’s board to oppose the $1 trillion salary package proposed to Musk. In particular, it plunged 4.4% at one point when the board of directors announced that it was concerned that they were only obsessed with pleasing Musk rather than responsibly dealing with various businesses that damaged shareholders. However, ahead of the market close, the decline was reduced on news that the U.S. is considering easing tariffs on U.S. automakers. This means strengthening the “import adjustment offset program,” which adjusts tariffs on imported parts on U.S. vehicles. On the related news, Tesla’s fall was reduced, GM (+1.30%) rose, especially Ford (+3.68%).

Secondary batteries, lithium-related stocks: Rising due to supply and demand issues
QuantumScape (+11.33%) continued to buy after demonstrating all-solid-related technologies in cooperation with Corning (+1.26%). In particular, there is a high tendency to stock up on memes, resulting in high volatility due to options trading, etc. Albemarle (+0.70%) raised its target price from 78 dollars to 92 dollars, but with limited gains, Lithium America (+31.78%) rose sharply amid meme stocks, and lithium-related stocks rose

Semiconductors: Nvidia falls on deadlock issue after UAE contract
Nvidia (-0.67 percent) fell on news that it has been stalled for five months since signing a chip contract with the UAE. This is because the Commerce Department has not approved the deal, pressing the UAE to invest first in the U.S. AMD (-2.98 percent) also fell on the back of the controversy over the AI bubble. Micron (+2.28 percent) rose on news that OpenAI signed a contract with Ritaq of Japan to develop AI infrastructure. The deal is believed to have been signed with Asian companies following recent deals with Samsung Electronics and SK Hynix, reflecting expectations for the spread of the AI industry. In particular, the outlook for earnings is positively adjusted while the supply and demand areas are favorable, such as market attention. Philadelphia’s semiconductor index fell 0.64 percent

Semiconductors: AMAT falls on China export regulations concerns
AstraZeneca Plc (-4.23%) expects strong growth in AI data center connectivity market with PCIe and new UALink standards, but fell as BOA issued a neutral stance on its investment, given that it will not be easy to compete with Nvidia’s NVLink and Broadcom’s firm ecosystem of Scale-Up Ethernet (+0.06%). This will lose the justification for overvalued