US stock indices closed higher on Thursday, rebounding from earlier losses as the selloff in AI infrastructure stocks eased. The S&P 500 gained 0.3%, the Nasdaq closed near flat, and the Dow added 557 points. Chipmakers and AI hyperscalers pared losses after Nvidia CEO Jensen Huang pushed back against concerns about CoreWeave (+5.9%), saying he did not believe the company would need a bailout from Nvidia. The data center firm is an important test case for the viability of businesses emerging to meet surging demand for AI computing. Companies like CoreWeave have borrowed heavily with support from suppliers, including Nvidia (-1.8%), fueling concerns that circular financing may be creating artificial demand. Most hyperscalers closed higher, with Microsoft up 1.1% and Oracle gaining 3%. The chip selloff slowed sharply, with Broadcom down 0.6%, AMD losing 1.5%, while Micron rose 1.9%. The Dow was supported by a rally in Treasuries after a rout that had propelled yields to multi-year highs.

Retail sales in the US increased 0.8% month-over-month in September 2026, following an upwardly revised 1.3% rise in August and well above forecasts of a 0.3% gain. Sales at gasoline stations soared 6.4% due to higher prices. Retail sales data is not adjusted for inflation. Excluding gas, retail sales were up 0.2% only. Other increases were also seen at furniture stores (1.3%), food services & drinking places (1.1%), health & personal care (0.7%), electronics & appliances (0.6%), food & beverages (0.4%), nonstore retailers (0.3%), and motor vehicle dealers (0.2%). On the other hand, sales stalled at clothing stores and fell at miscellaneous store retailers (-3%), building materials & garden equipment (-0.6%), sporting goods, musical instruments & books (-0.5%) and general merchandise stores (-0.1%). Meanwhile, sales excluding food services, auto dealers, building materials stores and gasoline stations, which are used to calculate GDP, were up 0.1%, following a 1.2% rise in August.

Crude oil rose near $98 a barrel on Thursday amid mounting supply risks in the Middle East. Attacks on commercial vessels in the Strait of Hormuz sank a Singapore-flagged container ship, pushing tanker rates in the Persian Gulf to record highs. The US military has reportedly drawn up plans for new strikes on Iran, potentially involving the MOAB, the largest non-nuclear explosive device in the US arsenal. Iran said it was “counting the moments” until it could strike US warships. Prices were also supported by an 8-million-barrel US inventory draw in the week ended October 9th. The IEA warned that tight diesel markets could persist into next year, while attacks on Saudi Arabia threatened to disrupt the recovery in oil supply. Meanwhile, the US is reportedly considering easing sanctions on “shadow fleet” vessels transporting Russian oil and petroleum products to help ease global supply pressures.

The UK economy expanded 0.1% month-on-month in August 2026, slowing from 0.4% growth in both July and June but defying market expectations of a 0.1% contraction. Growth was driven by a 0.8% increase in production output, led by manufacturing, which rose 1.2%, and mining and quarrying, up 1.4%. These gains were partly offset by a 1.2% decline in water supply, sewerage and waste management. Meanwhile, services output showed no growth, as a 2% rise in wholesale and retail trade was offset by a 1.7% fall in administrative and support services and a 2.7% decline in food and beverage services. Construction output fell 0.2%, marking its fourth consecutive monthly decline, as a 0.7% drop in new work outweighed a 0.4% increase in repair and maintenance. On an annual basis, GDP grew 2.1%, its strongest increase since October 2022, up from 1.8% in July and exceeding forecasts of 1.7% growth.

The yield on the US 10-year Treasury note fell nearly 13 basis points to 5.05% on Thursday, amid a broad flight to safety as a global equity sell-off and tech rout due to concerns over the sustainability of AI spending in a high-interest-rate environment. A much hotter-than-expected US PPI report did little to shift expectations that the Fed would keep borrowing costs elevated for longer. US producer prices surged 1.3% month-over-month in September, the largest increase since March 2022 and well above market forecasts of 0.5%. It added to signs of mounting inflationary pressures, following another hotter-than-expected CPI report released yesterday. Meanwhile, retail sales rose 0.8%, significantly exceeding expectations of 0.3%. Traders currently expect the Fed to hold rates steady this month but see a 25bps rate hike in December.

The NY Empire State Manufacturing Index climbed to 25.5 in October from 7.6 in September, beating forecasts of 10.3 and signalling the strongest improvement in New York manufacturing conditions since December 2021. The new orders index rose 21 points to 23.2, while the shipments index increased 16 points to 13.1, pointing to stronger orders and shipments. Unfilled orders rose and delivery times lengthened, while supply availability deteriorated to its lowest since June 2022. The index for number of employees held steady at 10.3, suggesting ongoing modest growth in employment. Price pressures remained elevated, although the prices paid index eased to 59.5 from a four-year high, while the prices received index rose to 30.6. Business optimism moderated, although firms continued to expect growth in orders, shipments and employment. Supply availability is expected to worsen, while both future price indexes rose further and capital spending plans remained modest.