# Market Snapshot: Chip Rally Powers Stock Recovery

US equities bounced back Friday as semiconductor stocks led the charge. S&P 500 up +0.98%, Nasdaq 100 up +0.77%, and Dow Jones up +1.08%. Both indexes had tanked to 2.25-month lows earlier in the session before the turnaround.

**What flipped the script?** New York Fed President John Williams dropped some dovish comments, suggesting rate cuts could happen "in the near term." That single comment pushed the probability of a December rate cut from 35% to 63%. The 10-year yield dipped to a 3-week low of 4.03%, signaling bond markets are pricing in easier policy ahead.

**The chip comeback:** Semiconductor stocks that had been getting smashed for three weeks suddenly roared back. GlobalFoundries +5%, ON Semiconductor +4%, and major players like Intel, Qualcomm, and Micron all gained 2-4%. This sector had been under fire due to concerns over bloated valuations and whether AI spending would actually pay off.

**Economic data mixed:** Manufacturing PMI came in at 51.9 (slight miss), but consumer sentiment beat expectations at 51.0. Inflation expectations also got a boost—both 1-year and 5-10 year inflation estimates were revised *lower*, which markets loved.

**Housing got a lift:** With yields falling, homebuilders jumped. Lennar +5%, DR Horton +6%, Builders FirstSource +7%.

**The bitcoin problem:** Meanwhile, Bitcoin dropped 2% to a 7.25-month low, sitting 35% below its recent peak as crypto sentiment remains in the dumps.

**Earnings scorecard:** Q3 wrap-up is almost done—466 of 500 S&P companies reported, with 82% beating estimates. Earnings growth of +14.6% is crushing the +7.2% forecast and tracking for the best quarter since 2021.