Most US shares fell on Thursday, 12 November, as the ten-year Treasury yield climbed 12 bp to 5.10%, while a 4.34% drop in Nvidia (NVDA) carried most of the S&P 500's 0.35% fall. The broad market fell 1.16%, a steeper fall than the index's, with every covered share counted equally, and the Russell 2000 dropped 1.66%.

Nvidia accounted for most of the index's decline, while losses elsewhere were smaller and far more widespread. Only 22% of shares rose, and energy was the only sector to gain, alongside a rally in crude oil. Nvidia has now lost 8.49% over the week. Semiconductors as a group slipped 1.03%, yet Advanced Micro Devices (AMD) and Broadcom (AVGO) rose, which leaves the selling concentrated in Nvidia with the chip trade itself intact.

Thursday's wider selling was about interest rates, in Faircurve's reading, and in particular the prospect of the Fed holding them higher for longer. Yields rose most at the maturities tied closest to the Fed's next moves, with the three-year yield up 16 bp. Rate-sensitive companies underperformed the companies least sensitive to rates by 1.45%, giving back part of a month in which they had led by 14.55%. Those companies had led during weeks of falling yields, so Thursday's reversal is the pattern of profit-taking in the month's leaders on the risk that rates stay high.

The selling fell hardest on the more volatile and smaller shares, while the year's leadership held. High-beta shares underperformed low-beta shares by 1.62%. The largest companies outperformed the smallest by 0.90%, and the past year's leaders outperformed the past year's laggards by 1.21%. The VIX rose to 18.70. That reads as cutting risk in the more volatile shares while holding on to the past year's winners.

Nvidia's slide came in a sector whose price already assumes less growth than analysts forecast. Technology's trailing P/E of 30.0 sits in the bottom 16% of its days since June 2022, and its price needs 10% a year of earnings growth against the 16% analysts expect. Mean reversion from the bottom of its range would come through one of two routes: earnings fall or the share price rises. Analysts expect more growth than the price needs, which makes a rising share price the likelier route.

Treasuries sold off on a day the US data came in weaker than forecast. Existing home sales fell 5.5% in October against a forecast rise of 0.3%, and initial jobless claims came in above the forecast. Higher yields on soft data point to the past month's run of hotter-than-forecast inflation figures as the likelier driver of the bond selling. The market-implied odds of a quarter-point hike on 9 December stayed at 100%, and the dollar edged higher. Brent crude rose and gold fell 2.88% alongside shares, which marks a day of raising cash with no haven bid.

Europe ended mixed and Asia lower, and the Asian sessions closed before the US data. The STOXX 600 edged up 0.14% on a day UK manufacturing output rose 0.7% against a forecast fall, while the DAX slipped. Taiwan's TAIEX fell 2.63% and the Hang Seng lost 1.26%. With Europe steady, the rise in yields and the selling in shares read as a US story.

Faircurve's model reads the day as a broad sell-off, with the shares the model flags as value traps falling 2.01% against 1.29% for the shares the model rates cheapest. Home Depot (HD) reports on Tuesday 17 November, with analysts expecting earnings of $3.87 a share, the first company test of whether weak home sales are reaching the shops that serve homeowners.

• Cisco (CSCO) rose 1.24% in the session before its results, then slipped 0.31% in after-hours trading. Earnings of $1.4 a share beat the $1.33 estimate, and the model's fair value sits 7.9% below the price, evidence grade high.

• Applied Materials (AMAT) fell 3.58% in the session before its results, then rose 0.68% in after-hours trading. Earnings of $4.16 a share beat the $4.06 estimate, and the model's fair value sits 14.4% above the price, evidence grade medium.

• Advanced Micro Devices (AMD) rose 5.86%, leaving the shares up 44.73% over the week. The model's fair value sits 35.6% below the price, evidence grade medium.

• Arista Networks (ANET) rose 5.06%, taking its gain over the week to 29.83%. The model's fair value sits 33.8% below the price, evidence grade medium.

• Newmont (NEM) fell 4.92% on a day gold dropped, extending its loss over the week to 5.91%. The model's fair value sits 6.7% above the price, evidence grade medium.

• Delta Air Lines (DAL) fell 5.22% on a day Brent crude rose 3.30%. The model's fair value sits 1.9% below the price, evidence grade medium.

October's producer prices are due at 8:30 a.m. on Friday, with a 0.4% rise expected and 0.3% for the core measure. They are the next read on whether the past month's hot inflation figures persist. Nvidia reports on Wednesday 18 November, with analysts expecting earnings of $2.47 a share, a test of whether this week's slide reflects the company alone. Walmart follows on Thursday 19 November, with an estimate of $0.63 a share, a read on the consumer.

Thu 12 Nov, sorted best to worst on the day, with the model’s read.

Only energy (+1.51%) rose among the 11 sectors, and materials (-1.28%) fell most. On the week, every sector except consumer staples is higher, led by technology. The model's fair value sits 4.6% above technology's price at the median.

The session’s biggest moves among large companies the model values.

The winners were mostly chipmakers and network-equipment makers, joined by the energy names. The losers ranged from Nvidia to Moderna (MRNA) and the gold miner Newmont. The model's fair value sits 33.2% above Nvidia's price, evidence grade medium.

What investors trade, read through the theme funds.

The themes favoured growth over the real economy, with the growth themes ahead of the real-economy themes by 0.63%, though most of the high-beta themes lagged. Oil and gas producers led, up 1.65%, and gold miners trailed, down 3.95%, on a day the metal fell. By the model, software holds the most value among the themes, with prices 8.5% below fair value at the median.

Faircurve’s credit gauge: spreads implied by bond-fund prices.

CCC widening flag: not raised. The CCC-to-high-yield gap is 987 bp, wider than on 99% of days over three years.

The high-yield spread is in the top 17% of weeks over the past three years (high), rising for four weeks.

Faircurve's credit gauge, which reads spreads from bond-fund prices, shows the strain confined to the lowest-quality tier within high yield. The CCC spread widened 11 bp on the day while the investment-grade spread barely moved. At a yield near 18%, CCC-rated borrowers bear the costliest refinancing as Treasury yields climb, and their borrowing plans would be the first to shrink.

The futures treat a December hike as settled, after the odds rose 38 points since 5 November, and the bills' rising path agrees with them. Speeches by the Fed's Bowman on Friday and Williams on Monday are the next chance for officials to push back on that pricing or to open the door to a further move at the decision after.